Employers will now be obliged to establish an internal whistleblowing system, meaning to designate a person who will receive notifications of suspected crimes or offences in connection with activities of the organization. At the same time, they must inform employees of the possibility to file the notification and provide them with protection-

Who must fulfil the obligations?
• public contracting authorities (except municipalities with a population under 5 000),
• other selected public authorities,
• employers with more than 25 employees
• employers providing selected financial services, consumer credit and those working in the capital market regardless of the number of employees

These organizations are obliged to establish internal reporting systems; they must designate a person competent to receive and investigate notifications and ensure the conditions for the exercise of his or her activity, inform the employees about the possibility of submitting a notification, and make it possible to do so. After the notification assessment, the designated person shall propose appropriate remedial measures, which should be taken. The designated person must not be penalized in any way for the proper exercise of his or her function.

When and how should the notification be filled?

The notification may be filled by an individual and containing information about a possible violation that has come to his or her attention in connection with his or her work. This conduct should have the characteristics of a criminal offence or misdemeanor or violation of law or regulation of the European Union in the area:
• finance and income tax of the legal person
• terrorist financing and money laundering
• consumer protection
• transport safety
• environmental protection
• public procurement

The notifier may make the notification orally or in writing, although it may be made also anonymously. At his or her request, it must be allowed to submit the notification in person. The designated person must inform the notifier within seven days about receiving the notification and update him or her about the examination results within 30 days. This period may be extended twice for 30 days. In case there is a justified notification, the designated person shall propose the adoption of measures to prevent the behavior from happening or to remedy the situation. The notifier must be informed of the outcome and, if the notification is found not justified, the person must be advised what the authority he or she can turn to further is. In line with the Directive, the proposal of the Czech Bill sets out more detailed rules for the mandatory recording of notifications and their retention for five years. The designated person and third parties who gain access to the notifications must not provide any information that could undermine the purpose of the notification.

Internal notification systems

The various requirements for internal notification systems are set out in Section 9 of the proposal, while other obligations arise from other legal provisions and regulations. In particular, emphasis is put on the status of the designated person and on informing the notifier about the investigation of his or her complaint.

A third party may be assigned for the management of the internal notification system. At the same time, private employers with less than 250 employees can share the system with another employer. In neither case, however, this does not relieve them of their responsibility so that they cannot outsource the management of the system without contractually ensuring that the third party will be operating the notification system with an adequate standard.

The penalty for breach of this duty can be up to 400 000 CZK or 3% of net turnover or up to 1 000 000 CZK or 5% of net turnover.

What is the situation in the Czech Republic?

The government submitted a bill proposal to the Chamber of Deputies on 9 February 2021, and it is now being discussed by the committees of this Chamber. However, the question is whether the proposal will be addressed before the elections or whether it will have to be resubmitted because of forming a new government and the Chamber of Deputies. The law is expected to come into force in line with the Directive on 17 December 2021. Obliged entities will have an additional deadline of 31 March 2022 to set up the internal reporting system.

There are already external services offering to manage these systems, notification applications, or you can contact us. We will be happy to help you with this matter.

See the 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 below.