The dispute between the traffic light coalition and the Union over adequate protection of whistleblowers in the discovery of corporate scandals takes on bizarre features: Last week, the SPD, Greens and FDP wanted to hoist a previously failed bill through parliament and the Bundesrat through a procedural trick.

Corinna Budras

Business correspondent in Berlin.

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Marcus Jung

Editor in business.

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Due to the split into two different laws, the majority of the regulations should get by without the blessing of the state chamber. There, the law had already failed in December due to the resistance of CDU/CSU. However, this attempt has died, the split law was taken last Thursday at short notice from the agenda of the Bundestag. Now a joint solution with the Union is to be found, as the Green member of the Bundestag Till Steffen announced.

Federal government must step on the gas

Time is pressing: The planned Whistleblower Protection Act is not only one of the most important commercial law projects of the Federal Government with enormous consequences for many companies – the Federal Government has also been behind schedule since 17 December 2021. By that date, Germany would have had to transpose the EU's Whistleblower Directive into a national law.

The new rules abandon the principle that tipsters must first report information about grievances and possible criminal offences in their own company or within the authorities. You can contact external hotlines or the media anonymously. Private companies with 50 or more employees must also have set up a corresponding whistleblowing system by December 2023, at least according to the current status of the draft law. In the case of infringements, especially when it comes to the personal protection of whistleblowers, the rules provide for high fines.

Dispute over the design of whistleblower protection

Already in the previous black-red coalition, the question of how far the protection of whistleblowers must be designed caused dispute. The Brussels guidelines provide protection only in the event of violations of European rules. Many agree that this does not make sense: If, for example, a whistleblower reports violations by nursing staff in nursing homes, this would not be included. However, the Union considers the solution found between the FDP and the Greens to be too far-reaching: it criticizes the draft as too bureaucratic, it represents an unnecessarily large burden for companies.

In addition to the substantive concerns, there is now also the outrage over the approach of the traffic light coalition to split the text of the law into two projects. This is not an unusual procedure, but in this case only a small part is decoupled, namely regulations with regard to civil servants of states and municipalities. Only these must be approved by the Federal Council.

Union enrages the traffic light approach

The Union senses this as a blatant abuse. The CDU deputy Martin Plum spoke of "chaos days" of the traffic light coalition, his party colleague Hendrik Hoppenstedt even sees it as a "unique low point in constitutional history". The Federal Minister of Justice Marco Buschmann (FDP) makes himself the "stirrup holder of this breach of the constitution". Now the Greens are giving in: talks at the beginning of the week had shown "that an agreement at least does not seem impossible," said Steffen. Now, according to reports, a new attempt is to be made in the Bundestag in April, the Bundesrat could then pass the rules on 12 May.

Experts assume that in Germany alone, around 17,000 companies are affected by the requirements of a whistleblower protection law. Many larger companies have long since taken precautions and implemented their own whistleblowing systems. However, small and medium-sized companies in particular fear the costs of a whistleblowing system. Not every company has its own legal or even compliance department or has set up an internal contact point for whistleblowers. The market for external service providers, on the other hand, has grown by leaps and bounds. Via digital platforms, it is possible to set up and manage whistleblower reporting channels for a double-digit amount per month. However, costs increase significantly when external lawyers and stewards have to be involved.