Whistleblowing – the whistleblower protection law

On 20 June 2023, this legal norm was promulgated in the Collection of Laws under the number 171/2023. The Act shall take effect on the first day of the second calendar month following the date of its publication, i.e., 1.8.2023 and shall be based on 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.

From 1 August, all companies in the Czech Republic with 250 or more employees, contributory organisations and municipalities with over ten thousand inhabitants will be obliged to set up this system. Companies with at least 50 employees will have to implement it by 15.12.2023.

The aim and subject of the law is to prevent illegal conduct, to introduce the conditions for providing protection to a natural person who makes a notification about an infringement and also provides for the procedure for filing and assessing such notifications. 

Notification

• contains information about possible infringement that has occurred or is to occur
• notifier = a natural person
• the notifier may be an employee, but also persons in professional practice, interns, negotiators, job seekers, executives, etc.
• must meet the legally-defined specifics:

a) has the characteristics of any crime;

b) has the signs of an offence with the upper limit of the rate of at least CZK 100 000 (e.g., offences specified in the Labour Inspection Act – non-payment of bonuses, remuneration, non-payment of wages, etc.);

c) breaches the law on the protection of whistleblowers

d) or breaches other legislation or EU regulations in the specified 14 areas (e.g., corporate tax, AML, environmental protection, financial services, etc.)

Content of notification

 – information about the notifier (first name, surname, date of birth or other data according to which it is possible to determine the identity of the notifier), an anonymous notification can also be submitted (Section 4 (3) of the Act).

Protection of the notifier

 – If the notification is submitted through an internal notification system (orally, in writing, by request also personally) or submitted to the Ministry of Justice of the Czech Republic

Primary protected persons – employees, applicants, self-employed persons, partners, volunteers, interns, members of the company’s bodies, suppliers of services, etc.

Secondary protected persons – family members of the notifier = close persons, employees and colleagues of the notifier, a person who helps the notifier with the notification…

A person who has knowingly made a false notification is not entitled to protection. 

The entity for which the notifier performs work or other similar activities shall not allow the notifier or other persons to be subject to retaliatory measures (i.e., acts or omissions in connection with work or another person)

Other aspects of whistleblower protection - the right to adequate satisfaction, the reversal of the burden of proof in civil proceedings, the protection of the identity of the notifier, which is not limited in time.

The right to protection against retaliatory measures cannot be waived. 

Internal notification system

- its introduction is mandatory for:

• employers with at least 50 employees (average number of employees as of 1 January of the relevant calendar year, i.e., as of 1.1.2023), according to the explanatory memorandum, employees employed through an agency should be included in this number.
• other mandatory entities.

- information about the system must be published in a way that allows remote access

- an internal notification system of another company can be shared or used (however, this applies only to entities with at most 249 employees); it is also possible to entrust the management of the system to a third party (outsourcing).

The mandatory entity must designate a competent person to carry out the activity.

Competent person = a natural person who has a clean criminal record, is of legal age, is legally competent, impartial, who will accept and assess the reasons for the notification incl. their evidence, propose measures for rectification, must maintain confidentiality. 

The competent person’s procedure after a notification is made:

Receipt of notification by the competent person → within 7 days, the competent person must provide the notifier with a written notice of receipt of the notification → assessment and resolution of the notification by the competent person within 30 days from the date of receipt of the notification (or notification of an extension of the assessment period up to 90 days)

→ if the notification is reasonable, the competent person proposes measures for prevention or remedy, and the mandatory entity decides on the acceptance of measures → written notification to the notifier on the outcome of the assessment

→ if the notification is not reasonable → written notification to the notifier about the outcome of the assessment →

There is an obligation to archive notifications and documents related to the notification - 5 years from the date of receipt. 

Penalties

• against a natural person – false announcement – a fine of up to CZK 50 000, may have committed a crime or a false accusation
• against the competent person – e.g., in the event of a breach of the obligation to receive a notification, failure to judge its reasons, failure to notify the notifier of the outcome of the assessment of the notification, etc. – a fine of CZK 20 000 to CZK 100 000
• towards the obliged entities (i.e., the employers) - e.g., for the non-determination of the person concerned, failure to provide the opportunity to submit a notification through the internal notification system, failure to take appropriate measures, etc. - a fine of CZK 400 000 to CZK 1 000 000
• offences of other persons – e.g., in the case of preventing notifications, exposing the notifier with retaliatory measures, etc. – a fine of CZK 80 000 to CZK 1 000 000

The Regional Labour Inspectorate performs a check of compliance with the obligations of the obliged entities. 

Article prepared by: Martina Farářová, Gabriela Nejedlá