Whistle-Blowers’ Protection – Is Your Company Prepared?

The Czech Republic has finally joined most other EU countries and fulfilled its obligation to implement an EU directive on the protection of persons reporting breaches of Union law (also known as whistle-blowers) into the Czech legal system. Based on this act, reporting persons shall obtain an adequate protection against any retaliation in a work-related context.

Duties for the companies resulting from the above-mentioned act vary and depend, inter alia, on the number of employees companies have. Larger companies from the private sector (i.e. with 250 and more employees) have to establish and operate special internal reporting channels. They must designate person(s) who shall process, investigate and assess the reports and, as a follow-up, recommend respective measures to the employer. Smaller companies (i.e. companies having between 50 and 249 employees) shall also comply with these obligations, however, the legislator has provided more time for their preparation as they have to establish internal reporting channels by December 15, 2023.

Reported breaches include e.g. crimes, serious offences and breaches of national or EU law in certain areas such as financial services, income tax of legal entities, consumer protection, environmental protection, public procurement etc. To obtain protection against retaliation, reports cannot be disclosed anonymously. Furthermore, a knowingly false report does not provide any protection and it might be fined up to CZK 50,000.

No internal reporting channel introduced? Besides the fact that it is a breach of law connected with certain fines, whistle-blowers still have other options to report, especially via an external channel provided by the Ministry of Justice of the Czech Republic. However, it seems to be considerably favourable for the employer to manage breaches internally. Internal investigations and measures shall, to the extent permitted by law, lead to elimination or at least reduction of adverse effects to companies caused by potential public knowledge of such breach.

Plenty of IT solutions for internal reporting channels have popped up on Czech and neighbouring markets. Obliged entities might choose from many different front-end as well as back-end solutions providing catchy design and instruments. However, be aware that your chosen IT solution is in full compliance with the applicable laws. In this respect, do not hesitate to reach out to us to receive a professional and reliable advice in full compliance with the applicable legal framework for the protection of the whistle-blowers.

By Mgr. Ing. Jan Valíček

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