by Dr. Tamás Balázs, Attorney-at-law, Partner, Associate Professor
Although some countries apply specific rules for the so-called “whistleblowing” within the private companies for a long time, this topic only appeared in Hungary’s legal regulation in 2014. According to our experience this issue is getting more and more important among our clients.
Since 2014, private companies have been entitled to apply specific internal regulations which entitle their employees for filing notices to the employer about other employees. The law describes the general requirements of the notice and the investigation procedure. The Hungarian regulation shall always be applied by the company or the affiliated company operating in Hungary in order to obey the laws and avoid any lawsuits or fines.
It is very important that the Hungarian National Authority for Data Protection and Freedom of Information must be notified about the fact of operating such system at the company, at least 8 days prior to starting the system. A further rule is that an information material regarding the internal whistleblowing system and about the procedure of notices shall be displayed on the webpage of the employer. Every employee of the employer may file a notice into the system either under his own name, or anonymously, however, the employer may lawfully choose not to investigate the cases which have been reported anonymously. Otherwise, the employer is obliged to start the investigation based on the notice. The employee filing the notice must declare his good faith in his notice. The data of the employee filing the notice, as well as the data of the employee concerned with the notice shall be controlled secretly throughout the whole procedure and sensitive data of the concerned employees (such as personal data concerning racial or national origin, political opinion or party membership, religious or other philosophical belief, health, addiction, criminal personal data) must not be stored at all.
The employee filing the notice shall be informed about the results of the investigation and the measures taken. The internal investigation may be neglected if a notice with the same content has already been investigated within a time period of 6 months, or if the occurred damages are disproportionately low.
Upon starting the investigation the employee concerned with the notice shall be informed about the notice, as well as about his rights according to the Act on Informational Self-determination and Freedom of Information (hereinafter referred to as Act). According to the requirement of fair trial the concerned employee shall have the right to explain his point of view even through a legal representative, and to prove his statements.
The company may hire an attorney in order to receive and investigate all of the notices, give legal advice concerning data protection and other applicable Hungarian regulations, keep in touch with the concerned employees, etc. It is important, that special incompatibility rules apply for such attorneys. The employer, or the mentioned attorney shall investigate the case within 30 days, which may only be extended in case of especially justified reasons, simultaneously informing the concerned parties about this fact. However, the investigation shall be closed in all cases within a maximum time period of 3 months.
If, as a result of the internal investigation, a criminal investigation seems to be necessary, the employer shall report the case to the Hungarian authorities. If a criminal investigation is not necessary, but the interests of the employer have been violated by the employee concerned with the notice, the employer may take certain measures against this employee according to the Labor Code of Hungary. Forwarding of data to foreign countries is bond to special requirements of the Act and other acts. If the notice turned out to be unfounded, all of the data concerning the case shall be deleted from the database within 60 days of closing the procedure.
These new rules are important in order to develop effective whistleblowing systems, but their success depends mainly on the employers. It is essential that the employees shall be informed that they will not face disadvantageous consequences for filing a notice in the system. It is equally important is to overview any and all internal regulations which concern this issue whether they comply with the Hungarian regulations on deadlines, procedure guidelines, data controlling and so on. Keeping in mind that the effectiveness of the system is within the interest of the employer too, in some cases the education of the employees regarding the usage of the system may be a reasonable requirement as well.