Whistleblowing in the Czech Republic: duty or opportunity?

The aim of the Whistleblowing Act is to strengthen the protection of whistleblowers and thus promote a safe atmosphere in companies. While for companies employing more than 249 employees these obligations came into force immediately in August, employers with 50-249 employees are subject to a transitional period that allows them to comply with these obligations until 15 December 2023.

Whistleblowing in a nutshell

The main requirement of the law is the introduction of an internal whistleblowing system or whistleblowing tool, which will allow employees to report defined illegal actions in the company. According to the law, the whistleblowing system should allow for reporting in writing, orally or upon request in person.

To be truly effective, the whistleblowing tool should be easily accessible to employees and making a report should be simple. It is equally important that the tool chosen is credible to employees and that they are not afraid to report.

According to Lenka Gomez Tomčalová, an attorney at Z/C/H Legal, choosing the right whistleblowing system is something that most companies stop at.

"Some obliged entities tend to resort to traditional solutions in the form of dedicated telephone lines, e-mail or even physical mailboxes out of cluelessness. Neither of these solutions is optimal. Fortunately, there are a number of professional providers of internal information systems in the form of IT solutions on the market that are better able to provide the functional essentials with an emphasis on anonymity and information protection."

Rely on NNTB, the most trusted whistleblowing platform in the Czech Republic, and embed it in the Pinya HR software environment that your employees will know intimately. With just one click, whistleblowers can quickly and conveniently navigate from Pinya HR directly to the NNTB form, where they fill out their complaint and submit it for review.

What to watch out for

In addition to the implementation of the reporting channels themselves, companies have additional obligations under the law. Companies must designate a competent person to review the notifications and propose measures to remedy or prevent the violation. The relevant person must act impartially, maintain confidentiality and ensure that no sensitive information about the whistleblowers or other details of the notification are disclosed.

Companies must also ensure that notifiers are notified of the receipt of the notification as well as the results of the assessment of the notification. Another duty is to take proposed measures to remedy or prevent the infringement following notifications.

Last but not least, companies must ensure that whistleblowers are not subject to retaliatory measures such as termination of employment, pay cuts or reassignment in connection with whistleblowing.

From duty to opportunity

Although the Whistleblower Protection Act may seem at first glance to be an unnecessary administrative burden for companies, the opposite is true. The introduction of a whistleblowing system brings a number of benefits and opportunities for companies.

"In addition to fulfilling legal obligations, the correct and effective implementation of whistleblowing brings a number of positives to employees and the company - in particular, it contributes to building a healthy, safe and responsible corporate culture, improving conditions in the workplace and, in general, it could be said to extend the protective function of the employment law framework to another area. It can improve an employer's reputation, integrity and standing with both current employees and potential job applicants, which is often invaluable given the increasingly tight labour market. A well set-up system can significantly contribute to the protection of the company's reputation and potentially prevent negative legal and economic impacts on the company or its reputation even if an incident occurs," says Lenka Gomez Tomčalová.

According to some surveys and analyses, companies with a functional system settle fewer lawsuits, have lower settlement costs with disgruntled employees, and receive almost half as many negative media mentions.

And it's not just companies that profit from whistleblowing. The introduction of a whistleblowing channel also contributes to building trust and satisfaction among employees themselves. Attorney Lenka Gomez Tomčalová adds: "Just being aware of the existence of a whistleblowing channel in the workplace can often have a preventive effect. It turns out that when people in an organisation know that they have the possibility to report illegal or unethical behaviour, they are happier, more responsible and behave more ethically. This not only helps to reduce the incidence of, for example, bossing or other forms of bullying or illegal behaviour in the workplace, but also makes it easier to detect and eliminate such behaviour. Last but not least, employees feel safer - which of course also helps build trust in the company they work for."

Risks associated with whistleblowing

The Whistleblower Protection Act clearly identifies who is the obliged entity and who must therefore comply with all obligations under the Act from a certain date. The first major risk thus arises from failure to comply with these conditions. Employers who fail to comply with the above-mentioned obligations by the specified date are liable to a fine of up to CZK 1,000,000.

Another risk is the possibility of using the external notification system of the Ministry of Justice. Because employees have the option to choose which notification channel to use, they may choose the external one. However, such a scenario is not in the interest of any company. Why?

"In such a situation, the employer loses control over what is happening in the employer's workplace and any illegal situation or conduct will be dealt with by the public authority, which may impose a sanction or file a criminal complaint against the employer. If the employer has a functioning internal whistleblowing system in place in which its employees have confidence, it can avoid losing control over the entire situation and to some extent manage its resolution, including the consequences associated with it," says Lenka Gomez Tomčalová.

With the whistleblowing module in Pinya HR, there is no risk of using an external notification system. Employees can access the whistleblowing form directly from Pinya HR and it only takes a few minutes to report a complaint.

It is therefore always useful to choose from whistleblowing tools that allow anonymous reporting. Employees often confide sensitive information and, because they fear that it could be used against them, they do not want their name mentioned. Therefore, it is advisable to give them the opportunity to make a report anonymously.

Employees generally feel more secure due to anonymity and are therefore more likely to report. This gives the employer a better chance of avoiding some unpleasant situations (such as employees using the DOJ's external reporting system).

Last days without whistleblowing

The date for the introduction of whistleblowing and the fulfilment of all the requirements under the law for companies with 50 to 250 employees is inexorably approaching. Whichever whistleblowing platform you choose, make sure it meets all the requirements of the law, is simple and trustworthy.

Make sure your employees know that their identity and other sensitive information will not be disclosed and that they and those connected to them will not be subject to retaliation. Whistleblowers need to be sure that the internal whistleblowing system is actually working and that filing a report is not just a futile exercise.

Only in this way will all your efforts pay off and the introduction of whistleblowing tools will bear fruit in the form of compliance with legal obligations, but above all a safe working environment, a healthy company culture and satisfied employees.