The upcoming implementation of the EU Whistleblowing Directive is a good occasion to take a closer look at the cultural implications of whistleblowing in Austria.
Whistleblowing is the report of grievances or punishable acts in companies or organisations. In the currently discussed draft law to implement the EU Whistleblower Directive, whistleblowers are called 'Hinweisgeber' (informant) because many may associate the word whistleblower with someone who 'tells' on a person and not an informant who detects serious issues.
Currently organisations are not legally requied to establish a whistleblowing system except credit institutions. However, larger companies usually set up such systems voluntarily as part of their compliance management system since an internal whistleblowing system mitigates the risk of employees using external channels. There are also several regulations including the Austrian Banking Act, the Austrian Stock Exchange Act, the Austrian Trade, Commerce, and Industry Regulations Act or the Austrian Competition Act, that provide rules regarding the establishment of independent and anonymous systems for the reporting violations of the law. In 2018 the Austrian Federal Competition Authority established a web-based whistleblower system where possible violations against the Austrian antitrust law can be reported anonymously. The Authority can also ask further questions regarding the anonymous report and the whistleblower can answer them anonymously. The Austrian Financial Market Authority has had a similar system since 2014 and the Austrian Public Prosecutor Office against Corruption since 2016.
So far, the new EU Whistleblower Directive has not been implemented in Austria. At the time of writing, there is a proposal from the Austrian Federal Ministry of Labour and Social Affairs under review and likely to be finalised by the end of the year.
Being a whistleblower: is it worth it?
Austrian law currently barely provides for specific protection for whistleblowers so they are at risk of employment law consequences, possible violation of banking Sometimes a person who points out mismanagement or grievances especially in their own organisation may initially face mistrust and be considered to wants to gain a personal benefit by exposing another person. Threats of lawsuits against the media and also specifically against individual journalists associated with whistleblowing are increasing. So-called SLAPPs (Strategic Lawsuits against Public Participation) have also arrived in Austria. As a result, the Austrian Concordia Press Club has set up its own legal service for journalists.
The latest national controversy concerning the treatment of whistleblowers regards Mr Julian H, who produced the infamous 'Ibiza-video', which showed the former leader of an Austrian right-wing party and then vice-chancellor of Austria in a villa in Ibiza in a compromising situation. The publication of the video in 2019 finally led to a new election of the Austrian government. In spring 2022 H. was sentenced to three and a half years for drug trafficking and falsification of documents (the sentence has not become effective so far). This was criticized by a group of NGOs as it is claimed that the decision was a revenge for the Ibiza-video. In contrast, the video had no criminal consequences for H.
Another well-known and intensely discussed current case is the Commerzialbank Mattersburg case. Although the first anonymous report to the Austrian Public Prosecutor Office against Corruption was already filed in 2015, the alleged punishable acts at the Commerzialbank Mattersburg in the province of Burgenland were only exposed in 2020. The investigations and court proceedings are still ongoing.
Whistleblowing in the workplace
Efficient whistleblowing systems are an essential element of a compliance management system and relevant for the prevention of corruption and possible damage to the employer. However, whistleblowing can also be interpreted as an attack against the employer. Making public accusations or using external channels instead of internal whistleblowing systems could be a reason for dismissal currently, and could influence the whistleblower's professional career in the long- run. Whether an employee is justified using external channels depends on the specific situation; the employee is, in general, obliged to prevent the employer from unnecessary harm and use the mildest means. The draft law provides for stronger protection for employees concerning the channel used and possible negative consequences.
In practice whistleblowing can be seen as a chance to prevent further maladministration in an organisation. A whistleblowing system gives the employer an opportunity to identify and stop any potentially illegal activity i as early as possible. On the one hand, it can correct the situation before the authorities are alerted or the public finds out about it. On the other hand, it may avoid financial damages and protect its reputation. If a charge is ultimately brought against it, it could also result in an exemption from punishment or a reduced sentence.
According to the current legal situation under Austrian law the establishment of a whistleblower system requires a works council agreement (which may change depending on the final regulations of the current draft law). One the one hand it is monitoring that affects thuman dignity and on the other hand it qualifies as a personnel data processing. This means that depending on the the legal requirements and depending on the systems used by the individual companies, individual consent of each employee may needed in organisations without a works council.
The rights and restrictions on reporting maladministration result from the employee's duty of loyalty regarding the protection of his or her employer's interests. The employee's duty of confidentiality regarding business and trade secrets is part of the duty of loyalty. Generally, violation of the duty of loyalty may justify dismissal. But in the event of illegal behaviour and depending on its severity, the employer's interest in keeping specific facts secret may no longer outweigh public interest.
An Austrian Labour and social court of first instance ruled that an employee could report his employer to the tax office for tax misconduct, but the employee had to choose the most careful way possible of doing so. In another earlier decision the Austrian Supreme court ruled that an employee has no prevailing duties of confidentiality any longer when it comes to crimes, especially in the case of tax fraud. However, the draft law implementing the Whistleblower Directive will define under which circumstances employees can be discharged from their secrecy obligations more clearly and will give protection from reprisals resulting from a report.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.