The Group Privilege in the HinschG Draft.

The new Whistleblower Protection Act is coming soon. But many questions remain unanswered. One of them is the issue of “group privilege”. We have compiled the most important facts on this special regulation for you.

What is the group privilege?

In the context of the Whistleblower Protection Act, the group privilege means that corporate groups can offer a single reporting office for all their companies. As a result, the integration of such a system is significantly faster, cheaper and less costly.

The group privilege in the explanatory memorandum to the law

The explanatory memorandum in the HinSchG draft is very clear with regard to the group privilege.
The explanatory memorandum to Section 14 I HinSchG-E states:
“In accordance with the principle of separation under group law, an independent and confidential body may also be established at another group company (for example, parent company, sister company, or subsidiary) as a “third party” within the meaning of Article 8(5) HinSch-RL, which may also act for several independent companies in the group.”

According to this justification, a joint reporting office for the entire group should therefore be sufficient in Germany.

Opinion of the European Union unclear

In contrast to the German legislator, the EU’s comments on the Whistleblower Directive are somewhat more vague.
In a statement dated June 2, 2021, an internal central reporting office is considered impermissible for companies with 250 or more employees. The extent to which this also applies to external FIUs is not clear from the statement.

Although these opinions are not legally binding, they are accorded great importance in the interpretation of standards and guidelines.

Conclusion on group privilege

It remains to be seen whether the HinSchG will ultimately meet EU requirements. If the Commission is of the opinion that the law is not compatible with the directive, it will initiate infringement proceedings and, if necessary, refer the matter to the EU Court of Justice.

With a third-party solution such as eagle lsp’s whistleblower system, you are always well advised. Our experts are always well informed and ensure that the whistleblower system complies with legal standards.

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