5 March 2019

Concerns about new whistleblowing regulation

A bill on the protection of whistle-blowers is another attempt currently discussed by the government to regulate whistle-blowing (i.e. exposing any kind of information or activity deemed illegal, unethical, or not correct within a private or public organisation). Indeed, the current government intends to make the protection of whistle-blowers the flagship of its anti-bankruptcy measures. However, within its comment procedure, the bill was subject to heavy criticism, even from individual government departments like the Ministry of Justice. What does the bill deal with? Where does the criticism come from?

Ladislav Karas
Václav Bělohoubek

The bill’s content can be summarised in three basic points: the first is to allow new methods of reporting unlawful acts, the second is the explicit definition of the protection of whistle-blowers and the third is the creation of an agency for the protection of whistle-blowers as a new specialised body.

Most importantly, the bill distinguishes between internal (i.e. reporting directly to an employer) and external whistleblowing (i.e. to a third party such as the police). In accordance with the bill, employers who fulfil certain criteria (e.g. have more than 50 employees representing liable persons under the AML Act, etc.) must implement an internal whistleblowing system allowing employees to report unlawful acts, and introduce distinct measures to protect whistle-blowers and keep their identity secret. One new method of external reporting should be a report filed with the Agency for the Protection of Whistle-Blowers that should act as a mediator between the whistle-blower and the bodies investigating the reported actions. The agency should become an organisational department of the Ministry of Justice and its principal goals should be educational and advisory activities, receipt of whistleblowing reports, provision of information to relevant bodies, and issuance of certificates to whistle-blowers, confirming that the information provided by them was indeed reported to relevant bodies.

The law explicitly prohibits the application of any retaliatory measures against whistle-blowers and persons related to them, such as dismissal from employment, wage reduction, transfer to other job positions, etc.

Those criticising the bill draw special attention to the fact that the law was haphazardly prepared before the adoption of a final version of the respective EU directive. It may therefore happen that the Czech law will be at variance with the directive, instead of deriving from it.  The highest reservations of the bodies participating in the comment procedure go against the position of the Agency for the Protection of Whistle-Blowers, criticising the high costs for its establishment and operation. These should amount to CZK 22 million in the first year of operation and to CZK 11 million in subsequent years. Critics also find the agency’s purpose rather dubious, since today, whistle-blowers may already turn directly to the police and other respective bodies, which will always be quicker than whistleblowing via an agency. Moreover, the agency as part of the Ministry of Justice will never be entirely independent, but open to corruption risk when assessing whistleblowing, so say the critics.

The imaginary ball is therefore in the government’s court, as it will be their task to tackle the criticism before submitting the bill to the parliament.

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