Navrh zakona o ochrane oznamovatelu miri do Senatu

Whistleblower Protection Act heads to the Senate

At the EU level, the protection of whistleblowers stems from the directive on the protection of persons who report infringements of EU law. The Czech Republic was obliged to transpose the directive by 18 December 2021. After the passing of the deadline for implementation , the European Commission announced in March this year that it would bring an action against the Czech Republic with the simultaneous assessment of a fine for non-implementation of the directive.

The government submitted the Whistleblower Protection Act to the Chamber of Deputies in November 2022. After almost five months, the proposed act was approved by the Chamber of Deputies on 21 March 2023, and now heads to the Senate for further debate. Considering the lawsuit filed by the European Commission, it can be expected that the proposed act will be enacted in the next few months.

The aim of the directive and the proposed act is to regulate the procedure for filing and assessing reports of illegal conduct through an internal reporting channels and to provide the necessary protection for whistleblowers, i.e., natural persons who have become aware of information about possible illegal conduct in connection with their work or similar activities. Based on the proposed act, whistleblowers should be granted effective protection consisting, inter alia, in the prevention of retaliatory measures, for example, in the form of employment termination.

The proposed act introduces an obligation for obliged entities to establish the internal whistleblowing channels, including all employers employing more than 50 employees. The decisive date for determining the number of employees is 1 January of the relevant calendar year. The obliged entity may delegate the establishment of the internal whistleblowing channels to another person, or it may share them with another obliged entity or use the channels already established by another obliged entity, provided that such obliged entity  has no more than 249 employees. Companies with 250 or more employees will thus be obliged to establish their own internal whistleblowing channels in the full extent without the possibility of using, for example, the existing group channels within the group.

The internal whistleblowing channels must be operated by the designated person. The designated person can only be a natural person designated for this purpose by the obliged entity from among its employees or contracted externally. The designated person is obliged, inter alia, to receive and assess the reasonableness of the reports, to propose corrective measures to the obliged entity and to maintain confidentiality of all facts of which he or she becomes aware in the course of his or her activities, even after termination of such activities. The designated person is also obliged to keep an electronic record of data on notifications received to the extent provided for by law and to keep the received reports for a period of 5 years from the date of their receipt.

The whistleblower must be given the opportunity to make the report in writing, orally or at his or her request in person, within 14 days of such request. The obliged entity may exclude receiving reports from a person who does not perform work or other similar activity for it.

The designated person is obliged to notify the whistleblower in writing of the receipt of the report, no later than 7 days from the date of its receipt. Furthermore, the designated person must assess the reasonableness of the report and inform the whistleblower in writing of the results within 30 days of its receipt. This time limit may be extended in case of factually or legally complex cases. If the designated person assesses the report as reasonable, he or she shall propose to the obliged entity measures to prevent or remedy the unlawful situation. If he or she does not consider the report to be reasonable, he or she shall inform the whistleblower in writing and inform him or her of his or her right to lodge a notification with the public authority.

Failure to comply with obligations arising from the proposed act may result in a fine of up to CZK 1 million for the obliged entity. The breaches fined by this fine include, for example, failure to prevent the whistleblower from being subjected to retaliation, failure to designate a designated person or failure to ensure the possibility to submit a report through the internal whistleblowing channels. 

However, even the whistleblower can be fined up to CZK 50,000  for knowingly making a false report, or the designated person can be fined up to CZK 100,000, for example for disclosing the identity of the whistleblower without his or her consent or refusing to accept the report.

After numerous debates in the Chamber of Deputies, an amendment to the act that would have introduced an obligation to accept any anonymous report, both for all obliged entities and then, even to a narrower extent for public entities, was not approved. On the contrary, the amendment to the act was approved adding to the list of breaches that can be reported the suspicion of having committed an administrative delict, which is punishable by a fine of at least CZK 100,000. The original proposed act only covered the reporting of breaches that have the characteristics of a criminal offence, breaching obligations stipulated the Whistleblower Protection Act itself or other legislation in specific areas such as financial services, consumer protection or competition. The scope of breaches that can be reported newly covered by the proposed amendment is thus broader than originally intended.

The proposed act shall become effective on the first day of the second calendar month following its publication. The obliged entities will thus have approximately one month after the publication of the act to put in place the internal whistleblowing channels, to designate a designated person and to ensure compliance with other obligations stipulated in the act. The obliged entities should therefore follow the legislative process of the act closely to ensure that they are able to comply with all their obligations in a timely manner.

We are monitoring further developments in the legislative process on this matter and will keep you informed. If you would like further information, please contact the authors of this article or other members of the EY team with whom you work.

Authors:

Ondřej Havránek

Kateřina Suchanová

Samuel Týče