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Freshfields Risk & Compliance

| 5 minutes read

WorkLife 2.0: Austria’s New Whistleblower Protection Act – Part 2

On 25 February 2023, Austria’s Whistleblower Protection Act (Act) entered into force. The Act transposes the EU Whistleblowing Directive (Directive 2019/1937/EU; Directive) into Austria’s national law.

This is the second in a series of blogposts exploring three specific legal and practical whistleblowing issues to be considered by companies operating in Austria.

1. Whistleblower protection against termination

As mandated by the Directive, the Act inter alia protects whistleblowers and persons close to them (e.g. colleagues) against retaliatory measures provided that the whistleblower complies with certain diligence requirements. This includes protection against a retaliatory termination of employment.

Whistleblowers within the scope of the Act now benefit from a particularly effective protection against termination (without the usual 14-days-contestation period, which in the past has been repeatedly criticized as problematic from an EU law perspective), a reverse burden of proof and an entitlement to be compensated not only for pecuniary loss but also for personal injury suffered. 

According to Austrian law, if a termination of employment is found to be retaliatory, the termination shall be null and void. This means that a wrongfully dismissed whistleblower may file a lawsuit claiming continued employment within an objectively reasonable period of time (which pursuant to the Austrian Supreme Court depends on the individual case and may even extend beyond six months). This is remarkable because Austrian law, in case of a termination based on an illegal motive, generally provides to employees only the possibility to contest the termination within a period of 14 days (for example in the case of a discriminatory termination based on gender, disability, ethnic origin, religion or belief, age or sexual orientation), and only if such contestation is successful the termination would be declared void.

Further, the Act specifies that in case of a retaliatory termination, the employer will be obliged to compensate the whistleblower for any pecuniary loss and personal injury suffered. The Act thereby again chose a different approach than in the case of discriminatory terminations, where employees must choose between contesting the termination or claiming damages. And although the Act does not provide for any specifications or guidelines on how the compensation for personal injury shall be determined, it is likely that courts will apply the same compensation principles as established for discrimination cases under the Austrian Equal Treatment Act (Gleichbehandlungsgesetz), but this remains to be seen.

In the context of retaliatory terminations, the Act also introduces a reverse burden of proof in favour of whistleblowers. The whistleblower must generally (only) show and substantiate that the employment relationship was terminated in retaliation for the whistleblowing. The employer must then show that, after weighing all circumstances, there is a higher probability that another – non-retaliatory – motive was decisive for the measure, which is very similar to the reverse burden of proof in case of a discriminatory termination. 

2. Anonymous reporting

Anonymous reporting is a highly delicate topic in Austria as it is often viewed as a gateway for false accusations.

The Act does not require entities to provide for anonymous reporting (without prejudice to any obligations arising from other legal acts, such as for example the obligation to accept anonymous reports by the Austrian Financial Markets Authority).

Nevertheless, from an employer perspective, it is generally recommendable to provide for the option of anonymous reporting as this may encourage whistleblowers to provide information resulting in the detection and prevention of breaches that otherwise would not be reported at all, would be reported externally or would even be publicly disclosed.

The Act does, however, provide that whistleblowers who report anonymously or publicly disclose information on breaches anonymously, but are subsequently identified, shall nonetheless qualify for the statutory whistleblower protections granted by the Act. Thus, an anonymous whistleblower who succeeds in proving his whistleblower status, may qualify for whistleblower protection even if the internal whistleblowing policy does not provide for the possibility of anonymous reporting.

Further, the Act implies that accepting an anonymous report triggers follow-up requirements, which – if not followed properly – may, under certain conditions, enable a whistleblower to a protected public disclosure. Such follow-up requirements may differ from those in case of (merely) confidential whistleblowing. For example, where an anonymous whistleblower uses a telephone line or another voice messaging system for his report and where this report is followed-up by a personal meeting, he must be granted the right to check, rectify and agree the minutes of this meeting by signing them provided that this is possible without disclosing his identity.

This shows that, even in light of the Act, anonymous reporting still triggers a variety of legal questions: Where does and where doesn’t it make sense to provide for the possibility of anonymous reporting internally? When shall an anonymous whistleblowing report be deemed to be accepted by a company and respective follow-up requirements thus triggered? How shall and should whistleblowing policies and procedures for anonymous reporting deviate from those for (confidential) whistleblowers on an organisational, technical, and material level? How should anonymous reporting be addressed in communications to potential whistleblowers?

3. Possible legal consequences for employers and employees in case of breach

For violations of the Act administrative fines in the amount of up to EUR 20,000 may be imposed (up to EUR 40,000 in case of recurrence) on

  • persons who obstruct or seek to obstruct a whistleblower, the whistleblower's supporters or persons close to the whistleblower or who put pressure on the whistleblower through wilful judicial or administrative proceedings,
  • persons who are taking retaliatory measures,
  • persons who violate the confidentiality obligations under the Act, and
  • whistleblowers who knowingly disseminate wrong information.

The Act does not introduce any fines for violations of the duty to establish an internal whistleblowing system.

Fines may be imposed on natural or legal persons. Whether penalties will be imposed on the employer and/or the employees e.g. actively obstructing a whistleblower will need to be assessed on a case by case basis. Employees may therefore primarily be subject to administrative penalties if they seek to obstruct a whistleblower or knowingly submit false reports.

The Act does not provide for a minimum penalty, so the decision on the penalty amount will be subject to the competent administrative authority's discretion (minor violations of the Act may hence trigger lower penalties). In case of several independent punishable acts coincide, separate penalties shall be imposed.

What Now?

To sum up, employers are – once again – well advised to establish clear procedures to document HR decisions in and for termination cases. Allowing anonymous reporting will generally be a preferred approach from an employer perspective but comes with a range of legal questions which should thoroughly be considered. Further, actively informing employees about potential administrative fines in case of violations of the new Act may serve as a way to whistleblower protection and reduce the number of unfounded or unjust allegations.

Please feel free to reach out to the authors in case you have any further questions or would like to discuss.