Corporate Group Reporting Office (Hybrid)
§ 14 HinSchG vs. the EU objection of 03/2024
TL;DR
§ 14 of the German Whistleblower Protection Act (HinSchG) permits a group-wide reporting office as a 'third party' within the meaning of the EU Whistleblower Directive. The European Commission objected to the German transposition in 03/2024 — keep this under review.
What is a corporate group reporting office (hybrid)?
The hybrid model as a solution:
- The group reporting office as the intake channel (central)
- Subsidiaries have decentralised investigation officers
- The reporting office delegates cases to the subsidiary while protecting confidentiality
Practical example
A DAX group with 15 subsidiaries: a central compliance hotline plus decentralised investigation officers at each subsidiary. Compliant with EU law.
Legal position in Germany and Austria
A group or joint solution is provided for in both jurisdictions, but rests on different provisions. In both cases, the individual legal entity remains responsible for remedying a reported breach.
Germany (HinSchG)
- Entrusting a third party (§ 14(1) HinSchG): An internal reporting office may be set up by entrusting a third party with its tasks — the legal basis for the central group reporting office. Entrusting a third party does not release the employer from the obligation to take appropriate measures itself to stop any breach.
- Joint reporting office (§ 14(2) HinSchG): Several private employers with, as a rule, 50 to 249 employees may set up and operate a joint office for receiving reports; the obligation to remedy the breach and to give feedback to the reporting person remains with the individual employer.
Austria (HSchG)
- Obligation to set up an office (§ 11(1) of the Austrian Whistleblower Protection Act (HSchG)): Undertakings and legal persons in the public sector with 50 or more employees or public servants must make internal reporting possible and set up an internal whistleblowing system.
- Joint office / entrusting third parties (§ 13(4) HSchG): Undertakings and legal persons in the public sector may transfer the tasks of the internal office to a joint office; third parties may also be entrusted with the tasks of the internal office. The rights and obligations that the law imposes on the internal office also apply to any office so entrusted. Austria therefore has an outsourcing or joint solution comparable to the German group solution.
In Austria, responsibility for receiving and handling reports remains with the internal office of the respective legal entity.