German Whistleblower Protection Act set to enter into force

News  >  German Whistleblower Protection Act set to enter into force

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Germany’s lower and upper houses of parliament – the Bundestag and Bundesrat – have passed a law designed to strengthen protections for whistleblowers. The legislation is expected to come into effect in June of this year.

Its adoption marks the transposition into German law of EU Directive 2019/1937 on the protection of persons who report breaches of Union law. Employment and labor laws are among the regulations set to be affected, with the legislation requiring not only government authorities and public organizations but also employers to set up a secure reporting system for whistleblowers, explains commercial law firm MTR Legal Rechtsanwälte, whose areas of expertise include labor and employment law.

The legislation, having already successfully made its way through the Bundestag, was approved by the Bundesrat on May 12, 2023. It is therefore expected to enter into force during the month of June.

The Act has implications for companies with 50 or more employees. Companies of this size will be required to set up internal reporting systems for individuals seeking to report violations of Union law. When it comes to the deadline for establishing these systems, the legislation takes a staggered approach based on the number of employees at the respective company.

For example, companies with at least 250 employees will be expected to have put in place an internal reporting system within one month of the law being enacted. Smaller businesses with 50 to 249 employees, on the other hand, have until December 17, 2023. They also have the option of establishing a reporting office together with other companies. At the same time, it Is necessary for the reporting systems to enable reports to be submitted in writing or orally. The Act initially contained provisions that also made it compulsory to follow up on anonymous reports, but the relevant provisions were later removed from the legislation.

Workers can submit reports if they relate to violations at the company they work for or at other companies with which they are in professional contact. The reporting offices must confirm receipt of the report and treat the identity of the whistleblower with the utmost confidentiality. Furthermore, they are required to take appropriate measures to clarify the facts. Germany’s federal states also have the option to set up external reporting offices alongside the internal reporting offices.

The Whistleblower Directive establishes safeguards for reports on infringements of EU law or national legislation, provided these violations entail the enforcement of a fine or criminal penalties.

Failure to comply with the Whistleblower Protection Act can lead to fines of up to 50,000 euros. Companies with 50 or more employees are thus required to integrate a suitable reporting system.

The team at MTR Legal Rechtsanwälte can assist companies in complying with the legal requirements.

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