In February 2019 the Ministry of Justice of the Czech Republic submitted a bill that aims to provide whistleblowers credible tools to report illegal conduct in the workplace and protect them against potential reprisals. The bill also introduces new duties for many employers.
Who does the new law protect?
The new law should ensure the protection of all employees who have
reported illegal conduct in connection with their jobs.
Protection should apply only to whistleblowers who report crimes
and offences. According to the bill, protections should not be
accorded when reporting ethics code violations or breaches of other
purely internal regulations, though obviously employers cannot
arbitrarily punish these employees for doing so.
What are the new duties for employers?
Employers that (i) employ more than 50 employees
(including part-timers), (ii) have annual turnover or an annual
balance sheet total exceeding EUR 10 million, (iii) are a legal
entity that is a liable person under the Czech
anti-money laundering legislation, or (iv) are contracting
authorities under the Public Procurement Act, will now be obliged
to set up an internal reporting system. As is
clear from the above, the new duties apply to broad groups of
employers such as institutional employers, who likely already have
their own internal systems (e.g. banks, payment services providers,
etc.), but also medium-sized companies (including manufacturing
plants, etc.), which likely do not already have internal mechanisms
in place. The bill also introduces other measures that increase
costs for employers.
The proposed internal reporting system should set the rules for submitting reports and measures for protecting whistleblowers, including rules allowing the identity of the whistleblower to be kept secret or rules related to how reporting is organised, notification of the whistleblower about the course and results of the investigation, and the investigation deadlines.
In addition, employers that will be required to set up an
internal reporting system will have to designate the person or
persons or, where appropriate, the department authorised to receive
and investigate reports. These persons should be sufficiently
independent and professional to ensure the confidentiality of
internal channels.
The employer will also have to publish the information about the
functioning of the internal mechanism, for example on its website
or on the intranet, and possibly at physical locations where all
employees can enter and become familiar with the internal
mechanism.
In accordance with the bill, the employer will have to check every received report and, if appropriate, take necessary action to remedy detected shortcomings. In addition, the employer will be required to keep records of reports for three years from the day of submission.
What will be the alternatives to submitting reports
directly to the employer?
If an employee is unable or unwilling to make a report through the
internal reporting system, he or she may report directly to law
enforcement authorities and the authorities responsible for
conducting offence proceedings. In addition, this system is
supplemented by a completely new body – the Whistleblowing
Protection Agency. As part of the Ministry of Justice, the
Whistleblowing Protection Agency will provide information and
advice on whistleblower protection, receive reports and issue
confirmation to whistleblowers.
Which actions against employees will be
prohibited?
The bill also provides for a ban on retaliation. In practice, this
will mean that if someone submits a report, the employer will not
be able to sanction the whistleblower or a person close to the
whistleblower, in particular by (i) dismissal, recall or release,
transfer to a different job position or unjustified denial of
promotion, (ii) reduction of salary or wage, change of working
time, change of workplace, or (iii) discrimination or
disadvantage.
When will the law come into effect?
If the bill passes the entire legislative process, it should come
into effect on 1 January 2021.
Outcome
As many comments to the bill were submitted in the comments
procedure, it is unclear what the final result will look like. Even
today, however, companies would be well-advised to adopt internal
processes for reporting undesirable and illegal conduct in the
workplace. Doing so can help the employer detect such conduct
sooner and reduce possible financial or reputational damage. As the
wise man said, prevention is the best cure.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
