What does Germany’s new Whistleblower Act mean for employees?

Why is the legislation taking effect on Sunday, and what does it entail?

• • The Whistleblower Act impacts public bodies and businesses with over 50 employees, around 90,000 entities in Germany in 2021.
  • Germany missed the deadline to implement the EU directive into national law.
  • The EU Commission took legal action and brought the case to the European Court of Justice (ECJ).

The Whistleblower Act offers what kinds of protections?

• • Laws are supposed to safeguard anyone who reports wrongdoing in government or business from being fired or harassed.
  • Companies must establish contact points that accept and handle such information discreetly in order to achieve this.
  • A punishment of up to €50,000 will be imposed on anyone who breaks the law.
  • The Federal Office of Justice will also establish an external reporting office.
  • Whether to report wrongdoing internally or outside is up to the whistleblower.

Wasn’t there something like this already?

• • The majority of big businesses already use reporting offices, claims the government’s draught bill.
  • The energy provider Aeon has had a central whistleblower system, according to its records, since 2016.
  • A whistleblower hotline can be contacted by voice message or in writing by both workers and outside parties.
  • According to the automakers, the regulation does not significantly alter the way VW, BMW, or Mercedes-Benz operate.
  • According to a BMW representative who talked to DPA, “We are merely honing the processes of communication with the HR department about potential whistleblower disadvantage.

What is the cost and the number of missing hotlines?

• • According to the federal government’s draught law, small and medium-sized businesses still need to set up around 10,000 hotlines,
  • Even though hotlines for reporting misconduct are already a widespread practice in many large organisations. One hotline could be shared by up to four businesses.
  • The initial setup of the internal hotlines is expected to cost the German economy roughly €190 million, according to the German government.
  • This translates to an average cost of roughly €12,500 for medium-sized businesses and up to twice that amount for large businesses per reporting office.
  • The federal government has estimated that each reporting office will incur annual labour and material expenditures of roughly €5,800.

Why was there a legal disagreement?

The Bundesrat had halted the government’s initial draught because the Christian Democratic (CDU)-led states were concerned about placing a disproportionate financial burden on small and medium-sized businesses.
Subsequently, several agreements were reached, one of which reduced the maximum penalties from €100,000 to €50,000.

Can the weakened law aid in exposing workplace abuses?

• • The final law has been questioned by the procedural coordinator of the Society for Freedom (GFF), notwithstanding attorney David Werdermann’s designation of the directive as a “milestone” for improved protection of whistleblowers.
  • He claimed that the compromises had weakened the law in a vital area by removing the requirement for confidentiality.
  • The chairperson of the Whistleblower Network, Annegret Falter, stated that although the law forbids retaliation against whistleblowers, it will unavoidably happen.
  • A support fund, among other things, to pay for legal and psychiatric assistance, is not included in the final measure.
  • The agreement also resulted in the removal of the entitlement to pay for non-material harm, such as that brought on by bullying.

How does the law affect workers?

According to Anja Piel, a member of the executive board of the German Trade Union Confederation (DGB), the Whistleblower Protection Act could help change the way people think about whistleblowers in the workplace so that they are no longer seen as troublemakers. Anyone with the guts to denounce wrongdoing shouldn’t have to worry about consequences or disadvantages; instead, they should be commended.

What does the law mean in terms of employers?

The legislation, does it bring about change?

• • Some businesses now aim to develop a “speak-up culture” among their staff members so that they will report breaches.
  • Deutsche Post stated that it would make it very clear to staff members that “their reports will be treated with the utmost confidentiality and that they will be protected from retaliation if they make a report in good faith”
  • Bosch increases awareness of the problem through on-site and digital compliance office activities. It also offers interactive options like a compliance self-test, departmental compliance dialogues, and global awareness campaigns in its everyday operations.

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