The legislation in the area of whistleblower protection is taking shape. A revised draft bill has been submitted for comments and is expected to come into force in July 2023.
The rules for the protection of whistleblowers are intended to newly introduce to the Czech legal system protection for those who report illegal conduct, and to introduce obligations for a number of entities, especially employers, who are to establish internal channels for receiving reports of illegal conduct. The deadline for the transposition of Directive 2019/1937 of the European Parliament and of the Council of 23 October 2019 on the protection of persons who report infringements of Union law (the “Directive”), pursuant to which the protection of whistleblowers is to be nationally regulated, expired on 17 December 2021. The Czech Republic failed to fulfill its obligations and has not yet passed a law setting out the rules for the protection of whistleblowers in the Czech context.
With the end of the term of the Chamber of Deputies, the discussion of the government’s draft bill which contained rules more stringent than what is required by the Directive was cut short. In particular, the original draft bill provided for an employer’s obligation to introduce an internal notification system if the employer employed an average of 25 employees in the previous calendar quarter, compared to the 50 employees set out in the Directive. In addition, the original draft bill, among other things, significantly increased the scope of reports that could be brought by the whistleblower, going beyond the areas set out in the Directive.
The Ministry of Justice has now prepared a revised version of the draft bill which was submitted to the inter-ministerial procedure on 29 April 2022. It should be noted that the current draft moves away from some of the stricter measures (compared to the Directive) that were included in the original draft bill. The definition of notification has been narrowed down so that the notifier can report an act which has the characteristics of a criminal offense or an infringement of European Union law in the areas defined in Article 2(2) of the draft bill. A new aspect of the draft is that protection is to be granted also to notifications made anonymously, in case the identity of the whistleblower is subsequently revealed. In terms of the obligations of the obliged entity, e.g. employers, it is noteworthy that the obliged entity is obliged to introduce an internal notification system only if it has employed on average at least 50 employees in the last calendar quarter. Self-employed workers, volunteers or interns all count as employees.
However, some aspects criticized by experts still remain in the current draft – for instance, the option for the whistleblower to choose whether to file a report through the internal system or whether to contact the Ministry of Justice. By contrast, the Directive itself anticipates, in its Article 7(1) and (2), that the Member States will urge whistleblowers to submit notifications through internal reporting channels. Such a rule is sensible because the purpose of protecting whistleblowers is, among other things, to prevent unlawful activity within companies and to allow for the effective and prompt resolution of any misconduct that may be found. Besides this, we also find it problematic that the responsible person appointed by the obliged entity must examine the notification within a 30-day period. This is a very short period of time within which the obliged entity is required to ensure the assessment of the merits of the notification (through the responsible person) and to inform the notifier in writing of the results of this assessment. In practice, therefore, it must carry out both the necessary investigations and the legal assessment within this time limit. Although the time limit for assessing a notification can be extended up to two times, employers and obliged entities can generally expect costs associated not only with the setting-up of such internal notification system but also with providing the tools for the responsible person to be able to comply with all obligations under the Whistleblower Protection Act within the stipulated time limit.
Although the draft bill has moved away from some of the more problematic aspects of the original version, there is still room for improvement of the current wording. On the other hand, one cannot predict to what extent the contents of the bill might be modified as it moves through the legislative process. It is fair to assume that the draft bill will be revised following the comments procedure, and amendments from the Chamber of Deputies or the Senate can also be expected. It is worth following the legislative process closely, particularly in view of the many new obligations that the legislation brings. The current draft bill is expected to take effect from 1 July 2023.