Apart from the well-known Wiki-leaks, recent prominent cases of whistleblowing such as Lux-leaks, the Panama Papers or the case of the German geriatric nurse Brigitte Heinisch, who was dismissed after revealing the ill-treatment of elderly people in a Berlin retirement home, continue to highlight the continued relevance of the topic “whistleblowing”. While this has resulted in an increased public awareness and consequent expectation of global corporate accountability, the subject remains a complex matter of opposing interests: on the one hand, the public interest in ensuring that companies, authorities and organisations comply with the law, and on the other hand, the importance of an employee’s duty of fidelity owed to his employer and the employer’s interest in protecting its reputation and desire to remedy any possible misconduct internally before having to go public. In the midst of this stands the uncertainty for the employee who “blows the whistle” as to what legal consequences he risks when reporting misconduct or irregularities.
In Germany, there is no specific legislation dealing with whistleblowing procedures and protection. Some laws such as the German Data Protection Act (Bundesdatenschutzgesetz), the German Labour Protection Act (Arbeitsschutzgesetz), the German General Equal Treatment Act (Allgemeines Gleichbehandlungsgesetz) and the German Works Council Constitution Act (Betriebsverfassungsgesetz) stipulate disclosing rights and duties in specific situations, but general principles on whistleblowing are only provided for by case law (for more details regarding the general legal situation in Germany see our previous blog).
At a recent conference, the ministers of justice of the German federal states criticised this fragmentary protection provided for whistleblowers under German law and called for more effective protection. In this context, the ministers explicitly pointed out the social significance of employees reporting internal misconduct or breaches of law in companies, authorities and organisations at an early stage, and requested that the German Federal Government assess to what extent a legal framework is required in order to protect whistleblowers. Whether, and if so to what extent, a legal framework for all employees will be introduced remains to be seen.
With effect from 2 July 2016, and irrespective of the demands of the ministers, such a legal framework will be provided, at least, for employees of all companies subject to the supervision of the German Federal Financial Supervisory Authority (BaFin): The amendment of the German Act on Financial Services Supervision (Finanzdienstleistungsaufsichtsgesetz) then comes into effect following requirements of European law. It stipulates that employees working for, for example, banks, financial services institutions, insurance-companies, capital management companies, stock-listed companies subject to the German Securities Trading Act (WpHG) and pension funds, who report potential or actual breaches of law may not be held liable for this either by their employer under employment law or by the state under criminal law, unless the notification was false and issued intentionally or by gross negligence. Furthermore, the Federal Financial Supervisory Authority must implement the organisational means for enabling employees falling under the scope of the law to report such breaches of law anonymously and centrally (e.g. by means of a whistleblower-hotline/homepage).
Currently, a duty to implement such reporting structures (directed towards employers) is provided by the German Banking Act (Kreditwesengesetz). However the Act extends only to credit institutions (most banks) and financial services institutions (investment brokerage/advice, financial portfolio management etc.) and in particular does not extend to insurance companies. These institutions must provide for an effective whistleblowing procedure which includes a process which allows employees to report any violation to an appropriate body within the company. The aforementioned amendment of the German Act on Financial Services Supervision now provides for a centralised rather than a decentralised reporting system as stipulated by the German Banking Act. Although the amendment is widely criticised, in particular for providing protection limited only to a certain sector (most likely excluding auditing companies), and not giving detailed specifications as to how such protection is to be ensured, it is a step in the right direction and at least shows that the matter is acknowledged both socially and politically.
For further information and an extensive guide to whistleblowing laws worldwide see our “A global guide to Whistleblowing laws”.