July 2023 – Whistleblower Protection Act has come into force

The Whistleblower Protection Act entered into force on 02.07.2023. According to this law, companies with more than 250 employees are obliged to set up an internal reporting system for receiving information (“whistleblower system”) with immediate effect and companies with between 50 and 249 employees with effect from 17 December 2023. The whistleblower system must in particular fulfil the following requirements:

  • It must be possible to submit the information in writing, by telephone or in person. The reporting system must guarantee the confidentiality of the identity of the whistleblower.
  • Whistleblowers must be informed in writing within one week of the receipt of their report and within three months of the follow-up measures taken.
  • Communication with the whistleblower must be fully documented.

If companies do not set up a suitable whistleblower system, they may be fined up to € 20,000.

May 2023 – Whistleblower Protection Act is passed by the German legislature

On Friday, May 12, 2023, the Bundesrat approved the draft of the Whistleblower Protection Act. Prior to this, an agreement had been reached by the Mediation Committee on May 9, 2023. The Bundestag had already approved this compromise on May 11, 2023 and amended its original resolution accordingly. The law is expected to enter into force in the course of June.

This means that Germany has finally implemented the EU requirements almost 1.5 years after the implementation deadline. It is yet to be seen whether there will be further disputes with the EU due to deviations from the EU requirements in terms of content.

In terms of content, the following changes compared with the previous draft are worth highlighting:

  • In the compromise proposal, the obligation of the addressees of the law to also process anonymous reports has once again given way to a mandatory provision.
  • In addition, reporters should prefer to submit reports to an internal reporting office in cases where effective internal action can be taken against violations.
  • Only if the content of a report relates to the employer or an entity with which the reporter had professional contact, the report falls within the scope of the law (restriction to a professional context).
  • The amount of potential fines in case of violations has been reduced from EUR 100,000 to EUR 50,000.

December 2022 – German Parliament (Bundestag) passes Whistleblower Protection Act

On December 16, 2022, the Bundestag passed the law for better protection of persons providing information (“Whistleblower Protection Act”). Compared to the draft law from September 2022, the version of the law that was passed contains the following essential changes:

  1. The scope of application has been expanded to include reports of unconstitutional statements by public officials and reports of violations of the provisions of the European Digital Markets Act (Art. 2 of the Whistleblower Protection Act).
  2. In deviation from the original draft law, it is now mandatory that reporting offices must also accept anonymous reports and not – as previously – merely “shall” do so. For this purpose, suitable reporting channels must be available to enable anonymous communication between reporters and reporting offices. However, the procedure for receiving such anonymous reports is not mandatory until 01.01.2025 (Art. 42 para. 2 of the Whistleblower Protection Act).
  3. In the event of a violation of the Whistleblower Protection Act, the reporter can also demand monetary compensation for immaterial damages (Art. 37 para. 1 of the Whistleblower Protection Act). The previous draft had granted compensation only for material damages.
  4. The retention period has been extended from two to three years after the conclusion of the proceedings (Art. 11 para. 5 of the Whistleblower Protection Act).
  5. Finally, it is of practical relevance that whistleblower systems can continue to be set up centrally within a concern/group of companies (so-called concern/group regulation, Art. 14 of the Whistleblower Protection Act).

The Federal Council of Germany (Bundesrat) is expected to deal with the Whistleblower Protection Act in its session on February 10, 2023.

February 2021 – Protection of Whistleblowers

February 2021 – Protection of Whistleblowers

Whistleblower Protection Act

The guidelines of the EU Directive on the protection of whistleblowers have to be implemented in a new German “Act for Better Protection of Whistleblowers” (“Whistleblower Protection Act”).

The scope of application of the Act’s first draft (that for political reasons will not enter the legislative process and be passed) is – as expected – wide. According to the draft all employees as well as trainees, civil servants, judges, professional soldiers and persons in “employee-like” positions should be able to rely on the protection provided by the new Whistleblower Protection Act. These persons are protected by the statutory regulations if they have obtained information about violations in connection with their professional or official activities and pass on this information to the reporting channels provided for in the Whistleblower Protection Act. Relevant violations in this respect are, in particular, violations of all provisions of criminal law as well as provisions of the law on administrative offenses. Insofar, the draft contains an extension compared to the regulations of the EU Directive, which previously provided protection only for reports on violations of EU law.

In accordance with the EU Directive, the draft requires companies and departments with 50 or more employees to set up internal reporting channels. However, for companies and departments with up to 249 employees there will probably be a two-year transitional arrangement until the obligation to set up internal reporting channels takes effect. The internal hotlines must be accessible to all employees but can also be opened to third parties who are professionally connected with the companies or departments. The internal hotlines must be run by trained personnel and decisions on how to deal with the information provided must be made independently. The draft law explicitly states that companies and departments may use external lawyers as ombudspersons.

June 2020 – Statement on the Association Sanctions Act

June 2020 – Statement on the “Association Sanctions Act”

Law to strengthen integrity in business
After the German Federal Ministry of Justice had presented an initial “unofficial” draft of a “Law on the Sanctioning of Association-Related Offenses” (so-called Association Sanctions Act – Verbandssanktionengesetz, abbr. VerSanG) in August 2019, a revised draft of a “Law on Strengthening Integrity in Business” was presented on the Ministry’s website on April 20th 2020, the last version of which was published on June 22nd 2020. The draft is currently in the legislative process as a government bill.

The German Ombudsman Association has commented on the draft. It calls for clarification by the legislator that no company will suffer from any disadvantages if it seeks to clarify the facts and tries to prevent further issues by setting up an ombudsman’s office.

The statement was published with the statements of other associations on the homepage of the Ministry and can be downloaded here as a pdf file.