On occasion, employee reporting can help companies to detect wrongdoing, aid them in identifying where risks of misconduct are occurring and, not least of all, be useful when defending against criminal allegations. It is one of many building blocks in establishing and maintaining corporate compliance – by no means is it special or exceptional. A company’s internal whistleblowing system, as an institutionalised and protected framework for making reports, has come to be regarded as an important element of comprehensive and efficient compliance systems. The fact that there has not been a statutory obligation for all industries to implement such reporting systems has had no impact on the development of this best practice.

The rules for internal whistleblower systems – much ado about nothing

For internal reporting systems to be accepted and viable – meaning in order for them to function – the prerequisite is that employees must be protected from retaliation, provided that they have not made their reports frivolously or abusively. With its decision that influencing whistleblowers can, under certain circumstances, even result in pre-trial detention, the Federal Constitutional Court, Germany’s highest court, has also clearly signalled that its position aligns with this assessment. Before, the European Court of Human Rights had already afforded whistleblowers extensive protection against unfair dismissal and criminal prosecution because employees – due to their objective proximity to any misconduct – are best capable of acting in the public interest and reporting any wrongdoing to their employers or the public.

Oct-Dec 2019 issue

Hengeler Mueller