EU Whistleblowing Directive – Hungary

✅ Whistleblowers protection already in place

Hungary implemented a legislation for whistleblowing protection in 2013.

The law gives a framework for reporting and investigation procedures. Private companies operating or having subsidiaries in Hungary have an obligation to implement a whistleblowing system after notifying the the Hungarian National Authority for Data Protection and Freedom of Information, at least 8 days before its implementation. Employers are obligated to proceed to an investigation when receiving a report (however anonymity of the whistleblower is not mendatory and employers can choose to dismiss a report if it is anonymous).

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📖 Current implementation status

On May 25, 2023, Law XXV of 2023 concerning complaints, public interest reporting and whistleblowing rules was published in the Official Gazette, following the signature of the President of the National Assembly.

The new law transposing the EU Directive will enter into force 60 days after its publication in the Official Gazette, i.e. on July 25, 2023.

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🆕 New Requirements

• Scope of application: concerned organisations

All companies with at least 50 employees are required to implement an internal whistleblowing system. As far as the employee threshold is concerned, not only direct employees, but also people working under a mandate or contract must be taken into account.

Companies with fewer than 50 employees are not required to do the same, but can still set up and manage an internal whistleblowing channel to promote and maintain legal compliance.

As a relief for employers with between 50 and 249 employees, they can set up and manage a common internal reporting channel (at group level) rather than an independent system.

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• Internal whistleblowing system

The new Hungarian law introduces a three-stage system for reporting abuse and misconduct, as follows:

• The first stage is the internal reporting channel, through which people can report within their company
• The second stage is an external reporting channel, through which individuals can report to the relevant authorities
• In the third and final stage, the individuals concerned can make a public disclosure of their report, under certain strict conditions

The internal reporting channal can be managed by a person or department designated by the employer, and must be independent in its function, i.e. it cannot receive instructions from the employer.

If a company does not wish to manage the whistleblowing channel internally, it can appoint a whistleblowing lawyer or other external organisation for this task.

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• Obligations for concerned organisations

The main tasks and obligations for companies required to implement an internal whistleblowing system are to:

• Implement the whistleblowing channel and designate the person, department or external agent for its management;
• Comply with data securty requirements when implementing and managing the internal channel;
• Inform employees about the functioning of the whistleblowing system and data protection aspects, both before and after the system is set up;
• Investigate all reports received within a given timeframe
• Take the necessary steps to remedy violations and misconducts following investigation of the report;
• Ensure that the whistleblower is not disadvantaged as a result of making a report