Whistleblower law for small companies: report unlawful behavior

Whistleblower law for small companies: report unlawful behavior

According to a report by deutsch.radio.cz, since August 2021, smaller companies in the Czech Republic must also have a whistleblowing system that allows their employees to report unlawful behavior in the workplace. This applies, among other things, to cases of corruption, bullying, stalking and violations of internal regulations. The reports from whistleblowers so far have mainly concerned workplace bullying. The Ministry of Justice and the State Office of Labor Inspection will monitor compliance with these regulations, although due to limited personnel capacity, inspections can only be carried out on specific occasions.

Whistleblowers have the opportunity to report grievances in writing, by telephone or in person. Companies must appoint a person to collect and register these reports. The law protects whistleblowers from retaliation by the company, and violations of the regulations can result in a fine of up to one million crowns (around 41,000 euros).

The association of medium-sized and small companies is critical of the directive because it could particularly burden small companies. The financial costs and legal consequences in the event of a complaint could be too great a burden for small businesses. There are also fears that employees could abuse the whistleblowing system to make personal invoices.

From an economic perspective, these new regulations may lead to financial burdens and legal costs for small businesses in the Czech Republic. In addition, the fear of misuse of the system could affect the working atmosphere and the relationship of trust between employees and the company. However, the actual impact depends on the implementation and monitoring of the regulations. Small businesses should therefore prepare to provide appropriate mechanisms and resources to comply with whistleblower policies.