HSchG: Austrian National Council Implements Whistleblower Directive

Feb 10, 2023 Benn-Ibler Rechtsanwälte

As of last week (1 February 2023), the Austrian National Council (Österreichischer Nationalrat) has passed the Whistleblower Protection Act (HinweisgeberInnenschutzgesetz; hereinafter HSchG) and its associated amendments. This means that the long overdue implementation of the EU’s Whistleblower Directive is now about to be completed. The Austrian Federal Council (Bundesrat), which needs to formally agree as well, is expected to do so on 16 February 2023.

The Act provides for protective mechanisms for individuals who disclose information on legal violations. Protected are individuals who have obtained information due to their current or former professional connections with companies or legal entities in the public sector.

The Act protects reports of violations against regulations and significant irregularities in specific sectors such as public procurement, product safety, transport safety, environmental protection, consumer protection, public health, and criminal corruption law. However, the Act stipulates that only information on infringements in companies or legal entities within the public sector with 50 or more employees are protected. Yet in certain domains of EU law, this protective rule will apply irrespective of the number of employees.

The Act protects whistleblowers from retaliatory measures by deeming such measures (e.g. dismissals, disciplinary measures, etc.) invalid. In addition, whistleblowers are entitled to damages and compensation for any personal damage suffered.

Also, businesses and legal entities within the public sector with 50 or more employees are to set up their own in-house whistleblower reporting systems. Entities operating in particular sectors such as financial services and financial markets are required to set up an in-house whistleblowing reporting system regardless of the number of employees.

Companies with 250 or more employees have six months from the entry into force of the HSchG to set up an internal reporting system. Companies with fewer than 250 employees are required to set up their systems by 17 December 2023 at the latest. However: There are no sanctions for failing to set up in-house reporting systems. Rather, lawmakers believe that establishing internal reporting systems will promote compliance with due diligence obligations of a company's management (although this due diligence obligation shall not be intended to be enhanced or diminished by the Act).

It will also be possible to report incidents to an external reporting unit established at the Austrian Federal Bureau for Anti-Corruption (Bundesamt für Korruptionsprävention und Korruptionsbekämpfung), although reporting to in-house units is deemed preferable. 

3087/A – XXVII. GP (31.01.2023)