Hungary has adopted a new law on the protection of whistleblowers, which entered into effect on 24 July 2023. The law implements the EU Directive 2019/1937 and introduces significant changes to the current legal framework on whistleblowing in Hungary.
Who is affected by the new law?
The new law applies to companies with at least 50 employees and certain public sector entities. Companies with less than 50 employees can set up an internal reporting channel voluntarily.
The new law also defines a broad range of persons who can report as whistleblowers, including employees, contractors, suppliers, shareholders, directors and board members.
What are the obligations of companies?
Companies that are required to set up an internal reporting channel must comply with several obligations under the new law, such as:
- Setting up the channel and designating the operator;
- Informing employees and other potential whistleblowers about the existence and operation of the channel, as well as their rights and obligations under the law;
- Complying with strict data protection requirements when processing personal data related to whistleblowing reports;
- Investigating all reports received within 60 days and providing feedback to whistleblowers;
- Taking appropriate measures to remedy any misconduct identified as a result of the investigation;
What can be reported?
The new law allows whistleblowers to report any unlawful or suspected unlawful acts or omissions, as well as other abuses, that they become aware of in connection with their work or contractual relationship with the company. Whistleblowers can also report breaches of internal rules or policies of the company.
How can reports be made?
The new law establishes a three-step system for reporting abuse:
- The first step is the internal reporting channel, which enables whistleblowers to report within the company. The internal reporting channel can be operated by a designated person or department of the company, or by an external agent, such as a whistleblowing attorney. The operator of the internal reporting channel must be independent and cannot be instructed by the company.
- The second step is the external reporting channel, which allows whistleblowers to report to the competent authorities, such as regulators, prosecutors or courts.
- The third step is public disclosure, which permits whistleblowers to make their reports public, such as through the media or social networks.
How can we help you?
Our law firm has extensive experience implementing and maintaining whistleblowing systems for our clients. We can help you comply with the new legal requirements and ensure that your internal reporting channel is effective and secure.
We can also assist you in handling any reports that you may receive from your employees or other persons who work with you. If you are interested in our services, don’t hesitate to get in touch with us for a consultation. We are glad to assist you in achieving professional compliance with the new whistleblowing law.