On 20 June 2023, Act No. 171/2023 Sb., providing for protection of whistleblowers (“the Whistleblower Protection Act”) was published in the Collection of Laws of the
Czech Republic, and it came into effect on 1 August 2023. This new Act implements Directive (EU) 2019/1937 of the European Parliament and of the Council of 23 October 2019 on the protection of persons who report breaches of Union law.

The Act came into effect on 1 August 2023, but employers who are not contracting agencies and employ more than 50 employees, but less than 250 employees, were allowed to comply with the duty to implement an internal reporting channel not later than by 15 December 2023.

If you have not started establishing an internal reporting channel yet, you can find below a brief summary of duties arising from the Whistleblower Protection Act.

Aim of the act:
to provide whistleblowers with a guarantee that they will not be sanctioned if they report facts showing that an entity they cooperate with have acted unlawfully.

What is reported:
unlawful acts which:

• Have elements of a crime,
• Have elements of delicts where legal regulations impose sanctions, and the upper limit of such sanction is at least CZK 100 000,
• Violate the Whistleblower Protection Act,
• Violate legal regulations in the fields regulated by the EU (for example, consumer protection, personal data protection, protection of environment, corporate income tax, financial services, etc.)

Who reports:
natural persons who perform a job or other similar activity, e.g. employees, persons in service relationship, volunteers, interns, as well as other persons, such as family members of whistleblowers, and their colleagues. A job or other similar activity is also deemed to be an application for a job or an application for other similar activity.

Reports:
Reports must include identifications of whistleblowers (anonymous reports are only permitted if an obligated entity is an AML obligated person), they must be reasonable and must not be voluntarily false.

Reports are addressed to:
a person designated by an employer; it must be a natural person with a clean record (of criminal convictions), a person of full age, of full legal capacity and an impartial person. Designated persons must not be punished for the due performance of their activities.

How to report:
by means of an internal reporting system which should allow written, oral, as well as in person submitting of reports.

Essential duties of employers:

• To establish internal reporting systems and to implement procedures for reactions to reports and taking of remedial measures – we recommend implementing it by means of an internal guideline.
• To designate persons responsible for accepting and dealing with reports, and to explain to the designated persons their rights and duties arising from the Whistleblower Protection Act (the explanation of rights and duties must be documented by means of a written record).
• To assure concealment of identification of whistleblowers.
• To keep records of received reports, and to keep submitted reports (incl. related documents) for the period of 5 years.
• To publish in a manner allowing remote access information about ways of reporting, about persons from whom they receive reports, and about contact details of designated persons.
• All employers are prohibited to retaliate against whistleblowers and to prevent persons from submitting reports.

Sanctions:

• For the failure to establish an internal reporting system, there is a sanction of up to CZK 1 000 000.
• For the violation of prohibition of retaliation, there is a sanction of up to CZK 1 000 000.

If you have any questions, please do not hesitate to contact Veronika Nožičková, attorney-at-law at VGD Legal, who specializes in labour law (veronika.nozickova@vgdlegal.cz).