Compensation

If an employer or another person breaches the prohibition of reprisals under the German Whistleblower Protection Act (HinSchG), they are obliged under Section 37 (1) HinSchG to compensate the whistleblower for the resulting damage. This covers every form of detriment connected to a justified report or disclosure – for example dismissal, a formal warning, transfer, denied promotion, a salary cut or the withholding of training. The claim extends to both material financial losses, such as lost wages, and non-material damage; under Section 37 (1) sentence 2 HinSchG, any damage that is not a financial loss must be appropriately compensated in money.

The reversal of the burden of proof in Section 36 (2) HinSchG is central to enforcing this claim: if a whistleblower suffers a detriment after making a report or disclosure, that detriment is presumed to be a reprisal for the report. In this case the person who caused the detriment must prove that it was based on sufficiently justified grounds or that it was not connected to the report. This reversal of the burden of presentation and proof considerably eases enforcement of the compensation claim, because whistleblowers would otherwise rarely be able to prove the inner motivation of the person disadvantaging them.

The claim requires that, at the time of reporting, the whistleblower had sufficient reason to believe that the reported information was true (good faith) and fell within the material scope of the Act. As a mirror image, Section 38 HinSchG limits protection: intentional or grossly negligent false reports in turn give rise to a compensation claim by the affected person. The compensation claim under Section 37 is therefore a cornerstone of practical whistleblower protection – it reinforces the prohibition of reprisals and makes it economically risky for companies to act against employees who report.