The German Whistleblower Protection Act (“HinSchG”) regulates the treatment of persons reporting possible irregularities in companies or authorities (Whistleblowers). After the Bundesrat rejected the HinSchG draft bill adopted by the Bundestag, the German federal government convened the Conciliation Committee. On May 9, the federal and state governments found a compromise. Now, nothing will hamper a swift adoption of the law.
The following changes made by the Conciliation Committee compared with the previous drafts are important for companies:
• No obligation to enable anonymous reports
The acceptance and processing of anonymous reports does not have to be guaranteed. It was merely agreed that anonymous reports “should” be processed. An obligation to follow up on anonymous reports may nevertheless exist due to other legal provisions.
• Internal reporting office to be given priority
Previously, it was intended that Whistleblowers should have the choice of contacting the (organization’s) internal office or an external reporting office. Now, Whistleblowers “should” preferably contact the internal reporting offices. At the same time, companies are still requested to create incentives for the use of the internal reporting office.
• Reduction of fines
The maximum amount of fines for a violation of the HinSchG was lowered from 100,000 to 50,000 euros.
• No non-material damages
Whistleblowers are no longer entitled to compensation for non-material damages (“damages for pain and suffering”). However, there is still an obligation to pay compensation for material damage if the ban on reprisals has been violated.
• Disadvantage must be asserted
If a Whistleblower suffers a disadvantage in connection with his or her professional activity, it is presumed that this disadvantage is a reprisal for this report or disclosure of a possible misconduct in the company. The statutory provision has now been supplemented to the effect that the Whistleblower must claim that he or she suffered the disadvantage as a result of the report or disclosure.
In all other respects, the bill’s wording remains unchanged. After the law comes into force, all companies with 250 or more employees must set up a reporting office within one month and comply with the requirements of the HinSchG. The law grants companies with up to 50 employees a transitional period of six months from promulgation.
What are the next steps?
Today, May 11, 2023, the bill will once again be decided in the Bundestag. Due to the Conciliation Committee’s agreement, a speedy implementation is to be expected, so that an entry into force as early as June is likely.
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