News from Pohlmann & Company

22.12.2022

What lasts a long time: Whistleblower Protection Act now passed by the Bundestag

In its last session before Christmas break, the Bundestag passed the Whistleblower Protection Act. The law that was finally adopted still contains a few changes to the government draft that were suggested by the responsible parliament Judicial Committee for justice. The government draft, which was the starting point for the changes in the Legal Affairs Committee, can be found here (in German, see also our blog post from August 3, 2022 here), and the Legal Affairs Committee’s recommended resolution here. The law must now still be executed by the Federal President and promulgated in the Federal Law Gazette. This will probably not happen until January. Three months later, i.e. at the beginning of April 2023, it will then come into force for companies with more than 249 employees; for companies with 50 to 249 employees, the law will not be binding until December 17, 2023.

The changes adopted compared to the draft bill are manageable. For example, anti-constitutional statements made by civil servants has been added to the list of reportable circumstances. In addition, however, the HinSchG that has now been passed also contains a number of changes introduced by the Judicial Committee that are relevant to corporate practice and the establishment of internal reporting channels:

  • It is now expressly stipulated that companies must provide the option of anonymous reporting and subsequent anonymous communication with the whistleblower. Whereas the processing of anonymous reports was merely recommended in the draft bill, the new law now contains a mandatory provision. The obligations to enable anonymous reporting will not come into force until 01.01.2025 (Section 42 (2) HinSchG). The legislator justifies the later entry into force of this obligation with the additional costs for the necessary technical devices or the commissioning of an ombudsperson as well as with the additional burdens for the concrete establishment of the reporting office.
  • Even though there was no specific change to this in the law, the Judicial Committee expressly emphasized that a group solution was welcomed. Verbatim:

For affiliated companies, the concentration of expertise for processing internal reports is often of great importance in order to ensure rapid and professional case handling. On the one hand, this ensures a high level of protection for whistleblowers, but on the other hand, it also makes it possible within the group of companies to identify Group-wide problems and the causes of problems in a more targeted manner and to take effective remedial action. In the explanatory memorandum to Section 14 (1) of the HinSchG, the government draft presents a possible solution based on this provision (the so-called “group solution”). According to this, the internal reporting office of a company can not only be “outsourced” to law firms, for example, but an independent and confidential office can also be established centrally at a group company as a third party within the meaning of Section 14 (1) HinSchG. (…) The Committee expressly welcomes this possible solution and points out its high practical relevance.

  • The retention period for the documentation of the notification is extended from two to three years in order to establish a synchronization with the statute of limitations under civil law.
  • Companies must design their internal reporting offices in such a way that they create incentives to give priority to using the internal over the external (official) reporting office. The recommended resolution does not go into detail about what these incentives should be; it only makes general reference to a transparent description of the reporting procedure, a good communication culture, the promotion of social responsibility and effective protection against reprisals. However, this statutory provision is in line with standard legal advice anyway because companies naturally have an original self-interest in ensuring that possible violations of the law are first reported internally, so that for this reason alone a system should be attractive for employees.
  • In addition, the possibility of compensation for non-material damage, i.e. damage caused by economically intangible reprisals such as mobbing, has been added.