Late whistleblower protection: Germany must pay a fine of 34 million euros
Following objections from CDU, Germany did not implement the Whistleblower Directive until a year and a half later. The ECJ is now punishing the delay harshly.
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The delayed implementation of the EU directive on the protection of whistleblowers into national law is costing Germany dearly. On Thursday, the European Court of Justice (ECJ) ordered Germany to pay a fine of 34 million euros to the EU for breaching its obligations. The Luxembourg judges justified the move with the importance of the high level of protection required by the directive for whistleblowers who report breaches of EU law.
Union blocked
With its ruling in case C-149/23, the ECJ is complying with a complaint filed by the EU Commission in February 2023. The member states were actually obliged to take the necessary measures to legally comply with the provisions of the directive by the end of 2021. The German government was unable to notify the Commission of implementation because the black-red coalition initially failed to agree on a common line. At the time, the SPD wanted the law to also apply to infringements of German law. This was not just in areas such as financial services and tenders, product and food safety, data protection, the environment and health, which are regulated throughout the EU. CDU and CSU were against it.
In December 2022, the Bundestag then passed a bill for "better protection of whistleblowers", – late – with the majority of the traffic light coalition. However, around two months later, the Bundesrat failed to pass the initiative at the instigation of the CDU and CSU. Bavarian Justice Minister Georg Eisenreich (CSU) explained at the time that "effective whistleblower protection" was indeed necessary. However, the current version of the law "goes far beyond what is required and sensible under European law". The CDU took offense at the fact that the traffic light wanted to oblige reporting offices to also deal with anonymous reports. This goes too far, as not every whistleblower is up to no good.
Complaint also against traffic light version
It was not until May 2023 that the coalition with the CDU/CSU parliamentary group was able to agree on a slimmed-down version of the draft and pass it in the Bundestag. This time, the Bundesrat subsequently agreed, allowing the Whistleblower Protection Act to enter into force on July 2, 2023. Compared to the original version, external and internal reporting offices are no longer obliged to set up channels for receiving reports in such a way that anonymous reports can also be submitted. However, anonymous reports will continue to be processed. The maximum fine for cases in which reports are obstructed or reprisals are taken is 50,000 euros instead of the 100,000 initially planned.
The ECJ has also fined Hungary, the Czech Republic, Estonia and Luxembourg for late or non-implementation of the directive. However, the sanctions in these EU states are more moderate. Only for the Czech Republic and Hungary do they exceed the million euro threshold, at 2.3 and 1.75 million euros respectively. Estonia, however, faces a daily penalty payment of 1,500 euros in addition to a lump sum of 500,000 euros if it continues to fail to implement the requirements.
The Whistleblower Network already complained in September 2023 that the German Whistleblower Protection Act still violated the requirements of the directive on 12 points. In a complaint to the Commission, the civil society organization complained about a ban on the disclosure of incorrect information and limited freedom of choice between internal and external reporting. In addition, there is no entitlement to compensation for non-material damages for whistleblowers. The Commission has not yet commented on this.
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Will there be a support fund for whistleblowers?
The network is currently appealing to the EU to use the fines to set up the "overdue support and compensation fund for injured whistleblowers". After all, whistleblowers almost always suffer damage – professionally or privately, in terms of health or financially.
Legal entities such as companies, public authorities and other legal entities with more than 50 employees as well as all companies in the financial services sector must, in principle, provide an internal whistleblower system in accordance with EU regulations and designate a special officer as a contact person. Exceptions can only be made for municipalities with fewer than 10,000 inhabitants.
(vbr)
