My 10 lessons learned from the current draft of the Whistleblower Protection Act
Dr Thomas Altenbach, CEO of LegalTegrity and compliance expert, summarises the most important lessons learned from the current draft bill for the German Whistleblower Protection Act. At the beginning of April 2022, Federal Minister of Justice Dr Marco Buschmann (FDP) sent the new draft as an implementation of the EU Whistleblowing Directive to the ministries for voting.
I have now struggled through the 111 pages. The Whistleblower Protection Act itself (abbreviated WPA-Draft) is still manageable with 25 pages. However, it deviates in some important points from the Whistleblowing Directive, the coalition agreement and the draft from last year. I would like to give you a brief and comprehensible overview of this in the following.
My 10 Learnings on the WPA-Draft:
- The circle of obligated parties is unchanged. Companies and public bodies with 50 or more employees are obliged to report to the registration office, while municipalities with 10,000 or more inhabitants are obliged to do so.
- Anyone who has somehow discovered misconduct in a professional context can be a whistleblower. The law does not provide a more precise list, e.g. ex-employees, job applicants, self-employed persons, suppliers, etc. With this broad term, everything is said and everyone is covered.
The reporting categories are also extended to national law and criminal and fine standards. This is a first step, because the company should investigate all relevant reports anyway and whistleblowers are unfamiliar with such legal fine details. Unfortunately, what is missing in the draft: the coalition agreement contains the extension to violations of internal regulations, such as violations of the four-eyes principle, which is rightly often implemented in practice.
- The WAP-Draft does not impose an obligation on internal reporting offices to allow anonymous reports – at least in a first step and subject to special legal regulations. However, anonymity is an important protection for many potential whistleblowers and a prerequisite for “making up one’s mind” on reporting, as past scandals from the diesel scandal to Wirecard have shown.
- The internal reporting channels can also be handled by persons who are in a dual function or an external (ombudsman) person, e.g. a compliance expert or lawyer.
- The reporting offices must be staffed with people who are working independently. It is possible to have other activities in the company that are free of conflicts of interest. Important is the obligation of the employer to ensure that these persons have the necessary expertise, which can be provided through training.
- The tasks of the internal reporting offices are regulated in detail, from the confirmation of receipt to the reporter up to the taking of follow-up measures. Their task is to ensure that such violations are eliminated in the future.
- A big sigh of relief for many internationally active companies: Group-wide reporting channels are still permissible under the German draft. There are no objections to a central “distribution” of cases at headquarters. This is stated in the explanatory memorandum. However, the subsidiary concerned remains responsible for follow-up measures and improvements.
- The reporting offices must keep the documentation on the reports for two years after completion of the procedure and then delete it. This provides the necessary clarity in demarcation to the GDPR.
- The draft provides for a fine of up to EUR 20,000 as a sanction for failure to set up internal reporting channels that have to comply with the requirements of the Whistleblower Protection Act.
Politicians are under pressure due to the missed transposition deadline of the Whistleblower Directive and the already initiated infringement proceedings: The entry into force of the newly submitted WPA-Draft is to be expected – if necessary with adjustments – in the course of the next few months.
Consequently, special attention and urgency is already required today in order to prepare the internal processes in the company and to avoid fines!
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