Czech Republic: Implementation of whistleblower protection in the Czech Republic
As those you who are familiar with the European legal environment will know, mandatory whistleblower protection (whistleblowing) has been introduced into EU law by the Directive of the European Parliament and of the Council on the protection of people who report breaches of Union law (EU Directive 2019/1937). The member states were obliged to implement that directive into national law by 17 December 2021.
However not all members states have been able to comply with this implementation deadline and the Czech Republic is one of them. The original governmental proposal of the Whistleblowing Act was submitted to the Chamber of Deputies in February 2021. In some regards, this governmental proposal went way beyond the requirements of the Directive. The obligation to introduce the internal notification system for whistleblowers was supposed to apply already to companies with more than 25 employees and to municipalities with more than 5.000 inhabitants, i.e. only have the threshold required by the Directive.
In this initial governmental proposal, also anonymous notifications were allowed and enjoyed the same protection as non-anonymous notifications. This proposal also made full use of the fine limits set by the Directive.
However, this governmental proposal did not pass in the parliament until the general elections that took place in October 2021. Under the legislative procedures rules, this draft law then had to be abandoned and the new government was supposed to present its own proposal. At this moment, it was already clear that the Czech Republic would not implement the Directive within the prescribed implementation period.
The new governmental proposal was submitted to the Czech Chamber of Deputies a year later in November 2022. This draft bill by the new government adopted a much more minimalistic approach to the implementation than the previous one. Even disputably minimalistic in some regards.
Firstly, it is stated in the proposal that the protection of whistleblowers applies only to notifications in which the whistleblower can be identified. In case of anonymous notifications, the protection applies only from the moment the whistle-blower’s identity becomes known to whoever might expose them to retaliation. It is a general question if such a provision, together with the fact that the draft does impose a fine of only approx. 3.000 € for the case of disclosure of a whistleblower´s identity will not undermine trust in the system and therefore undermine the aims of the Directive. Additionally, the proposal abolishes an older government regulation that allows anonymous notifications to be filed with the competent ministries, thus in our point of view effectively lowering the level of protection in this respect. It can be therefore argued that the bill, should it pass into law, could be challenged as an inappropriate implementation of the Directive.
It is also disputable to which extent the proposal covers notifications regarding public procurement, as this is not exactly stated in its wording (contrary to the previous draft bill). The new government proposa howeverl maintains the provisions of the previous draft regarding an approx. 2.000 € fine for any “whistleblower who knowingly files a false notification.
Although the new government proposal has passed recently through the Chamber of Deputies and is expected to also pass through Senate, and so it is likely to come in force this year, we see a number of points under which it can be challenged in the future. On the other hand, the minimalistic approach adopted by current government is in this regard undoubtedly welcomed by business.
In any case, the implementation of the Directive into Czech law has now been delayed by more than one year and the Commission has already sanctioned the Czech Republic. Besides the Czech Republic, also Germany, Estonia, Spain, Italy, Luxembourg, Hungary and Poland have been fined.
Regardless of the final outcome of the legislative process, our Czech team is going to be ready with a comprehensive solution for our clients, that also includes a user-friendly technical system provided by an external provider.