Transposition of the Directive on the Protection of Persons Who Report Breaches of Union Law - whistleblowing

4. 11. 2021

As early as 17 December 2021, the time lime will expire for the for transposition of Directive (EU) 2019/1937 of the European Parliament and of the Council of 23 October 2019 on the protection of persons who report breaches of Union law (“the Directive”), concerning public and private entities with more than 25 employees. These entities must then put in place an internal reporting system – a tentative deadline has been set for the end of March 2022.

The Directive itself aims to set minimum standards for the protection of persons reporting the listed breaches of EU law in one of the areas specified in the Annex to the Directive (e.g. public procurement, financial services, environmental protection, consumer or privacy and personal data protection, and others) that affect the EU’s financial interests or breaches concerning the internal market, both in the private and public sectors.

One of the responsibilities of the Member States is to ensure that private and public sector entities establish channels and procedures for internal reporting and taking subsequent measures. The Directive also contains provisions on external reporting, publication, protection measures and penalties. In addition, rights and remedies may not be waived or limited in any way.

In the Czech Republic, this issue was to be regulated, according to the government’s bill, by the Act on the Protection of Whistleblowers, which is currently awaiting discussion by the Guarantee Committee after the first reading.

Given the fact that, among other things, there is still a rather negative attitude towards whistleblowers, the protection of whistleblowers lies primarily in the prevention of retaliatory measures, which are demonstratively listed in the law. The Czech law then further specifies possible penalties that are not regulated by the Directive.

The relevant person, “reporting coordinator”, may be fined from CZK 20,000 to 100,000 for breaching his/her obligations; depending on the type of offence, liable entities may be fined from CZK 400,000 to 1 million, possibly 3–5% of their net turnover for the last accounting period.

Third parties that provide information on the identity of the whistleblower, prevent the whistleblower from submitting a report or provide information capable of thwarting or endangering the purpose of the report may be fined from CZK 50,000 to 200,000, or 5% of their net turnover for the last accounting period.

However, the legislative process concerning the government bill on the protection of whistleblowers will not be completed due to the election to the Chamber of Deputies of the Czech Republic held on 8 and 9 October, so the transposition of this Directive will be a task for the new government after the election. However, it remains to be seen in what form this current bill will be maintained or amended.

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