The Whistleblower Protection Act

Lucie Šutovská
The Whistleblower Protection Act came into force in the Czech Republic on 1 August 2023 as a long-awaited transposition of the Directive of the European Parliament and the Council of the EU on the protection of persons who report infringements of the EU law. The very purpose of the adopted legislation is to promote and facilitate the reporting of possible infringements.

Efforts to comprehensively regulate whistleblowing, as this area is often referred to, have been made repeatedly in the Czech Republic in recent years, but it is only now that comprehensive legislation has been enacted with effect of Act No. 171/2023 Coll., on the protection of whistleblowers (hereinafter “Act”). However, it cannot be forgotten that the proper deadline for transposition of the Directive expired on 17 December 2021, which led to its direct effect on certain groups of persons and the existence of an external notification system run by the Ministry of Justice, through which notifications could already be made before the Act came into force.

In general, whistleblowing is understood as a process in which a whistleblower alerts an institution, or a body authorised to investigate illegitimate or unethical conduct that they have become aware of in the course of their employment or similar association with the workplace. The aim of whistleblowing is to expose such actions in order to protect the public interest, expose corruption and increase transparency.

The very purpose of the adopted legislation is to encourage and facilitate such notifications by establishing an internal notification system while ensuring that the whistleblower is protected against retaliation by the organisation or persons concerned by such alert. Retaliation is defined as conduct which may cause harm to the whistleblower in connection with their employment or similar activity and is triggered by the notification. The law defines, for example, termination of employment, removal from a managerial position, reduction in pay, change in working hours or interference with the right to protection of personality. Protective measures are granted by the Act to the whistleblower themself, as well as to other people, such as colleagues who provided assistance in discovering the information contained in the report or people close to the whistleblower. Although only a natural person may make the notification itself, the Act also grants the right to protection against retaliation to legal persons, in particular persons controlled by the notifier, in which the notifier has an interest or of which the notifier is a member of an elected body. It is also important to note that this protection is available to whistleblowers who have used the internal or ministry notification system to make a notification, not to whistleblowers who publish information about an employer in other ways, e.g., in the media, without first using established notification systems.

The material scope of the Act applies to notifications of possible unlawful conduct that has the characteristics of criminal offences, misdemeanours with a statutory fine with an upper limit of at least CZK 100.000 and violations of other legal regulations or EU regulations, the definition of which is very broad. These areas specifically include, for example, public procurement, financial services, consumer protection, environmental protection, or personal data protection.

What are the obligations of some employers?

With the entry into force of the Act, every employer with 50 or more employees has become an obliged entity whose obligation is to establish an internal whistleblowing system and to take measures to protect whistleblowers at the same time. The deadline varies depending on the number of employees. In the case of more than 250 employees, the employer must do so no later than 1 August 2023, when the Act comes into force. In the case of 50 to 249 employees, the measures must be introduced by 15 December 2023 at the latest. One of the obligations when introducing an internal reporting system is to enable written or spoken submissions or, at the request of the whistleblower, in person. However, the management of the system does not have to be carried out directly by the employer but may be delegated to another person, while ensuring that all the obligations applicable to the employer are met. In addition, the employer must also publish information on the means of notification, both through the internal system and through the Ministry's system, as it is up to the notifier to choose which of these systems to use to submit the notification. Another piece of information that must be disclosed is whether the employer allows the receipt of notifications from a person who does not perform work or other similar activity for the employer.

According to the Act, another important obligation of the employer is the identification of the relevant person, namely the employee or a third party, which must also be published by the employer in a manner allowing remote access. It is the activity of the competent person to receive the notifications submitted and to assess their validity. The notifier must be notified about the receipt of the notification within 7 days and subsequently notified of the assessment of the notification within 30 days. The time limit for notification of the results of the assessment may be extended by up to 30 days under the Act, but not more than twice, and the competent person is obliged to notify the notifier of the reasons for the extension before the expiry of the time limit.

Finally, we would like to draw your attention to the consequences for violation of the obligations set out in the Act, which are regulated by the Act on two levels. These are private law consequences in the form of the right to adequate compensation for the injured whistleblower in the events of retaliation and non-pecuniary damage. The second level is the public law consequences, which are applied through sanctions for offences with fines of up to CZK 1.000.000. According to the law, these offences may be the application of retaliatory measures or the failure to comply with the obligations to establish an internal reporting system, not appointing a relevant person or not taking appropriate measures.

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