WHISTLEBLOWING

Due to the transposition of Directive (EU) 2019/1937 of the European Parliament and of the Council of 23 October 2019 on the protection of persons who report breaches of Union law as amended by Regulation (EU) 2020/1503 of the European Parliament and of the Council of 7 October 2020 (hereinafter referred to as “Directive“), Act No. 189/2023 Coll. (hereinafter referred to as the “Amendment“), which amends Act no. 54/2019 Coll. on the protection of whistleblowers of anti-social activity and on the amendment of certain laws and which amends Act no. 327/2005 Coll. on the provision of legal aid to persons in material need and on amendments to Act no. 586/2003 Coll. on Advocacy and on Amendments to Act No. 455/1991 Coll. on trade entrepreneurship (Trade Act) as amended by Act No. 8/2005 Coll. as amended (hereinafter referred to as the “Act“), which entered into force on July 1, 2023, with the exception of some provisions of the Amendment, which enter into force on September 1, 2023.

Regardless of its adjustments, to the Act itself, we do not recommend it being ignored especially by employers. Wording state that obligations are already in incumbent on every employer, the non-compliance of which could have adverse and far-reaching consequences for employers, especially in the form of financial penalties.

The Amendment tightens the current sanctions, and at the same time introduces new obligations for employers and affected persons or restricts their rights, and for breaching the stated obligations or for exceeding its rights, it stipulates fines which, according to the Amendment, can extent to not only tens of thousands of euros but also hundreds of thousands of euros.

The subject matter of the Act until the Amendment took effect was simply the regulation of the conditions for providing protection to persons in an employment relationship in connection with the reporting of anti-social activity, the regulation of the rights and obligations of persons when reporting anti-social activity, and the establishment, status and powers of the Whistleblowers Protection Office.

The reason why the Act was, and still is often overlooked, is that most employers mistakenly rely on the fact that unless they employ 50 employees or more, the Act, or the obligations arising from it do not apply to them.

The fact that gives rise to this false assumption follows from the provisions of § 10 par. 1) in connection with the provisions of § 10 par. 9) of the Act according to which an employer employing 50 employees is obliged to establish the so-called Responsible Person, and at the same time issue an internal regulation to the extent defined by the Law.

However, the opposite is true. These facts do not mean that the Act as such and the other obligations arising from it do not apply to employers with less than 50 employees! For the purposes of the Act, an employer is any person who employs at least one natural person in an employment relationship.In other words, the Act applies to all employers. Only employers meeting the criterion of 50 or more employees are required to have established the so-called Responsible Person and issued internal regulation!

To what extent does the Amendment modify the Act?

The most significant adjustments contained in the Amendment include:

1. extension of the provision of protection to persons reporting violations of European Union law,
2. extension of the provision of protection to a  person who, in cases defined by law, has published information about anti-social activity,
3. extension of the provision of protection to a person who filed a report anonymously and whose identity was subsequently revealed,
4. expansion of the personal scope of the Act,
5. the introduction of a complete obligation to have a person internally responsible for the fulfillment of the criteria in the Act, and at the simultaneously narrowing the powers of the external responsible person when checking notifications,
6. expansion of the obligations of the employer,
7. expansion of the duties of the Whistleblowers Protection Office,
8. definition of the scope of mandatory data that the relevant public authorities are obliged to make available,
9. extension of the obligation to maintain confidentiality,
10. increase in the amount of fines.

Due to the extensiveness of the adjustments to the Act, we will briefly address only certain points of the Amendment, which nevertheless can sufficiently outline the seriousness of the situation.

1. extension of the provision of protection to persons reporting violations of European Union law

Penalties and labor law actions that may cause unjustified harm to the whistleblower or another person who can be assumed to be affected in connection with the notification (retaliatory measure) include in particular:

• termination or immediate termination of employment relationship,
• termination of the employment relationship during the probationary period or non-extension of the employment relationship for an indefinite period,
• dismissal, reassignment to a lower position or refusal of promotion,
• change of job duties, place of work or change of working hours,
• reduction of wages, non-granting of remuneration or personal allowance,
• failure to provide professional training,
• disciplinary measure,
• bullying, intimidation or harassment,
• damage to good reputation,
• withdrawal from the contract for the supply of goods and services,
• cancellation of a license or permit.

In this context, in conclusion, it is necessary to emphasize that the provision in question does not contain an explicitly defined Numerus Clausus of actions, which for the purposes of the Act can be considered as “retaliatory measures”.

At the same time, the terms Threat of Retaliation (retaliatory measure) or Attempted Retaliation (retaliatory measure) are newly introduced. Such a factual basis serves to include cases where the punishment itself will not be fulfilled. Such punishments, which are used as a threat but are not carried out or which are carried out but do not enter into force and are subsequently canceled, can be considered as threats of punishment or attempted punishments.

4. extension of the personal scope of the Act

The wording of the Act until the Amendment came into force provided protection only to persons in an employment relationship in connection with reporting crime and other anti-social activity, which represents a significant narrowing of the range of persons to whom this protection was granted in terms of the Directive, while the primary purpose of the Directive is to provide protection to any persons working in private or the public sector that report violations of European Union law.

The objective of the Amendment is to strengthen the protection of whistleblowers against any consequence related to the whistleblower’s employment relationship or other similar relationships caused by the notification or publication of information about anti-social activity and which causes or may cause the whistleblower or another person who can be assumed to be affected in connection with the notification unjustified harm.

In the sense of the Amendment, the whistleblower is also:

• a person who reports information about anti-social activity that he learned about during the employment relationship or another similar relationship, while this employment relationship or another similar relationship has already ended,
• a person whose employment relationship or other similar relationship has not yet started and is about to start,
• a job applicant, regardless of whether or not the employment relationship in question or another similar relationship with this applicant begins,
• a person other than an employee who has a certain pre-contractual relationship with the person to whom the notification is directed (e.g. a participant in a tender implemented by a private company who learns about anti-social activity in the tender),
• a natural person who made a report anonymously, but whose identity has been revealed.

Another person who can be assumed to be affected is:

• a person close to the whistleblower (relative in the direct line, sibling and spouse; other persons in a family or similar relationship are considered to be close to each other if the harm suffered by one of them is reasonably felt by the other as their own harm),
• natural person – an entrepreneur or a legal entity that the whistleblower controls, in which he participates, in which he performs the function of a member of the body of the legal entity, or for which he performs work,
• natural person – an entrepreneur or a legal entity that controls a legal entity in which the whistleblower participates or in which he performs the function of a member of the body of the legal entity,
• the person who provided assistance to the whistleblower in connection with the notification, or
• a responsible person or a person who participates in fulfilling the tasks of a responsible person.

Up until now, the basic criterion for determining the persons who are authorized to make a notification in terms of the Act, and thus obtain the required status and the resulting rights, was the employment relationship in the context of which the notification was to be made.

However, other natural persons than employees, often come into working contact with the affected persons, i.e. natural persons or legal entities against whom the notice is directed.

For this reason, the Amendment defines what is meant by the term “in another similar relationship“ or provides a demonstrative description of the activities during which, in the event of establishing contact between the subject (person) concerned and a public or private organization, “another similar relationship” may be created. All these activities must always be considered in the context of the mutual relationship between a specific natural person and the concerned public or private organization. In this context, it is necessary to emphasize that the provision in question does not contain an explicitly set Numerus Clausus of relationships, which for the purposes of the Act can be considered as “another similar relationship”.

Last but not least, the description of relationships that are considered to be an employment relationship for the purposes of this Act is also more precisely specified.

10. increase in the amount of fines

The legal regulation of the sanctions prior to the effectivity of the Amendment could not be considered sufficiently dissuasive, and for this reason the Amendment introduces stricter sanctions for violation of the Act. At the same time, the possibility of double up the sanctions in the case of repeated offenses is established. For the sake of clarity, the Amendment increased the sanctions from the maximum amount set by the Act prior to the effectivity of the Amendment €20,000.00, up to €200,000.00.

From the outlined changes, it is easy to notice that the range of rights and obligations brought by the Amendment is enormous. In connection with the rights and obligations already defined in the Act prior to the effectivity of the Amendment, regardless of the important purpose established by the Directive, it is not possible to trivialize the Act and the consequences arising from it, for all entities whose rights and obligations are regulated by the Act.

If interested, we can process the issue comprehensively and individually according to the client’s needs and requirements.