Uncover corporate scandals: New law is intended to provide better protection for whistleblowers

The biggest scandals usually mature in a small circle: the diesel scandal falls into this pattern, as does the fraud machinery at the financial service provider Wirecard.

But it's also possible to go one size smaller: data misuse, cases of bullying, sloppy quality control - things can go wrong in many places in companies and authorities.

Rarely do such grievances come to light;

the investigating authorities are dependent on internal informants, so-called whistleblowers, who get the ball rolling.

This is not an easy role for employees, they risk a lot of trouble, there is a risk of dismissal or even the destruction of their economic existence.

Corinna Budras

Business correspondent in Berlin.

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Marcus Young

Editor in Business.

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In the future, employees are to be better protected against such reprisals by the "Act for Better Protection of Whistleblowers".

The draft law is before the FAZ.

Companies with more than 50 employees are thus obliged to set up an internal reporting office that employees can contact anonymously.

The allegations must then be investigated there.

There is also help if the whistleblower does not trust such an internal office: They can also take their information directly to the Federal Office of Justice, which will set up an external reporting office with around thirty new employees on the basis of the law.

If there is imminent danger, for example because of a major environmental scandal, the media can, exceptionally, be involved directly without the threat of reprisals.

Union warned of burdens on the economy

"In the past, there were always cases in which whistleblowers were disadvantaged after the disclosure of grievances," says the draft law from the Federal Ministry of Justice, which is now going to the departmental vote.

With the new rules, the protection of whistleblowers should be improved - in such a way that bureaucratic burdens remain "manageable".

Federal Minister of Justice Marco Buschmann (FDP) is thus launching a legislative project that goes back to his SPD predecessor Christine Lambrecht.

In the last legislative period, however, her attempt failed at the CDU-led Federal Ministry of Economics.

The rules are largely based on a European directive that should have been implemented by December at the latest.

However, this did not happen because of the internal coalition dispute.

The Union had repeatedly warned that the burden on the economy was too high.

However, the delay in the necessary implementation turned out to be a significant burden for the economy.

Corporate lawyers and business lawyers have been discussing for months what direct consequences the directive could have.

This causes great uncertainty.

The question of how to deal with whistleblowers is of particular concern to smaller companies.

Away from large-scale industry and the German subsidiaries of international corporations, no “best practice” has yet emerged among them.

A survey by researchers from the University of Applied Sciences in Graubünden in cooperation with the Munich information service provider EQS shows how urgently compliance systems and whistleblower channels are needed in companies.

A third of 1,200 survey participants from Germany stated that they had reported a case of illegal or unethical behavior in their own company in 2020.

However, there was also a tendency for larger companies to be more frequently affected by grievances than smaller companies.

harassment of works councils

In recent years, small and medium-sized companies in particular have always feared that the effort and costs for the registration offices could overwhelm them.

Even an FDP Federal Minister of Justice Buschmann will not protect the economy from burdens.

According to the planned rules, whistleblowers always enjoy protection when it comes to violations that can result in a fine and threaten life, limb, health or the protection of the rights of employees.

This includes, for example, grievances in nursing homes or harassment by works councils.

The scope of the law is broader than the directive stipulates, so that whistleblowers are spared extensive checks.

For reasons of competence alone, the directive only aims at violations of European rules.

Conversely, companies are protected from malicious false claims: the informer must compensate for the damage.

In addition, companies can minimize the effort required for a registration office by commissioning external service providers such as specialized law firms to do so.

In practice, there are now various approaches to useful whistleblowing systems.

Some compliance officers advise appointing a confidant in the company and working with a mailbox for anonymous tips.

Other experts consider such low-threshold offers to be insufficient.

They recommend external ombudsmen who act as legal counsel for the companies.

In any case, the market for consultants and service providers has been adjusting to the Whistleblower Protection Directive much longer than the federal government.

There is a constantly growing range of digital whistleblower systems in companies, a market segment that commercial law firms have increasingly discovered for themselves.