[May 2023] State of whistleblowing: laws in Germany, Luxembourg & Czech Republic

As of April 25th, 2023, all European Union Member States have either introduced draft bills or adopted new national laws that will transpose the EU Directive on whistleblowing. Seven nations continue to face roadblocks in approving the new provisions. Slovakia, Poland, Luxembourg, Hungary, Estonia, Czechia, and Germany continue to face delays with approving their draft laws and implementing the Directive. All seven Members have proposed draft legislation to lawmakers, however, several issues may be delaying progress in approving the new laws. 

What is causing the delays? 

The transposition and adoption of the EU Directive may be delayed in some Member States due to political and bureaucratic obstacles that are slowing the process. The biggest issue causing delays with adopting the changes has been the need for major reforms in existing legal frameworks that deal with breaches. At the national level, some lawmakers and industry stakeholders have also raised concerns about provisions that could increase malicious reporting or overload compliance departments. Others have welcomed the changes and see them as vital to promoting accountability and transparency. 

The seven Members that have made the slowest progress have been met with industry stakeholders and political opponents who have concerns about how the new rules will impact business and government. Some countries are constrained by a lack of resources, affecting their ability to complete the transposition process within the required timeframe. There are also varying interpretations of certain provisions of the Directive and potential conflicts with existing national laws. Below is a look at three of the seven EU countries still facing delays. 

German whistleblower protection act

In Germany, long standing debates about the transposition of the EU whistleblower Directive have led to disagreements between political parties about the scope of the new national law for take, and how it should be implemented. Some have voiced concerns that the directive is too broad and could lead to whistleblowers misusing their position to make false claims against employers. Others have argued that it should be limited to the public sector. These differences in approaches have extended the timeframe of German debates and delayed implementation. A point of contention has been the inclusion of external reporting channels, which would involve external authorities such as the media and NGOs. Last month, we mentioned that two new draft bills are now on the Bundestag docket. It remains to be seen whether either one will be adopted. 

Luxembourg whistleblowing law

Luxembourg law-markers have expressed concern that some of the directive’s provisions could undermine the country’s strict privacy laws and harm its financial industry. Protecting the confidentiality of information has been a priority for the small EU nation, which has meant preventing the disclosure of sensitive information related to multinational corporations that conduct business there. The Member State has also said that a EU-wide directive would be difficult to enforce, given the patchwork of different laws across countries. Luxembourg is currently implicated in a high profile case with the LuxLeaks whistleblower. The case was referred to the European Commission Tribunal, which ruled that public interest outweighs the negative effect PwC was exposed to. 

Czech Republic whistleblowing law

The Czech Republic Parliament is currently reviewing a new bill introduced to Parliament in January 2023. As of today, there is still no law regulating whistleblowing in the Member State, although lawmakers hope the bill will be approved by July 2023. One of the main points of contention by critics of Czechia’s approach to regulating whistleblowing is the limited provisions for anonymous reporting, which is seen as weakening the protection of whistleblowers. Proposed sanctions under Czech law for making a false report have been criticized for placing a burden on employees who disclose wrongdoing and discouraging them to do so. The Czech Pirate Party which opposes the current government warned that the new law on whistleblowing “will not work if the state demands the disclosure of whistleblowers’ identities”.