Does the works council have approval rights for the reporting policy?

Works Council approval is mandatory

Yes, the works council has the right to approve the reporting procedure. This approval right is based on Article 27 of the Works Councils Act and applies to regulations concerning workplace consultation, complaint handling and similar personnel matters — the internal reporting procedure under the Whistleblower Protection Act falls within this scope. An employer who establishes and implements the reporting procedure without involving the works council is therefore omitting a step that is legally required, even if the procedure otherwise meets all substantive requirements.

In practice, this is the point where many organisations get stuck. There is often a procedure in place — sometimes a document, sometimes an off-the-shelf template — but the approval process with the works council has not been completed or documented. This means the procedure exists on paper, but was not established in the manner the law requires. For organisations without a works council, for example because there is no obligation to establish one, this approval requirement does not apply in the same way, but the question of whether a works council should have existed is separate from the question of whether the reporting procedure is mandatory.

Where this is stated: Article 27 WCA and Article 2 WPA

Article 27 of the Works Councils Act states that works council approval is a requirement when establishing, amending or withdrawing regulations in the field of personnel policy, including complaint and reporting procedures. Article 2 of the Whistleblower Protection Act then describes what the internal reporting procedure itself must meet — the content, separate from the question of who must approve it. The Whistleblower House advises employers in its information on this to recognise the connection between both processes: the procedure must be substantively correct and established in the correct manner.