Bundesrat refuses to approve the German Whistleblower Protection Act

On December 16, 2022, the Bundestag passed the long-awaited Whistleblower Protection Act (we reported). Today, February 10, 2023, the Bundesrat was supposed to approve the law. Despite ongoing infringement proceedings by the EU Commission, the Bundesrat did not give its approval to the Whistleblower Protection Act. This means that the law has failed for the time being and cannot enter into force in April 2023 as planned.

Why no approval?

The main point of criticism was the high economic burden on small and medium-sized enterprises in economically difficult times. The representatives from Hesse and Bavaria criticized, among other things, the overly broad scope of the law, which would go far beyond the EU requirements. Furthermore, the required option of anonymous whistleblowing would mean that IT-based solutions would have to be introduced, which would result in further costs for the companies. The possible fine of up to 20,000 euros for failure to introduce an internal reporting channel also met with resistance, as such a consequence is not required by the EU directive and external reporting channels would be available in this case. Finally, the presumption that a reprisal would be taken against a whistleblower based on his or her tip-off was also met with incomprehension. This distribution of the burden of proof would lead to abuse by employees who are threatened with dismissal using the whistleblower system and thus putting themselves in a better position.

Outlook

Overall, the points of criticism are well understood by the companies. However, the failure of the Bundesrat to give its approval means that companies still have no real orientation as to what needs to be taken into account when introducing a whistleblower solution.

It is to be expected that the Bundestag will now call on the Mediation Committee. There, attempts will be made to find a compromise on the content of the law in order to make it approvable by means of appropriate amendments. However, this process will take further time. Companies are nevertheless well advised to look for solutions and obtain offers now. We will be happy to support you together with one of our cooperation partners in the implementation of your solution.