1) Local Laws
a) Has the country implemented any laws / regulations on whistleblowing (Local Law)?
Current statutory legislation in the Czech Republic does not provide for regulation of whistleblowing, with two exceptions: (i) banking; and (ii) public service, even though the relevant pieces of legislation do not use the terms whistleblowing or whistleblower.
In the area of banking as a regulated financial service, Section 10a of the Act No. 21/1992 Coll., on Banks (Act on Banks) provides for a very basic level of whistleblowing regulation. The relevant section states that each bank is required to adopt internal procedures for their employees to report a breach or suspected breach of the Act on Banks, decrees adopted based on the Act of Banks or relevant EU legislation through a communication channel created for this purpose only. Further detailed requirements on such a communication channel and its operation are set in the Decree of the Czech National Bank No. 163/2014 Coll., on the performance of the activities of banks, savings and credit unions and securities dealers.
Furthermore, the Act on Banks requires the Czech National Bank to establish an effective mechanism for reporting a breach or suspected breach of the Act on Banks, decrees adopted based on the Act of Banks or relevant EU regulation. The Act on Banks requires a minimum standard of this reporting mechanism, which includes protection of the whistleblower against discrimination and other unjust treatment or protection of personal data of both the whistleblower and the person whose actions are being reported.
Within the area of public service, whistleblowing is regulated in the Governmental Regulation No. 145/2015 Coll., on measures related to the reporting of suspected infringements in a public office (Regulation). The Regulation requires all public offices to create a position for an employee who will be in charge of receiving such whistleblowing reports on breaches or suspected breaches of law and will be responsible for follow-up internal investigation based on these reports.
Furthermore, the Regulation requires the identity of the whistleblower, if known at all, to be kept secret and the whistleblower must not, under any circumstances, face pressure or any kind of harm.
These two stated exceptions, however, do not provide for regulation of whistleblowing in complex, unlike the EU directive. For this reason, a Draft Law has been created to adopt measures set in the EU Directive (as described below). In connection with the recent elections to the Chamber of Deputies, this Draft Law was not passed, but it can be expected that in the near future, after the formation of the new government, this Draft Law will be included in the legislative process again, probably in the same wording as originally. The description below is therefore based on the previously discussed Draft Law.
2) Scope of application
a) What types of wrongdoings are covered by the Local Law? Does it cover breaches of EU law?
The Draft Law covers reporting of any criminal or administrative offence as well as breaches to Czech or EU law in the area of:
- financial institutions and services
- money laundering and terrorist financing
- consumer protection, product and transport safety
- protection of the environment and safety of food
- nuclear safety
- public procurement
b) Personal scope
- Does the Local Law apply to reporting persons working in both the private and public sectors?
The Draft Law applies to a wide range of reporting persons, including employees of both public and private sector, self-employed persons, board members, shareholders, volunteers, job applicants, people whose employment has ended, and those being supervised or directed by a contractor, sub-contractor or supplier.
- Does the Local Law apply only to breaches that the reporting person became aware of in a work-related context?
Yes, but the Draft Law applies a very wide definition of “work,” as described above.
- Does the Local Law also protect: facilitators; people connected to the whistleblower and who could suffer retaliation in a work-related context; and legal entities the whistleblower owns, works for, or is otherwise connected with?
Yes, such a person is granted equal level of protection as the whistleblower.
c) Does the Local Law require specific conditions to protect reporting persons?
The Draft Law requires the report to be submitted through an internal reporting system that must be established or as an external report to the Ministry of Justice. Neither reasonable grounds nor good faith are required per se; however, a person who knowingly reports false information may be held liable for an administrative and potentially even criminal offence.
3) Reporting channels
a) Does the Local Law allow anonymous reports? How are companies/agencies meant to handle them?
This remains unclear. The Draft Law does not specifically mention anonymous reporting; however, in one provision it allows for the identity of the whistleblower not being known.
b) Is there a duty of confidentiality and any derogation from this duty?
Yes, all people working with the reported information, including identities of all concerned, must be kept confidential. Information on the identity of the whistleblower or person who has assisted the whistleblower can only be revealed:
- with their own consent; or
- if necessary based on other provisions of Czech law, such as in a criminal proceeding.
c) Public disclosures: does the Local Law provide for this possibility?
The whistleblower can disclose the reported information publicly if any of the following conditions are met:
- when the person first reported internally or to the Ministry of Justice, but no appropriate action was taken in due time based on the deadlines provided by the Draft Law;
- the person has reasonable grounds to believe that the breach may constitute an imminent or manifest danger to public safety or public health, the environment or other public interest or cause irreparable damage; or
- the person has reasonable grounds to believe that reporting to the Ministry of Justice the circumstances may provide for a great danger that the whistleblower or the person who assists the whistleblower will face retaliation.
4) Reporting channels: internal
a) Is there an obligation for private and/or public legal entities to establish channels and procedures for internal reporting and follow-ups?
The obligation to establish channels and procedures for internal reporting apply to:
- entities under public procurement regulation;
- employers with at least 25 employees in the last quarter;
- entities or individuals entitled to offer consumer loans;
- employers in the area of capital markets or insurance; and
- public bodies in the area of income tax, regulatory bodies in civil aviation, sea transport or oil and gas mining at the sea.
b) Do internal reporting channels need to allow reporting in writing, orally or both?
The internal reporting channels need to allow both reporting in writing as well as orally (through an audio message).
c) Procedures for internal reporting and follow-up: does the Local Law require legal entities to adopt internal reporting systems with the following elements?
- Channels able to ensure the confidentiality of the identity of the reporting person and the protection of third parties mentioned in the report:
- Acknowledgement of receipt of the report to the whistleblower within seven days of receipt:
Yes, with two exceptions:
The designation of an impartial function/team to manage follow-ups on reports and maintain communication with the whistleblower:
- the whistleblower does expressly not wish the receipt of their report to be confirmed; or
- the confirmation of the receipt would lead to disclosure of the identity of the whistleblower.
Yes, a person must be designated to receive the reports, confirm their receipt, and follow up on the information reported.
Any other follow-up requirements including those for anonymous complaints:
A reasonable timeframe to provide feedback, not exceeding three months from acknowledgment of receipt or if no acknowledgement was sent, three months from the expiry of the seven-day period after a report is made:
Yes, the designated person must inform the whistleblower in writing about the results of their report within 30 days after they have received the report. In complex cases, this deadline may be prolonged for 30 days no more than twice. That means the longest timeframe allowed by the Draft Law is 90 days after the report has been received.
Providing clear and easily accessible information on internal reporting procedures and external reporting procedures to competent authorities and/or EU institutions/bodies:
Should legal entities take any additional measures in order to comply with the above requirements?
No additional measures are required.
5) Reporting channels: external
a) Has the country designated a competent authority to receive and investigate whistleblower disclosure and retaliation complaints?
The Ministry of Justice is the designated governmental body to receive external reports. It is also, pursuant the Draft Law, the supervisory body over this matter.
b) Is an independent and autonomous external reporting channel already established in the country?
No, the external reporting channel, which is supposed to be established under the Ministry of Justice pursuant the Draft Law, has not been established yet.
6) Processing of personal data
a) Is personal data concerning the reports processed in compliance with local and EU legislation such as EU Regulation 2018/1725 and local privacy laws?
The Draft Law does not explicitly provide for any data protection related measures, although multiple provisions regulate the confidentiality of the information reported and the identity of all persons involved.
7) Record keeping of reports
a) Is there any obligation regarding record keeping of reports as provided for by the EU Directive?
Yes, records of reports made must be kept for five years and must include:
- the date of the receipt of the report;
- the identity of the whistleblower, if known;
- a summary of the information reported and identity of the person reported; and
- the date the case has been closed and the result it has been closed with.
a) Is there any difference between whistleblower protections in the private and public sectors?
The Draft Law does not differentiate between whistleblowing procedures, including protection of the whistleblower, in the public and private sectors.
b) Are whistleblowers protected against all forms of retaliation including threats and attempts of retaliation? Which forms of retaliation are expressly indicated?
Whistleblowers, according to the Draft Law, are protected against retaliatory measures. Any act in connection with the work or other similar activity of a whistleblower which is triggered by a notification and which may cause harm to the whistleblower is deemed as retaliatory measure. In this relation the whistleblowers are protected especially against:
- dismissal from the civil service
- termination of the employment relationship or non-renewal of the fixed-term employment relationship,
- recall from the managerial position,
- the imposition of a disciplinary measure,
- reduction of salary, wages or remuneration or failure to grant a personal allowance,
- transfer or reassignment to another job or post,
- negative career appraisal or performance review,
- failure to allow professional development,
- change working schedule,
- requiring a medical report or an occupational health examination,
- termination or withdrawal from the contract, or
- interference with the right to protection of personality.
c) Does the Local Law provide for any other measures of support such as those indicated in the EU Directive?
The Draft Law requires such information to be available to the general public on the website of the Ministry of Justice. It does not, however, provide for any further measures in the Draft Act itself.
d) Does the Local Law provide for the necessary measures to prohibit any form of retaliation against whistleblowers?
According to the Draft Law, whistleblowers are protected against retaliation as mentioned above. If any person obliged by the Draft Law to secure such protection of whistleblowers fails to do so, administrative fines may be imposed. Also the whistleblower is entitled for material and immaterial damages compensation in relation to the retaliation.
e) Does the Local Law provide for any remedial measures, including interim relief measures?
The Draft Law does not directly provide for such remedial measures. However in case of unilateral dismissal the court may confirm the dismissal (as a form of retaliation) is invalid and in this relation there is automatic reestablishment of the employment in accordance to the Czech Labour Code. Also the burden of proof is on the employer in those cases, similarly as in case of discrimination claims.
f) Does the Local Law provide for exemptions from liability for whistleblowers?
The Draft Law provides for exemption from liability of the whistleblower from disclosure of otherwise confidential information.
g) Does the Local Law provide for sanctions against natural and legal persons that violate whistleblowers’ protection or the duty of maintaining the confidentiality of their identity?
If any person obliged by the Draft Law to secure protection of whistleblowers from retaliation fails to do so, administrative penalties may be imposed.
h) Does the Local Law provide for sanctions in case of false reports?
Knowingly reporting false information may constitute an administrative and potentially even criminal offence.
9) Other issues
a) Under the Local Law, is adopting a whistleblowing system relevant to assess the adequacy of a compliance program? Does this have any value to mitigate or eliminate criminal liability for legal entities?
The existence of an internal system for reporting is, among other things, one of the requirements of the relevant international ISO standards, both within the ISO 19600 standard for Compliance management systems and the related ISO 37001 standard for anti-corruption management systems.
The local law, including but limited to the Draft Law, does not provide for an explicit answer to relevant guidance in terms of whether adopting a whistleblowing system might mitigate criminal liability of legal entities. It may, however, be a contributing factor. Criminal liability of legal entities is a complex issue relying on many factors and needs to be assed in context of each specific situation.
b) Does the Local Law or another law in your country provide for whistleblower reward programs?
No whistleblower reward programs have been introduced.
c) Can companies benefit from any incentives in the case of voluntary self-disclosure of violations they became aware of following an internal report?
No specific benefits have been introduced. For chances of mitigating risks from criminal liability of legal entities, please see above.
d) Will implementing the EU Directive create any issues with obligations provided for under other laws / regulations?
So far, based on the Draft Act, no such specific issues can be foreseen. However, as whistleblowing in general is rather new to the Czech legal system, various legal questions may arise, e.g. in terms of processing personal data or compliance with the Labour Code.
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