Whistleblower protection based on the EU Whistleblower Directive – What applies to German companies and what needs to be done?

On 17 December 2021, the deadline for transposition of the EU Whistleblower Directive (EU Directive 2019/1937 of 23 October 2019 on the protection of persons reporting breaches of Union law) expired. A German implementation law is not yet in sight. In the last legislative period, the grand coalition was no longer able to agree on the draft bill of a whistleblower protection law (HinSchG-E) presented by the Federal Ministry of Justice. For many companies, there is uncertainty as to how to deal with this situation legally. The article outlines what applies and what needs to be done now.

In principle, no direct application of the Directive to private undertakings

In particular, various service providers for whistleblower protection systems give the impression on their websites that the EU Whistleblower Directive has also applied directly to private companies since 18.12.2021. Unlike EU regulations, however, directives under European law require transposition into national law by means of a corresponding national law. The direct application of directives after expiry of the transposition period is affirmed by the case law at most vis-à-vis authorities as well as state or state-related organisations and institutions under certain conditions (see most recently BGH, judgment of 29.01.2020, VIII ZR 80/18). However, in the event of a legal dispute after the transposition period, a directive-compliant interpretation of existing obligations can also be considered between private individuals, at least when reporting violations of EU law. The management is therefore well advised to pay attention to the requirements of the EU Whistleblower Directive as part of its management survey for the establishment of a whistleblower protection system.

Whistleblower hotline as part of a due diligence compliance organization

In addition, the establishment of a whistleblowing system as part of a due diligence organization now meets good standards. For example, Suggestion A.2 of the German Corporate Governance Code (GCGC) has been stated for some time: “Employees should be given the opportunity to provide protected information on legal violations in the company in an appropriate manner; third parties should also be given this possibility.”

With regard to the question of what a suitable whistleblower protection system could look like, the EU Whistleblower Directive contains very specific requirements and procedural requirements, such as the protection of confidentiality, documentation and processing deadlines. Companies with more than 50 employees should be obliged to set up a whistleblower protection system. Whistleblowers should also be comprehensively protected against dismissal or discrimination. It is to be expected that the German legislator will closely follow the requirements of the directive in its design.

Coalition agreement of the traffic light government and outlook

The transposition of the EU Whistleblower Directive into national law is expected in the near future during this legislative period. The coalition agreement of the traffic light government has expressly positioned itself on this: “We are implementing the EU Whistleblower Directive in a legally secure and practicable manner. Whistleblowers must be protected from legal disadvantages not only when reporting violations of EU law, but also from significant violations of regulations or other significant misconduct, the detection of which is in the special public interest. […].” – Coalition Agreement 2021, p. 111.

The new edition of a whistleblower protection law in Germany is therefore to be expected shortly. The announcement in the coalition agreement also goes beyond the actual scope of the directive: it is made clear that in Germany not only violations of EU law will be covered by whistleblower protection. It can therefore be assumed that a future German whistleblower protection law will also cover the reporting of violations of purely national regulations – at least if they are subject to penalties or fines and their detection is therefore in the public interest.

Result

Before the traffic light government presents a new draft law, the future design of the German Whistleblower Protection Act remains open in detail. Nevertheless, companies should already deal with the question of how whistleblower protection can be integrated into their organization in a legally compliant manner or how existing reporting systems can be adapted to current legal requirements. The EU Whistleblower Directive contains sufficiently specific requirements to serve as a guide. If you want to be absolutely sure, you should take appropriate measures now and only readjust them after the entry into force of a legal regulation, if necessary. Co-determination and data protection regulations must also be observed during implementation.

By Dr. Victoria Berger, MELCHERS, Germany, a Transatlantic Law International Affiliated Firm.  

For further information or for any assistance please contact germany@transatlanticlaw.com

Disclaimer: Transatlantic Law International Limited is a UK registered limited liability company providing international business and legal solutions through its own resources and the expertise of over 105 affiliated independent law firms in over 95 countries worldwide. This article is for background information only and provided in the context of the applicable law when published and does not constitute legal advice and cannot be relied on as such for any matter. Legal advice may be provided subject to the retention of Transatlantic Law International Limited’s services and its governing terms and conditions of service. Transatlantic Law International Limited, based at 42 Brook Street, London W1K 5DB, United Kingdom, is registered with Companies House, Reg Nr. 361484, with its registered address at 83 Cambridge Street, London SW1V 4PS, United Kingdom.