Whistleblower Protection Act & Protection against Dismissal: How the law protects whistleblowers

The Whistleblower Protection Act (HinSchG) is currently on everyone’s lips – after all, the legislator has managed to transpose the EU Whistleblower Directive into federal law: the Whistleblower Protection Act will come into force on July 2, 2023.

The main focus of discussion is the obligation, from a compliance point of view, for companies of a certain size to set up internal reporting offices. The protection of whistleblowers also has a labor law dimension – the protection of whistleblowers from disadvantages in the employment relationship.

The material scope of application of the Whistleblower Protection Act

The name of the law already gives an idea of its scope: the Whistleblower Protection Act protects whistleblowers – i.e. persons who (want to) make reports or disclosures about unlawful conduct by or in a company.

§ Section 2 of the Whistleblower Protection Act lists in detail what the information in a report or disclosure must relate to in order for the Whistleblower Protection Act to apply. This primarily relates to information about criminal offenses and misdemeanors.

However, “other violations of legal provisions” also fall within the scope of the Act. § Section 2 (1) no. 3 HinSchG lists in detail which areas are affected – and this across all areas of law: starting with money laundering and product safety, through the area of data protection, to quality and safety standards relating to medicines.

And yet the scope of protection afforded by the HinSchG is not limitless: for example, reports and disclosures are not subject to the protection of the law if security interests or interests in secrecy and confidentiality take precedence (Section 5 HinSchG). This applies, among other things, to topics relevant to national security, but also to professional confidentiality regulations (lawyers, doctors, etc.).

The personal scope of use

The Whistleblower Protection Act itself defines the personal scope of application of the law via the definition of the “person giving notice” in § 1 HinSchG.

This primarily protects natural persons who “… in connection with their professional activity or in the run-up to a professional activity have obtained information about violations and report or disclose them to the designated reporting offices.”

However, this does not close the circle of persons covered and protected by the law. For even

• Persons who are the subject of a report or disclosure and
• Persons who are affected by a report or disclosure,

also fall within the scope of protection of the HinSchG.

This shows that, on the one hand, the HinSchG extends within the company – and thus in terms of employment law – to employees at all hierarchical levels, from workers to members of the management board or supervisory board. At the same time, it also applies to self-employed persons such as freelancers, former employees, contractual and cooperation partners, and persons who work in the company but not for it (e.g. cleaning staff of an external service provider).

Protection against reprisals: core of the Whistleblower Protection Act in labor law

The question now arises: What protection does the HinSchG offer whistleblowers at all? The law defines this in §§ 35-37 HinSchG.

If we look at the Whistleblower Protection Act from the perspective of labor law, the focus is primarily on protection against reprisals. This is because all conceivable labor law measures taken against a whistleblower because of whistleblowing – a warning, warning, (summary) dismissal, transfer or even non-promotion – can be “reprisal” within the meaning of Section 36 HinSchG and are prohibited.

Reprisals then have different legal consequences:

1. Measures under employment law, such as (summary) dismissal for whistleblowing, are invalid due to violation of § 36 HinSchG. In future, this will have to be examined in cases of doubt in proceedings for protection against dismissal in the same way as in other cases of special protection against dismissal.
2. The person concerned is entitled to damages, even if reprisal is merely threatened, e.g., termination or non-promotion is threatened if misconduct is reported.

Reversal of burden of proof makes whistleblower protection in labor law efficient – if…

But is all this efficient protection for whistleblowers? No – at least not if those affected have to prove – as is customary in German procedural law – that a reprisal was taken against them because of whistleblowing. After all, in such cases it is likely to be difficult for an individual to prove his or her case in court against an often superior employer, simply because of the organizational and financial superiority of companies.

For this reason, the legislator has included a reversal of the burden of proof in Section 36 (2) HinSchG: If a person experiences reprisal after making a report, it is initially presumed that this is a reaction to the report and thus a prohibited reprisal.

However, it is equally important for employers and employees to know: the reversal of the burden of proof does not occur automatically! According to Sec. 36 (2) Sentence 1 HinSchG, the reversal of the burden of proof only applies if the person concerned claims that the labor law measure is a reprisal due to whistleblowing.

Compensation, but: no right to employment or career advancement!

The Whistleblower Protection Act thus provides employees with quite effective rights and claims: measures under labor law can be ineffective and even merely threatened reprisals under labor law can trigger claims for damages.

At the same time, however, Sec. 37 (2) HinSchG makes it clear that a violation of the prohibition of reprisals does not entitle whistleblowers to the establishment of an employment relationship, a vocational training relationship or any other contractual relationship, or to career advancement.

This also sets limits to the rights of whistleblowers with regard to their employment relationship: a missed promotion due to whistleblowing cannot be sued for, but the financial damage resulting from it certainly can. Incidentally, deviating agreements, e.g. in the employment contract, are invalid in this context.

No free pass for unauthorized blackening

The protection of whistleblowers is the clear goal and focus of the law. To ensure efficient protection, larger companies are therefore required to set up and operate internal reporting offices to enable anonymous reporting.

At the same time, however, the HinSchG also provides for protective mechanisms and entitlements that are intended to have a preventive and at the same time repressive effect against false information – in other words, against unjustified denunciations.

Thus

• notifications and disclosures are to be made non-public first. For example, contacting the press directly is not permitted; contacting the public with a notice is now actually ultima ratio with the entry into force of the HinSchG.
• persons who intentionally or grossly negligently make false reports do not enjoy identity protection. In such cases, those affected have a legitimate interest in knowing who has “blackened” them in order, for example, to be able to claim damages.
• Persons who intentionally or grossly negligently place false reports are threatened with claims for damages or fines.

Conclusion

The new Whistleblower Protection Act provides more legal certainty – for companies, but also for (potential) whistleblowers in companies. There are now clear guidelines as to which companies must set up and operate internal reporting offices and in what form. Employees and others can use these hotlines to report violations of the law without fear of reprisals.

And if whistleblowers do not remain anonymous, whistleblowers are protected – also and especially in terms of labor law – by the prohibition of reprisals in the HinSchG, e.g. against dismissal, but companies are also protected against (deliberate) false reports.