Czech Republic: New EU wide standards to protect whistle blowers

Czech Republic

As we reported a few months ago (see Law-Now article), a bill on the protection of whistleblowers is currently going through the legislative procedure after being introduced by the Czech Government earlier this year (the “Bill”). Meanwhile, an EU Directive on the protection of persons reporting on breaches of EU law (the “Directive”) has recently been approved by the European Parliament – some of the features or the scope of this Directive are expected to be implemented into the Bill.

The Bill seeks to impose an obligation to create reporting systems on those persons covered in the AML Act, contracting authorities pursuant to the Public Procurement Act and employers with a total annual turnover exceeding EUR 10 million or with more than 49 employees. However, the Directive goes beyond that, allowing each Member State the option of extending this obligation to small private legal entities who employ fewer than 50 persons and whose annual turnover and/or annual balance sheet total does not exceed EUR 10 million.

The Directive, similarly to the Bill, introduces an obligation to create internal and external reporting systems: obliged entities are required to introduce an internal reporting channel to allow for reporting by employees and other persons in the context of their work-related activities. In addition to this, the Czech state must establish an authority with sufficient competence to receive and deal with whistleblowing reports. For this reason, the Bill proposes the introduction of a special agency, created within the Ministry of Interior to carry out such purposes.

The Directive widens the scope of protected persons from employees and members of the management body (as stated in the Bill) to those who are self-employed, shareholders, unpaid trainees, volunteers and any persons working under the supervision and direction of contractors, subcontractors and suppliers. Further to this, the Directive grants protection to job applicants; this means that if a job seeker is subject to an unlawful request during the recruitment process, or has faced other unlawful facts during pre-contractual negotiations, he or she shall be able to report this either to the designated internal or external reporting bodies.

Taking into account the comparisons above, and based on the fact that the Bill is in the early stages of the legislative procedure, we anticipate that it will be amended, primarily on the side of protected persons, to ensure that it will transpose the Directive into local law.

We will keep you informed about the legal developments related to whistleblowing. Meanwhile, if you have any questions about the implementation of a whistleblowing system in your company, please do not hesitate to contact one of our team.