Germany: employees’ rights during internal investigations are laid out in draft legislation on ‘integrity in the economy’

On, 16 June, Germany’s Federal Council of Ministers adopted the draft “Act to strengthen integrity in the economy.’ Criticized by the Employers’ Federations, but provided for in the ruling coalition contract, the legislation brings together a series of measures that are much stricter than before, and that apply to companies in which one or more employees have been guilty of wrongdoing. When the text, which is to be put to the vote in the Bundestag before the summer recess, becomes law, the public prosecutor’s offices will no longer have to limit themselves to investigating only a few employees directly involved, as for instance in Volkswagen’s ‘Dieselgate’ case. Instead, with this legislation, they will be able to address the whole company in question. Potential penalties which are currently limited to €10 million, will also be significantly increased and may now be up to 10% of the company’s annual turnover in the case of companies with an annual turnover of more than €100 million. Companies with well-developed compliance mechanisms and that launch internal investigations will also be increasingly taken into account and serve as mitigating circumstances that can result in lighter sanctions. In this respect, the new law specifies the legal framework for internal investigations, which, inter alia, will have to intend and provide for transparent employee interview procedures, and in particular ensure it is possible to check that no pressure has been exerted on the employee. Employees should also be warned that their testimonies may be used against them and that they may wholly or partially refuse to testify. In order to ensure that no pressure is exerted, employees may call upon a lawyer of his/her choosing, or a staff representative. Until now, current legislation and labor law did not provide any details on the rights of the employee in relation to this type of internal investigation. The new law will finally authorize the public prosecutors in charge of investigations to requisition the results of internal investigations carried out on behalf of the company.