The Act on the Protection of Whistleblowers is to transpose into Czech law 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. It is to introduce, inter alia, a number of obligations for so-called obliged entities. In the private sphere, these will primarily be employers who, as at 1 January of the relevant calendar year, employ at least 50 employees. In this connection, we point out that employees also include persons performing work under a dohoda o pracovní činnosti (agreement on work activity) or under a dohoda o provedení práce (agreement on the performance of work). The Act on the Protection of Whistleblowers may therefore affect a relatively large number of employers who employ “only” temporary workers.
The effective date of the Act is to be set as the first day of the second calendar month following its promulgation. Larger employers employing on average at least 250 employees should be particularly vigilant. The draft Act provides smaller employers who employ on average 50 to 249 employees with certain additional time to fulfil their obligations, stipulating that they may establish the so-called internal reporting system by 15 December 2023.
The purpose of this Act is to enable workers in the private and public sectors to safely report selected unlawful conduct, and subsequently to provide them with protection against possible retaliatory measures by employers or other obliged entities. The purpose of this protection is to provide the whistleblower with a guarantee that if they report, in the prescribed manner, facts suggesting that someone has committed unlawful conduct, they will not be sanctioned in any way. The measures are intended to serve not only to protect potential whistleblowers of unlawful conduct, but also to prevent unlawful conduct in general.
Under the Act on the Protection of Whistleblowers, an obliged entity (employer) will have, in particular, the obligation to establish a so-called internal reporting system. The internal reporting system is to serve primarily for submitting reports of possible unlawful conduct, which is more specifically defined (for example, conduct having the characteristics of a criminal offence or certain selected misdemeanours, etc.). Obliged entities must ensure that within the internal reporting system it is possible to submit a report in writing or orally (for example, by telephone or in person). Obliged entities further have the obligation to ensure that only the so-called competent person, who should be independent of the obliged entity in the performance of their activity, may become acquainted with the submitted report. The internal reporting system must therefore be highly confidential. Obliged persons may entrust a third party with the operation of the internal reporting system. However, this does not relieve them of responsibility for fulfilling their obligations under the Act. Therefore, if obliged entities decide to entrust a third party with the operation of the internal reporting system, they should always carefully consider whether it is a sufficiently responsible and professional person.
Obliged entities will further have the obligation to designate a so-called competent person, typically an employee of the obliged entity. However, it may also be an independent third party who will only perform the activity of a competent person for the obliged entity. The competent person should only be a natural, unblemished, adult person with full legal capacity. They should perform in particular the following activities:
Obliged entities are to be subject to further specific obligations by law, for example the obligation to publish selected information concerning the method of reporting and the identification of the competent person, the obligation to adopt appropriate remedial measures in the case of a well-founded report, or the obligation to ensure the confidentiality of received reports, etc. In the event of a breach of obligations arising from the Act on the Protection of Whistleblowers, the obliged entity may, depending on the nature of the breached obligation, be imposed a fine of up to CZK 1,000,000.
It is therefore appropriate for obliged entities to which the Act on the Protection of Whistleblowers applies, that is in particular employers employing at least 50 employees, especially employers employing at least 250 employees, to begin working sufficiently in advance on the establishment of an internal reporting system so that they are able to make this system fully operational.
David Svoboda and Karolína Šolínová
This text was originally prepared by the law firm Mašek, Kočí, Aujezdský in cooperation with the association Association for Electronic Commerce (APEK) as legal circular No. 05/2023 intended for members of this association.
This text was translated from Czech to English using an AI translator.