On 16 December 2019, the 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 (the Whistleblower Directive”) came into force.

The purpose of the Whistleblower Directive is to require legal entities in the private and public sector to establish secure channels for reporting violations of certain provisions of Union law (including violations in the areas of public procurement, financial services, product safety, environmental protection, consumer protection, data protection) and to protect whistleblowers from dismissal and other forms of retaliation such as disciplinary measures.

Member States must ensure that authorities and companies create internal reporting channels for whistleblowers, but they may also foresee exceptions for companies with less than 50 employees and for municipalities with less than 10,000 inhabitants. In addition, Member States are to designate authorities as external reporting channels responsible for receiving and processing information. There is also a reversal of the burden of proof, according to which it is presumed that a disadvantage suffered after reporting grievances was reprisal for the report. The Whistleblower Directive must be implemented in national law by 17 December 2021.

In December 2020, the German Federal Ministry of Justice submitted a draft bill for a Whistleblower Protection Act (“Hinweisgeberschutzgesetz”, the “Draft Bill“). In its scope, the Draft Bill goes beyond the requirements of the Whistleblower Directive as it does not only guarantee the protection of whistleblowers when reporting violations of Union law, but also when reporting violations of German law. The Draft Bill requires companies to set up an internal whistleblower system. For companies with 250 or more employees, this obligation would exist as soon as the law comes into force, whereas smaller companies with 50 to 249 employees are granted a two-year transition period.

However, the coalition parties have not yet agreed on the Draft Bill. Among other things, the Draft Bill is criticised because it goes unnecessarily beyond the requirements of the Whistleblower Directive and places an additional burdens on companies already weakened by the Covid-19 pandemic. Although the coalition parties have stated that they would like to implement a corresponding whistleblower law during the current legislative period, the legislative process has come to a standstill for the time being due to the different points of view. Nevertheless, it is expected that the law will be on the agenda at the beginning of the next legislative period, as otherwise Germany may face infringement proceedings. While Germany’s compliance with the implementation deadline of the Whistleblower Directive by 17 December 2021 is doubtful, it is clear that the regulation will come into effect in the foreseeable future, that must meet the minimum requirements of the Whistleblower Directive.

Companies and municipalities should therefore familiarise themselves with the requirements of the Whistleblower Directive, review existing systems or, if they do not have a whistleblower system in place, make an effort to implement an adequate whistleblower system.