Legal regulation of the protection of whistleblowers
Rights and obligations of whistleblowers, as well as employers, or of the Ministry of Justice, with effect from 1 August 2023, regulates Act No. 171/2023 Coll., on the protection of whistleblowers (hereinafter referred to as "ZOO"), which transposed Directive (EU) 2019/1937 of the European Parliament and of the Council into the Czech legal order on 23 October 2019 on the protection of persons who report violations of Union law.
What is a notification according to the ZOO (whistleblowing law) and what information must it contain?
A notification according to ZOO is any report made through the notification system set up by the relevant employer, while the notification must contain information about a possible illegal act that has occurred or may occur with a person for whom the informant, be it indirectly, performed or is performing work or another similar activity, or with a person with whom the informant was or is in contact in connection with the performance of work or other similar activities and who:
a) has elements of a criminal offence
b) has the characteristics of a misdemeanor for which a fine rate of at least CZK 100,000 is imposed;
c) violates ZOO
d) violates another legal regulation or regulation of the European Union in the area of:
A. financial services, statutory audit and other verification services, financial products and financial markets,
b. corporate income taxes,
C. prevention of legalization of criminal proceeds and financing of terrorism,
d. consumer protection,
E. with product requirements including their safety compliance,
F. traffic safety, transport and traffic on roads,
G. environmental protection,
h. food and feed safety and protection of animals and their health,
i. radiation protection and nuclear safety,
j. economic competition, public auctions and awarding of public contracts,
k. protection of internal order and safety, life and health,
l. protection of personal data, privacy and security of electronic communications networks and information systems,
m. protection of the financial interests of the European Union (according to Article 3255 on the functioning of the European Union), or
n. the functioning of the internal market (according to Article 26, paragraphs 1 and 2 of the Treaty on the Functioning of the European Union) including the protection of economic competition and state aid according to European Union law.
The whistleblower cannot be required to have expert knowledge that would enable him to make an accurate legal assessment of the reported illegal act. However, the notifier may not knowingly make a false report. The whistleblower does not have to be completely sure that the reported illegal act has actually occurred, is occurring or is to occur in the future, however, the relevant circumstances must indicate the veracity of such information.
In the ZOO protection regime, it is also not possible to report facts, the reporting of which could immediately threaten the essential security interest of the Czech Republic.
The notification must also contain information about the name, surname and date of birth, or other data from which it is possible to deduce the identity of the notifier; the identity of the whistleblower is assumed to be true. The notification does not have to contain data according to the first sentence, if it was submitted by a person whose identity is known to the relevant person according to § 10 or to a civil servant according to § 13.
According to the ZOO, a notification that is submitted anonymously is not considered to be a notification, and therefore the liable person is not obliged to assess such a notification as to its reasonableness, and in such a case is not bound by the deadlines specified for handling notifications at the ZOO. Through the notification system http://www.dongwon.oznamit.cz/, it is also possible to submit an anonymous notification, but even in this case it is valid that the employer or the relevant person designated by him is not obliged to address their reasonableness, however, the information provided in an anonymous statement may serve the obliged person as a stimulus to investigate such information.
Protection under the ZOO, however, belongs to the initially anonymous whistleblower from the moment his identity is revealed to a person who could expose him to retaliation.
Who is authorized to file a notification according to the ZOO?
Notification can be submitted by any natural person (typically an employee or business partner) who performs or has performed work (even if indirectly) or other similar activity in connection with which the notification is submitted.
For the purposes of the ZOO, work or other similar activity means:
a) dependent work performed in a basic employment relationship (employment relationship),
b) service (military service),
c) self-employment,
d) exercise of rights associated with participation in a legal entity (partners of a legal entity),
e) performing the function of a member of a body of a legal entity (executives or other statutory bodies),
f) performance of tasks within the scope of the activity of a legal entity, in its interest, on its behalf or on its account,
g) management of the trust fund,
h) volunteer activity,
i) professional experience, internship, or
j) performance of rights and obligations arising from the contract, the subject of which is the provision of supplies, services, construction works or other similar performance.
Applicants for work or other similar activities also fall into the aforementioned list of persons authorized to file a notification.
Protection according to the ZOO also applies to persons who are related to the whistleblowers, persons who provided assistance in finding out the information that is the content of the notification, submitting the notification or assessing its reasonableness, as well as persons who are connected to the whistleblower in some way especially in the work context (see § 4, paragraph 2 of the Act on the Protection of Whistleblowers).
How can a notification be made?
The notifier is entitled to submit a notification according to ZOO in person, by phone or in writing (including digital form) at DONGWON CZ, s.r.o., or appropriate persons designated by him (see below). The company DONGWON CZ, s.r.o. according to ZOO, they must implement an internal reporting system through which whistleblowers can submit their reports. The whistleblower is also entitled to submit a notification to the Ministry of Justice through an external notification system.
An audio recording or recording will be made of the oral notification, which faithfully captures the essence of the oral notification. An audio recording of an oral notification can only be made with the consent of the notifier. The relevant person or authorized employee shall allow the whistleblower to comment on the recording or transcription of the audio recording, if it has been made; the notifier's statement shall be attached to the record or transcript. If the notifier so requests, the relevant person is obliged to accept the notification personally within a reasonable period of time, but no later than 14 days from the day on which the notifier requested it.
A mandatory person according to the ZOO means:
a) public contracting authority according to the law governing the awarding of public contracts, with the exception of
1. municipalities with less than 10,000 inhabitants,
2. legal entities employing an average of less than 50 employees as of January 1 of the relevant calendar year, founded or established for the purpose of meeting the needs of the public interest and not having an industrial or commercial nature, if the region or municipality mainly finances it, exercises decisive influence in it, appoints or dismiss the majority of persons who are members of its statutory or supervisory body, or directly or indirectly have a share of more than 25% in it,
b) an employer employing at least 50 employees as of January 1 of the relevant calendar year, if he is not an obligated person under the Act on Certain Measures Against the Legalization of Proceeds from Criminal Activities and the Financing of Terrorism,
c) a public authority exercising jurisdiction in the area of corporate income tax administration or levy administration for breach of budgetary discipline,
d) a public authority exercising authority and a person performing activities in
a. the field of civil aviation according to the law regulating civil aviation,
b. the area of maritime transport according to § 12i, 12o or 13d of the Maritime Navigation Act, or
c. the oil and natural gas sector in the coastal sea according to the law on the search, exploration and extraction of mineral resources from the seabed and on the safety of activities in the oil and natural gas sector in the sea and
e) an employer who is not an obligated person under the Act on Certain Measures Against the Legalization of Proceeds from Criminal Activities and the Financing of Terrorism, if
a. a person according to § 135 paragraph 1 letter i), p), u), x), za), zc) and zd) of the Act on Business on the Capital Market,
b. a person according to § 534 letter a) to d) of the Act on Investment Companies and Investment Funds,
c. by a central counterparty or trade data register in accordance with the directly applicable regulation of the European Union governing OTC derivatives, central counterparties and trade data registers,
d. a bonded representative authorized to mediate a consumer loan for housing according to the Act on Consumer Credit,
e. an insurance or reinsurance company,
f. a person authorized to mediate insurance or reinsurance according to the law governing the distribution of insurance and reinsurance, or
g. institutions based in the Czech Republic pursuant to the Act regulating the activities of occupational pension insurance institutions.
The relevant persons are DONGWON CZ, s.r.o. appointed the following persons:
How is a whistleblower protected against retaliation?
First of all, the notifier is protected in particular by the confidentiality of the relevant person, i.e. the person who submitted the solution notification. In relation to notifications submitted to the Ministry of Justice (i.e. through the so-called external notification system), only specially authorized employees (such as relevant persons) can access the notification systems. The ZOO prohibits relevant persons and authorized employees from providing information to anyone that could defeat or jeopardize the purpose of submitting a notification. The identity of the whistleblower or any other person protected from retaliation (e.g. a person who helped the whistleblower with the report) cannot be disclosed to anyone else without their written consent. The only exception is the situation where the relevant person or authorized employee is required by law to provide this information to the relevant public authorities. Even in such a case, however, the relevant person or an authorized employee must first notify the whistleblower in writing about providing his identity to the relevant public authorities.
If the relevant person violates the confidentiality of the whistleblower's identity, he may commit an offense punishable by a fine of up to CZK 100,000.
The ZOO also strictly prohibits the application of any retaliatory measures against the whistleblower or other protected person.
Retaliatory measures for the purposes of the ZOO are actions or omissions in connection with the work or other similar activity of the whistleblower, which was caused by making a report and which may cause harm to the whistleblower or another protected person; when these conditions are met, the retaliatory measure is in particular:
a) termination of the employment relationship or non-extension of the employment relationship for a fixed period,
b) release from service, exclusion from service or termination of employment,
c) cancellation of the legal relationship established by an agreement on the performance of work or an agreement on work activities,
d) dismissal from the position of a senior employee or from the official position of a supervisor,
e) imposition of a disciplinary measure or disciplinary punishment,
f) reduction of wages, salary or remuneration or non-granting of personal allowance,
g) transfer or transfer to another job or to another official position,
h) service evaluation or work report,
i) failure to enable professional development,
j) change of working or duty hours,
k) requiring a medical opinion or an occupational medical examination,
l) termination or withdrawal from the contract, or
m) interference with the right to the protection of personality.
The person who must not be subjected to a retaliatory measure has the right to adequate satisfaction if the retaliatory measure has caused him non-pecuniary damage.
How will the whistleblower know if their report has been addressed or resolved?
The ZOO stipulates that each notifier must be notified of the receipt of a notification that meets the requirements of a notification according to the ZOO, within 7 calendar days of its submission, i.e. the notifier must be notified that the notification has been received. No later than 30 days after receiving the notification, the notifier should receive notification of how the notification was assessed. In complex cases, the period for investigation can be extended twice by 30 days (so a total of 90 days).
The notification will be assigned to the so-called relevant person within the internal notification system operated at the web address www.dongwon.oznamit.cz, who will have the obligation to process the notification within the specified period and always notify the notifier of the outcome of the assessment.
After receiving a notice that meets the requirements of the ZOO, the competent person will always assess the reasonableness of the submitted notice and, if the notice is evaluated as reasonable, the employer to whom the notice relates will be recommended by the competent person to take measures to correct or prevent the illegal situation.
During the investigation of the reasonableness of the notification, the competent person may ask the notifier to clarify the information provided or to provide additional information.
What are the penalties for filing a knowingly false report?
A natural person (reporter) commits an offense by knowingly making a false report. A fine of up to CZK 50,000 can be imposed for such an offence.
An offense is committed by a person who prevents another person from filing a report. A fine of up to CZK 100,000 can be imposed for such an offence.
