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The Court of Justice of the EU has ordered the Czech Republic to pay a fine of EUR 2.3 million (approximately CZK 57.6 million) for failing to implement the European Whistleblower Protection Directive on time. The ruling, announced today, also penalized Germany, Luxembourg, Estonia, and Hungary for similar breaches of the directive.
The European Commission (EC) initiated legal action against the Czech Republic in March 2023, citing the country's failure to transpose the directive into national law on time. A whistleblower is someone who reports wrongdoing, illegal activities, or unethical behavior within an organization or government.
The directive, adopted by the EU in October 2019, aims to protect whistleblowers from retaliation, including from employers, when they report criminal offenses or serious misdemeanors punishable by fines exceeding CZK 100,000. The legislation also protects those close to the whistleblower and individuals involved in preparing the disclosure.
While the law was not yet in effect in the Czech Republic, the Chamber of Deputies passed the necessary bill in April 2023, and the Senate approved it in June of the same year.
Czechia extended whistleblower protection requirements in December 2023 to companies with 50 or more employees. Previously, only large companies with 250 or more employees were required to implement systems for confidential internal reporting.
The new regulations aimed to protect whistleblowers from retaliation after exposing issues like corruption. Under the law, if an employer terminated an employee after they made a report, the company would need to prove that the dismissal was not retaliatory.
Many industry leaders in Czechia have previously voiced opposition to the whistleblowing laws. Training employees on their rights and responsibilities under the new whistleblowing system presents logistical challenges, some experts say, especially in industries like construction where remote or outdoor work makes in-person training difficult. While webinars and online modules have helped, reaching all employees remains a struggle.
Despite potential fines for non-compliance, the Ministry of Justice has reassured businesses by stating it will not proactively inspect companies for whistleblowing systems.
Other EU countries have faced similar penalties. The EU fined Germany EUR 34 million (CZK 851 million), for example. The European Commission continues to press for compliance across all member states to ensure comprehensive protection for whistleblowers across the EU.
