Invalidity of a termination due to violation of the Whistleblower Protection Act?

Judgment review: LAG Lower Saxony of 11.11.2024 - 7 SLa 306/24

Introduction

In its ruling dated November 11, 2024 (7 SLa 306/24), the Lower Saxony Higher Labor Court (LAG) established important principles regarding the invalidity of a dismissal due to an alleged violation of the Whistleblower Protection Act (HinSchG). The focus oft he ruling lay in the question regarding which conditions must be met for a dismissal to be deemed unlawful as retaliatory action against a whistleblower. The decision provides guidance to both employers and employees on practical aspects of whistleblower protection in employment law.

Facts of the Case

The plaintiff was employed by the defendant as Head of Legal in the Corporate Office department. In the course of his work, he raised antitrust concerns about a customer contract to the managing director. The defendant subsequently commissioned an external expert report, which found no legal violation. The plaintiff considered the expert opinion to be incorrect and informed the managing director of his objections. Shortly before the end of the probationary period, the defendant terminated the employment relationship with notice. The plaintiff claimed that the dismissal constituted unlawful retaliation for his reports to alleged legal breaches and was therefore invalid under Section 36 HinSchG.

Decision of the Court

The Lower Saxony Higher Labor Court rejected the claim. The dismissal was not invalid due to a breach of the HinSchG. The plaintiff failed to sufficiently establish that the statutory prerequisites for HinSchG were met. In particular, he failed to provide a properly detailed and legally compliant report indicating a statutory violation for purposes of the Act.

Key Findings for Practice

1. Substantiated presentation required

Employees who wish to invoke the protection of Section 36 HinSchG must provide concrete and comprehensible evidence,

• which violations they have reported,
• that these violations fall under the material scope of the HinSchG (e.g. criminal  or administrative offenses, certain violations of EU law),
• and that a message has been sent via the designated internal or external channels.

Vague references or mere disagreements of opinion in the course of day-to-day work do not suffice to trigger the protections under Section 36 HinSchG.

2. Burden of proof and reversal of the burden of proof

The burden of presentation and proof for the existence of a lawful notification and subsequent discrimination lies initially with the employee. Only when these requirements have been sufficiently established does the reversal of the burden of proof under Section 36 (2) HinSchG apply with regard to the causality between the notification and the discrimination. The employer must then prove that there were legitimate grounds for the dismissal unrelated to the notification.

3. Scope of protection of the HinSchG must be interpreted narrowly

Not every internal legal assessment or general compliance activity is covered by whistleblower protection. The protection only applies to reports that relate to a legal area specified in Section 2 HinSchG. In this respect, employees bear the burden of presenting and proving the relevant facts.

4. Formal requirements for the notification

The whistleblower must use the designated reporting channels. Simply informing the line manager is generally not sufficient if an internal or external reporting system is in place.

5. Termination can be invalid despite probationary period - but only in the event of reprisals

A termination may be deemed invalid even during a probationary period or in a small company if it is made as a reprisal against a whistleblower. However, the connection between the report and the dismissal must be credibly and thoroughlysubstantiated by the employee.

6. Employers should document decision-making processes

It is advisable for employers to carefully document the reasons for a dismissal - especially in the case of employees who have reported information. This way, in the event of a dispute, it can be proven that the dismissal took place regardless of a possible report.

Practical Tip

Employees who intend to invoke the protection of the HinSchG should submit their information as specifically as possible, documented and via the designated channels. Employers should clearly define their compliance structures and, in the event of dismissals, record the decision-making process in a comprehensible manner. The judgment of the Lower Saxony Higher Labor Court underscores that the protection of the HinSchG does not automatically apply to every internal criticism or legal assessment. Only those who fulfill the statutory requirements and report their information in a formally correct manner can assert special statutory protection.