Czech Republic: Bill on the protection of whistleblowers
The Czech Republic is currently undertaking a new attempt at implementing the 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 (the “Whistleblower Directive”), after a previous attempt failed when general elections interrupted the previous legislative process in Autumn of 2021. To this purpose, a new bill on the protection of whistleblowers (the “Bill”) has been introduced into the parliament, which is a transposition of the Whistleblower Directive, which the Czech Republic, as a EU Member State, is obliged to bring its legislation into line with. The Bill, if passed in its current form, is expected to take effect on 1 July 2023.
As the explanatory memorandum attached to the Bill states, the aim of the proposed whistleblower protection legislation is to enable workers in both the private and public sectors to safely file a whistleblower report through mandatorily established internal mechanisms or external mechanisms, and to subsequently protect them from potential retaliation by employers and other parties.
Until now the Czech legal system provides protection to whistleblowers only to a limited extent, based on general provisions of civil law, labour law and criminal law. However, with the adoption of the new Bill, we can expect the introduction of more comprehensive legislation in this area.
Based on the new Bill, any employers with 50 or more employees being employed in the last quarter will be obliged to implement an internal notification system. While smaller companies will be entitled to share the internal notification system with other parties, employers with 250 or more employees will be obliged to use their own system. In addition to the internal notification system, notifications can be made directly to the Ministry of Justice.
For offences under the Bill a fine of up to CZK 1,000,000 or 5% of the net turnover achieved by the obliged entity for the last completed accounting period may be imposed.
This new Bill replaces a previous bill that was debated in the Czech legislative process last year. Unlike the previous bill, which intended to set some rules that were much stricter than those foreseen in the Whistleblower Directive, the current Bill is more in line with the Whistleblower Directive. The professional community sees this as a positive step towards setting conditions within the limits set by the Whistleblower Directive, but at the same time in such a way as to avoid undue administrative and financial burdens on businesses.
It is important to note that the transposition deadline set by the EU Directive has already expired on 17 December 2021. The Czech Republic as well as many other member states are therefore already overdue in the legislative process and will probably be sanctioned by the EU commission.
While the proposed date of entry into force may seem still far away for many managers and company owners, we deem it essential to prepare for that well in time. Our team has been approaching this topic since last year and, thanks to close cooperation with a pioneering specialized IT company that offers an easy to use, but at the same time affordable technical solution, are able to offer our clients the whole package of both legal and technical tools to become compliant with the future whistleblower laws in the Czech Republic