The new Hungarian Whistleblower Protection Act, enacted as Act XXV of 2023, marks a significant shift in the country's approach to whistleblowing. This legislation was introduced to align Hungary with the EU/2019/1937 Directive, which mandates whistleblower protection in most EU member states. The primary objective of this law is to enhance transparency, protect employees, and reduce potential harm caused by illegal activities within organizations.

Organizations in Hungary now have specific deadlines for establishing internal reporting channels based on their size and type. Companies with at least 250 employees were required to set up systems by July 24, 2023, while those with at least 50 employees must do so by December 17, 2023.

The law protects bona fide whistleblowers from adverse consequences, ensuring that employees cannot be penalized for reporting misconduct, such as dismissal or reduced benefits. However, whistleblowers must act in good faith and comply with the law and their employer's internal rules.

Employers have the option to manage the whistleblowing system internally or seek external assistance, but external parties must not have prior relationships with the employer. Collaboration among employers with 50 to 249 employees is encouraged to share the system's maintenance costs.

Non-compliance with the new law can result in penalties and other legal consequences, monitored by the employment supervisory authority.
Employers operating internal systems must appoint designated employees, develop procedures, provide privacy notices, and establish communication channels. They also need to train employees, investigate reports, and take appropriate legal action.

For employers choosing to operate external systems, they must select a whistleblower protection lawyer or third-party organization, develop internal procedures, prepare privacy notices, and enter engagement contracts. Employers must also supervise the activities of external organizations.

AZS Partners András and Zsigmond Law Firm can assist organizations in Hungary with full legal compliance regarding the Whistleblower Protection Act. We offer services such as drafting whistleblower policies, preparing legal documentation, providing employee training, and setting up necessary processes for implementing and operating whistleblowing systems.

You may find further information in our summary:

New amendment to the government decree on extra profit taxes affecting pharmaceutical industryUseful information about the whistleblowing system in the light of the new Hungarian whistleblower protection act

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