Whistleblowing Hotline – Implementation Only with Employee Consent?

Legal basis

Under Section 96 (1) (3) of the Austrian Labour and Constitution Act (the “ArbVG”), the “implementation of monitoring measures and technical systems for employee monitoring” requires participation of the works council if those measures (systems) affect “human dignity”. If there is no works council, these monitoring measures can be adopted pursuant to Section 10 of the Employment Law Harmonisation Act (the “AVRAG”) with the consent of each and every employee.

Monitoring measures include any practices useful to monitor employees and all technical facilities suitable on an objective-abstract basis to monitor employees. Whether monitoring actually takes place or whether the employer subjectively intends to monitor its employees is irrelevant in this context. Furthermore, only permanently established monitoring measures must be approved. Ad hoc inspections, for example in connection with theft, do not require employee participation. Notably, not all permanently established monitoring measures require employee participation¹, only those affecting human dignity.

DSB’s legal opinion

A condition precedent for registration by the Austrian Data Protection Commission (the “DSB”) is the conclusion of a corresponding works council agreement or of individual agreements with the employees since its Decision of 14 December 2012 (Case number GZ K600.320 – 005/0003-DVR/2012).

According to the DSB, a reference to a code of conduct that encourages and prompts employees to report potential infringements is sufficient to assume that a monitoring measure is in place that affects human dignity, because an encouragement to report purported wrongdoings means that employees would permanently monitor each other. However, it will be shown below that the DSB’s opinion is incorrect, since the question of whether the implementation of a whistleblowing system must be qualified as a permanently established monitoring measure under Section 96 (1) no. 3 of the ArbVG depends on the particular way in which the system is set up.

No permanently established monitoring measure

If the whistleblowing system that is put in place

• offers a confidential helpline and a website operated by an independent third party;
• allows the employee to choose whether to disclose his or her identity or to remain anonymous;
• permits employees to report only legally sanctioned incidents (in accounting, internal accounting controls and auditing);
• does not constitute an obligation to report and employees are not obliged to use the available whistleblowing system,

such a system cannot be qualified as a permanently established monitoring measure under Section 96 (1) no. 3 of the ArbVG.

Such a system is simply unsuitable for monitoring employees on a permanent or lasting basis, as a report can only be made in the event of a concrete suspicion restricted to the mentioned areas – comparable to suspicion of theft – and an investigation in the form of an inspection will only be conducted later.

Notification and reporting duty implied by loyalty

Employees already have a comprehensive obligation to be loyal to their employer and are expected to protect the employer’s interests based on the contract of employment. This loyalty obligation implies notification and reporting duties.

Employees are obliged to report any strong suspicions that other employees might be involved in criminal offences or serious misconduct.

Such a system would do nothing more than clarify the loyalty that is already expected from employees anyway and would simply be one of several ways of reporting irregularities. Even after such a system is implemented, employees could still choose other ways to report irregularities.

Human dignity not affected

Even if such a system were a permanently established monitoring measure, it would not affect human dignity, because the scope of reportable incidents would be limited and would include only legally sanctioned incidents. This must be taken into account when balancing the various interests.

The employer’s operational interest in being informed of unlawful incidents must be balanced against the employees’ interest in not being caught in the act of committing a crime that might even be targeted against the employer. Besides the operational interest, the public interest in exposing and preventing irregularities would have to be balanced. It must be taken into account that the margin of tolerance which allows an intrusion into individual rights is not a foregone conclusion, and that the severity of operational interests and those of the public, which a monitoring mechanism will establish, must be considered. This is why the employer’s interests would prevail.

The fact that a whistleblowing system contains the term "system" does not allow it to be qualified as a monitoring measure beyond the scope of the employee's duty to be loyal. Against this backdrop and contrary to the opinion of the DSB, the availability of co-determination depends on the particular way in which the system is set up.

¹Please leave the term “employee participation” (“Mitwirkungsrechte”) by the works council, because we are not talking about employees individual consent.

author: Stefan Kühteubl
co-author: Natalie Hahn