SAKURA Law Office | Legal Update by Managing Partner Kenshiro Michishita
September 24, 2026
SAKURA Law Office | Kenshiro Michishita, Managing Partner
SAKURA Law Office has published the tenth installment of its Legal Update series by Managing Partner Kenshiro Michishita: “Amended Whistleblower Protection Act Effective December 1, 2026 — Internal Reporting Systems, Whistleblower Protection, Freelancers and Practical Steps Companies Should Take Before Enforcement.”
Japan’s Whistleblower Protection Act is a central legal framework for enabling companies and other organizations to identify violations of law at an early stage and correct them before misconduct develops into a more serious corporate crisis. An effective internal reporting system can allow an organization to discover wrongdoing itself, investigate it promptly, implement corrective measures and prevent recurrence. Conversely, if an organization engages in retaliation, attempts to identify the whistleblower, imposes contractual restrictions that discourage reporting, or allows identifying information to leak during an investigation, confidence in the reporting system may collapse. The result may be that serious misconduct emerges only through external reporting, regulatory intervention or media coverage.
Act No. 62 of 2025, which partially amends the Whistleblower Protection Act and was promulgated on June 11, 2025, will take effect on December 1, 2026. The reform is not one that can be addressed simply by making a few edits to an internal hotline policy. It expands protection to certain freelancers, prohibits interference with whistleblowing and unjustified efforts to identify whistleblowers, introduces a rebuttable presumption for dismissals and disciplinary measures imposed within one year after certain whistleblowing disclosures, establishes criminal penalties for dismissal or disciplinary action taken because of a protected disclosure, strengthens administrative oversight of the obligation to designate personnel handling internal whistleblowing matters, and further clarifies the importance of communicating internal reporting systems to those eligible to use them.
This Legal Update explains the amended Act as of September 24, 2026, together with the statutory Guidelines, the official commentary on those Guidelines, the Consumer Affairs Agency’s Q&A materials and other published guidance. It focuses on what companies should revise before the effective date, how they should respond immediately upon receiving a report, and how they can protect whistleblowers while conducting a fair and reliable internal investigation.
Executive Summary
From December 1, 2026, the amended Whistleblower Protection Act will come into force. Certain freelancers who have a service or outsourcing relationship with a business — as well as certain former freelancers within one year after the end of that relationship — will newly fall within the scope of protected whistleblowers. Businesses will be prohibited from terminating outsourcing arrangements, reducing transaction volume, suspending business, lowering remuneration or otherwise imposing disadvantageous treatment because of protected whistleblowing.
The amended Act also prohibits businesses, without justifiable grounds, from interfering with protected whistleblowing, including by seeking an agreement that a person will not make a protected disclosure or by threatening disadvantageous treatment if a disclosure is made. Agreements and other legal acts made in violation of this prohibition are invalid. The Act also expressly prohibits unjustified conduct intended to identify a whistleblower.
In addition, as a general rule, where a worker is dismissed or subjected to disciplinary action within one year after making a protected disclosure, that dismissal or disciplinary action will be presumed to have been imposed because of the disclosure. A person who dismisses or disciplines a worker because of protected whistleblowing may face imprisonment for up to six months or a fine of up to JPY 300,000, and a corporate entity may face a fine of up to JPY 30 million. For enterprises with more than 300 regularly employed workers, the reform also introduces enhanced enforcement mechanisms, including orders and on-site inspections relating to the obligation to designate personnel responsible for handling internal whistleblowing disclosures, with criminal penalties for certain non-compliance or obstruction.
Accordingly, pre-enforcement preparation should extend well beyond revising the internal reporting policy. Companies should review who may use the reporting system, how the system is communicated, designation of responsible personnel, conflict-of-interest controls, independent routes for allegations involving senior management, protection against whistleblower identification, legal review before adverse employment action, treatment of freelancers and contractors, evidence preservation, investigation records, and post-report monitoring for retaliation.
1. What Changes on December 1, 2026 — The Internal Reporting Framework Enters a New Phase
The Whistleblower Protection Act protects persons who make qualifying public interest disclosures from dismissal and other disadvantageous treatment and, for certain businesses, requires measures necessary to establish and operate an internal whistleblowing response system. Amendments effective from June 2022 already required enterprises with more than 300 regularly employed workers to designate personnel handling internal whistleblowing disclosures and to establish a system for receiving, investigating and rectifying such disclosures.
The 2025 amendments take that framework materially further. The principal reforms are: improving the effectiveness of internal reporting systems; expanding the scope of protected whistleblowers; addressing conduct that deters or obstructs whistleblowing; and strengthening remedies and deterrence against disadvantageous treatment because of whistleblowing.
The practical implications extend far beyond legal and compliance teams. Human resources, internal audit, procurement, vendor management, business units, corporate planning, boards of directors, outside directors and external professionals may all need their roles and decision-making processes revisited. Treating the reform as merely an exercise in updating an internal reporting policy risks leaving the most consequential issues — employment action, information control and investigation governance — insufficiently addressed.
2. What Is a Protected Whistleblowing Disclosure? — Not Every Workplace Complaint Falls Within the Act
A disclosure is protected under the Whistleblower Protection Act only where the statutory requirements concerning the person making the disclosure, the reportable fact, the purpose of the disclosure and the reporting channel are satisfied. Broadly speaking, the framework concerns reports by workers and other protected persons, made without an improper purpose, regarding specified violations of law that have occurred or are about to occur in connection with the organization to which they provide services, and made through internal channels, competent administrative authorities or certain external recipients.
Accordingly, an interpersonal workplace complaint, dissatisfaction with compensation, or an ordinary operational suggestion is not automatically a protected whistleblowing disclosure. At the same time, an effective internal reporting system will often accept a broader range of information at the intake stage because the legal character of a report may not be clear when it first arrives. A system that requires intake personnel to make a strict legal determination at the front door and rejects information viewed as technically outside the Act may cause the company to lose an important lead concerning serious misconduct.
Companies should therefore distinguish conceptually between the scope of matters accepted through the internal reporting system and the narrower category of disclosures protected by the Act, while ensuring that any disclosure that does fall within the statutory framework receives the required protection.
3. First Pillar of the Reform — Stronger Effectiveness and Administrative Oversight
Enterprises with more than 300 regularly employed workers must designate personnel to engage in the business of receiving internal whistleblowing disclosures, conducting investigations and implementing corrective measures. For enterprises with 300 or fewer regularly employed workers, designation and system-development measures remain obligations to make efforts.
Under the amended Act, where an enterprise with more than 300 regularly employed workers fails to satisfy the designation obligation and does not comply with a recommendation, the authorities may issue an order, and violation of that order may result in a fine of up to JPY 300,000. The reform also establishes on-site inspection powers to secure compliance with the designation obligation. Failure to report, false reporting, or refusal, obstruction or evasion of an inspection may also result in a fine of up to JPY 300,000. Corporate entities may be subject to the applicable dual-liability provisions.
The reform therefore makes even clearer that internal whistleblowing governance is not merely a matter of best practice. It is a compliance area subject to administrative supervision. A company should be able to demonstrate not only that a hotline exists, but also that designated personnel have actually been appointed, that records of designation and training are retained, and that the organization can in practice investigate and remediate misconduct.
4. Designated Whistleblowing Personnel — Do Not Leave the Responsible Persons Undefined
Personnel designated to handle internal whistleblowing disclosures are those who participate in receiving, investigating or rectifying internal disclosures and who are informed of information capable of identifying the whistleblower. Membership in a legal or compliance department alone does not automatically make every member designated personnel. The company should identify, by reference to actual responsibilities, who is formally designated for purposes of the Act.
Designated personnel, including former designated personnel, are subject to a statutory duty not to disclose, without justifiable grounds, information learned in connection with whistleblowing-response duties that can identify the whistleblower. Breach of this confidentiality obligation may result in a fine of up to JPY 300,000. The duty does not simply disappear when the individual changes roles or leaves the company.
In practice, it is not enough to prepare a designation letter. Companies should define who may access whistleblower-identifying information in each matter, what information may be shared with investigators or senior management, what can be shared where the whistleblower gives express consent, and which persons have technical access rights to electronic files containing whistleblower information.
5. Second Pillar of the Reform — Freelancers Enter the Scope of Protected Whistleblowers
The amended Act extends protection to certain freelancers who have an outsourcing or service relationship with a business and to certain former freelancers within one year after the relevant relationship has ended. The reform reflects the reality that persons who become aware of organizational wrongdoing are not always employees under a conventional employment contract.
After the amendment takes effect, businesses will be prohibited from terminating outsourcing arrangements, reducing transaction volumes, suspending business, reducing remuneration or otherwise imposing disadvantageous treatment on a protected freelancer because of whistleblowing. This means procurement, vendor-management and business teams — not only legal and compliance departments — must understand the requirements of the Whistleblower Protection Act.
Before the effective date, companies should examine whether access to the reporting system is limited to 'employees and officers,' whether external contractors and freelancers can actually obtain reporting-channel information, how reports from former freelancers within the relevant period will be accepted, and whether procurement or business teams making decisions on vendor termination or volume reductions unnecessarily receive information about prior whistleblowing activity.
6. Communication Obligations — Establishing a Hotline Is Not Enough
The amended Act expressly emphasizes the need not only to establish the necessary internal reporting system but also to communicate that system to workers and other relevant persons. The statutory Guidelines require education and awareness regarding reporting channels and methods, conflict-of-interest controls, prevention of disadvantageous treatment, prevention of interference with reporting and whistleblower identification, and related safeguards.
The amended Guidelines also address communication and awareness for officers, former workers, freelancers and former freelancers in addition to workers expressly referenced in the statute. Merely posting an internal policy on an intranet may therefore be insufficient as a practical means of communication for persons outside the organization or those who have already left it.
Companies should consider a combination of onboarding, periodic training, intranet materials, employee handbooks, notices at the time of entering outsourcing agreements, vendor portals and exit materials, so that eligible persons can continuously understand who may report, where they may report and how the system operates. Communication is not a formality; it is part of ensuring genuine access to the system.
7. Third Pillar of the Reform — Interference with Whistleblowing Is Expressly Prohibited
The amended Act prohibits a business, without justifiable grounds, from interfering with whistleblowing by a person entitled to make a protected disclosure. This includes seeking an agreement that the person will not whistleblow, announcing that disadvantageous treatment will follow if the person reports, or engaging in other conduct that suppresses a protected disclosure. Agreements and other legal acts made in violation of this prohibition are invalid.
Particular attention should be paid to separation agreements, confidentiality undertakings, settlement agreements, investigation-cooperation agreements and other documents signed during employment or at departure. Ordinary confidentiality obligations do not automatically become invalid. However, provisions that purport to prohibit lawful whistleblowing altogether, treat a protected disclosure to a competent authority as a breach of confidentiality, or threaten sanctions merely because a protected disclosure is made may conflict with the amended Act.
Before December 1, companies should review not only employee undertakings, but also outsourcing agreements, officer agreements, separation documentation, settlement templates and NDA forms to identify language or practices that could unlawfully inhibit protected reporting.
8. Prohibition on Searching for a Whistleblower — Distinguish Fact-Finding from a “Hunt for the Reporter”
The amended Act expressly prohibits a business, without justifiable grounds, from requiring disclosure of a person’s identity as a whistleblower or otherwise engaging in conduct whose purpose is to identify the whistleblower.
The critical distinction is between prohibited identification efforts and legitimate investigation of the underlying misconduct. A company is expected to investigate whether the reported violation occurred, collect relevant documents, interview witnesses and take corrective action where necessary. The amendment does not prohibit a proper factual investigation.
By contrast, demanding that an investigation target reveal 'who reported this,' pressuring surrounding employees to disclose the reporter’s name, or analyzing access logs solely for the purpose of identifying the whistleblower may create serious issues absent a justifiable reason. Investigation plans should therefore define the objective as verification of the reported facts and separately assess whether identifying the whistleblower is truly necessary for a legitimate purpose.
9. Fourth Pillar of the Reform — A Rebuttable Presumption for Dismissal or Discipline Within One Year
The amended Act introduces a rule under which, as a general principle, where a worker is dismissed or subjected to disciplinary action within one year after making a protected disclosure, the dismissal or discipline is presumed to have been imposed because of the whistleblowing.
The purpose is to reduce the evidentiary difficulty faced by a whistleblower who alleges retaliation. It does not mean that every whistleblower becomes immune from dismissal or discipline for one year. A company may still address poor performance, serious misconduct, organizational restructuring or other legitimate reasons unrelated to the disclosure, provided that it can rebut the presumption by demonstrating an independent and lawful basis for the action.
Accordingly, employment action against a whistleblower after the amendment requires heightened procedural discipline. Performance records, prior counseling, comparable disciplinary precedents, the timing of the reasons for action, the identity of decision-makers and records of legal review should be preserved so that the company can later explain objectively that the action was unrelated to protected whistleblowing.
10. Criminal Penalties for Retaliatory Dismissal or Discipline — A Material Issue for Management and HR
The amended Act establishes direct criminal penalties for a person who dismisses or disciplines a worker because of protected whistleblowing: imprisonment for up to six months or a fine of up to JPY 300,000. Where the violation is committed in connection with the business of a corporate entity, the entity itself may face a fine of up to JPY 30 million under the applicable dual-liability provision.
This is one of the most significant aspects of the reform from a corporate-governance perspective. Disadvantageous treatment because of whistleblowing was already prohibited, but dismissal and disciplinary action may now give rise directly to criminal liability. Where decision-makers know that an employee has made a protected disclosure, the integrity and documentation of the employment decision-making process become especially important.
At the same time, the new direct criminal penalty specifically targets dismissal or disciplinary action because of whistleblowing. Transfers, demotions, reduced evaluations, harassment and other forms of disadvantageous treatment may also violate the Act, but the newly created direct criminal penalty does not necessarily apply to every form of disadvantageous treatment in the same way. Companies should understand this distinction accurately while maintaining broader controls against all forms of retaliation.
11. Reconciling Whistleblower Protection with Legitimate Employment Authority
The purpose of the amended Act is not to grant a whistleblower permanent immunity from ordinary employment management. A whistleblower who independently commits serious misconduct or is otherwise subject to a legitimate and lawful employment decision may still be dealt with under applicable law and internal rules.
The practical question is whether the company can explain objectively that the action was not taken because of the protected disclosure. A sudden deterioration in performance ratings after a report, treating previously tolerated conduct as serious only after whistleblowing, imposing more severe consequences than on comparable employees, or allowing a manager who knows the whistleblower’s identity to dominate the formation of disciplinary reasons may materially weaken the company’s position in a dispute.
Companies should therefore avoid unnecessary mixing of whistleblowing information with ordinary HR records. Before adverse employment action is taken against a known whistleblower, an independent review by legal or compliance should be considered, and the reasons and supporting evidence should be documented before the decision is finalized.
12. Allegations Involving Senior Management — Build an Independent Reporting and Investigation Route
An internal reporting system is tested most severely when the subject of a report is a senior executive, the head of legal or compliance, or another person who controls the ordinary reporting channel.
If information flows through the ordinary management line in such a matter, risks of conflict of interest, destruction of evidence, whistleblower identification and retaliatory action may increase. The statutory Guidelines and official commentary place particular importance on independence from senior management and exclusion of conflicted persons.
Companies should consider predefined alternative routes involving statutory auditors, audit and supervisory committee members, independent outside directors, external counsel or another independent mechanism. The company should decide in advance who selects investigators, to whom they report, and at what stage a matter must be escalated to the board or an appropriate board committee.
13. External Counsel as an Internal Reporting Channel — Independence Requires Design, Not Just a Law Firm Name
Using external counsel as an internal reporting channel can strengthen psychological safety, confidentiality, professional handling and the ability to respond to allegations involving management. However, simply appointing an outside lawyer does not automatically create independence.
Where the company’s regular outside counsel also acts as the nominally independent reporting channel or investigator, questions may arise from the whistleblower’s perspective concerning neutrality, conflicts of interest, the identity of the lawyer’s client and the scope of information shared with management.
In practice, companies should clarify whether external counsel is acting only as an intake channel, performing initial triage, conducting the investigation, or advising the company as its legal representative. For serious matters or allegations involving senior management, it may be appropriate to switch to separate external counsel or another independent investigation structure under predefined escalation rules.
14. The First 24 Hours After a Report — Initial Response Can Determine the Integrity of the Entire Matter
The period immediately after an internal report is received can determine whether the subsequent investigation remains credible and whether the whistleblower is effectively protected. The first step should not be to forward the report broadly to all potentially relevant functions. The organization should document intake, acknowledge receipt where appropriate, assess urgency, consider threats to life or safety and serious legal violations, evaluate the risk of evidence loss, identify conflicts of interest, determine the investigation owner and limit information sharing.
Where email, chat data, accounting records, access logs, surveillance footage, contracts or other evidence may be lost, an appropriate legal hold or preservation measure should be considered. At the same time, the organization should assess whether the whistleblower is facing retaliatory reassignment, isolation, disadvantageous treatment or other harm and implement protective measures where necessary.
Detailed report contents or whistleblower-identifying information should not be disclosed casually to the investigation target at the outset. Procedural fairness and an opportunity for the target to respond are important, but the sequence of disclosure should take account of evidence preservation and whistleblower protection.
15. Designing the Internal Investigation — Protect the Whistleblower While Preserving Procedural Fairness
A company receiving a report must be able to verify misconduct and implement corrective action promptly. At the same time, it is not appropriate to treat the allegation as established fact merely because a report was made. The investigation should protect the whistleblower while reaching conclusions on the basis of objective evidence and fair consideration of relevant explanations.
An investigation plan should define the issues to be examined, relevant period, documents to be collected, interviewees, investigation team, conflict-of-interest controls, reporting line, evidence-preservation method and criteria for evaluating findings. Where the allegation involves senior management or the investigators themselves, an external investigation or independent committee may be appropriate.
Anonymous reports should not be disregarded merely because the reporter’s identity is unknown where the allegations are sufficiently specific or supported by documents. Conversely, even where a malicious false report is suspected, the company should avoid prejudging the matter and should reach its conclusion after appropriate factual verification.
16. Managing Whistleblower Information — Apply the Need-to-Know Principle Rigorously
Trust in an internal reporting system depends on appropriate control of information capable of identifying the whistleblower. Protecting the person’s name alone is not sufficient. Department, location, project name, particular factual episodes, document authorship or even writing style may allow others to infer the whistleblower’s identity.
Information should therefore be shared strictly on a need-to-know basis and only to the extent required for investigation or remediation. It may be appropriate to maintain different versions of an investigation report, for example a full investigation record, a management summary and a more limited communication to the investigation target.
Whistleblower materials should not be managed solely through forwarded emails or ordinary shared folders. Access rights, download permissions, retention periods, logs and printing controls should be considered. Whistleblower protection is shaped not only by policy language but also by system architecture and information-security design.
17. Freelancers and Contractors — Procurement and Vendor Management Become Part of Whistleblower Compliance
Once freelancers enter the scope of statutory whistleblower protection, procurement, purchasing and business teams responsible for outsourced relationships become direct participants in whistleblower compliance alongside legal and HR.
If, after a protected disclosure, purchase volume decreases, an outsourcing arrangement is not renewed, or remuneration is reduced, the company may need to explain whether the change reflected an ordinary commercial judgment or disadvantageous treatment because of whistleblowing. Objective records concerning commercial reasons, evaluation criteria and prior performance therefore become important.
NDA and outsourcing templates should also be reviewed to ensure they do not obstruct lawful whistleblowing. Because protection may extend to certain former freelancers within one year after the relationship ends, companies should consider whether it is appropriate for access to reporting channels to disappear completely at the moment of termination.
18. What Internal Whistleblowing Policies Should Be Revised Before Enforcement
Companies should first review the category of persons eligible to use the internal reporting system. The policy should address workers, dispatched workers, former workers and officers, and it should specify how freelancers and other contractors will be treated under the amended framework.
The next review should cover reporting channels, intake methods, anonymous reports, designation of responsible personnel, confidentiality, prevention of out-of-scope sharing, conflict-of-interest controls, independent routes for senior-management cases, prohibitions on interference and identification efforts, protection against disadvantageous treatment, investigation and remediation, communications to the whistleblower, record retention, follow-up, system evaluation, training and awareness.
The internal reporting policy should not be treated as a self-contained document. Employment rules, disciplinary policies, performance-management procedures, information-security rules, NDAs, separation undertakings, outsourcing agreements, crisis-management policies and internal-audit rules should be reviewed for consistency. Because the 2026 amendments materially affect both employment decisions and outsourcing relationships, inconsistencies across policies and contracts should not be left unresolved.
19. Board and Senior-Management Responsibilities — Internal Reporting Is Part of Crisis-Management Infrastructure
An internal reporting system should not be regarded solely as a legal-department process. Serious corporate issues involving regulatory breaches, criminal conduct, financial misconduct, product quality, personal-data leakage, harassment or other major risks may first surface through internal reporting.
Senior management should therefore monitor more than the raw number of reports. It should understand escalation criteria for serious matters, independent routes for allegations involving executives, time from report to investigation commencement, completion of corrective measures, recurrence prevention, follow-up with whistleblowers, signs of retaliation, awareness of the system and whether eligible users actually trust it.
A low number of reports should not automatically be treated as evidence that the organization has few problems. It may equally indicate that the reporting system is not known, is not trusted, or is perceived as unsafe. Management should assess usage data together with organizational culture.
20. Preparing for December 1, 2026 — What Companies Should Do Now
Given the remaining period before enforcement, companies should begin with a structured gap analysis. Current policies, reporting channels, designated personnel, communication methods, employment-action procedures, outsourcing contracts, investigation manuals, evidence-preservation procedures and management-reporting lines should be compared against the amended Act, the amended Guidelines and official commentary.
The organization should then revise policies and contracts and train designated personnel and managers. HR, procurement and purchasing functions, senior executives and audit teams should receive concrete instruction regarding the prohibition on identifying whistleblowers, protection against retaliation, the new presumption concerning dismissal and discipline, and the criminal penalties attached to retaliatory dismissal or discipline.
Finally, tabletop exercises are highly valuable before the effective date. A company might simulate an anonymous allegation against a senior executive, a whistleblower who becomes subject to discipline immediately after reporting, or a freelancer reporting product-quality falsification. The exercise should test who receives the report, who is notified, how evidence is preserved and who has authority to appoint the investigation team. A reporting system has value only if it can be operated under pressure.
21. Common Misunderstandings — Understanding the Reform Precisely
The 2026 reform is susceptible to oversimplification. Statements such as “a whistleblower cannot be dismissed for one year,” “all confidentiality agreements become invalid,” “a whistleblower may never be identified,” or “every report requires an external law-firm investigation” are inaccurate.
The amended Act generally presumes that dismissal or disciplinary action within one year after a protected disclosure was based on the disclosure; it does not prohibit every employment action during that period where an independent lawful basis can be established. Ordinary confidentiality obligations do not automatically become invalid; rather, agreements and legal acts that unlawfully interfere with protected whistleblowing are invalid.
Likewise, investigation of the reported misconduct remains permissible and necessary. What is prohibited is conduct, without justifiable grounds, undertaken for the purpose of identifying the whistleblower. Companies should avoid both underreaction and overreaction and should design systems that protect whistleblowers while preserving fair investigation.
22. SAKURA Law Office Perspective — The Core of an Effective Internal Reporting System
The central question is not whether an internal reporting policy exists. It is whether significant information can reach the organization safely, be investigated fairly, and lead to meaningful corrective action. A hotline, a policy document and a compliance poster do not by themselves accomplish that objective.
An effective system must be safe enough for a whistleblower to use, fair enough to protect the rights of an investigation target, independent enough to handle allegations involving senior management, disciplined enough to prevent retaliation from entering employment or commercial decisions, and operational enough to convert investigation findings into corrective and preventive measures.
The 2026 amendments require companies to focus once again on the effectiveness, rather than merely the form, of whistleblowing governance. SAKURA Law Office advises companies on internal reporting systems by integrating corporate law, employment, crisis management, internal investigations, M&A, data protection and technology considerations, and by tailoring governance to each organization’s structure and risk profile.
23. Frequently Asked Questions
Q1. From December 1, 2026, must every company in Japan establish a formal internal whistleblowing system?
For enterprises with more than 300 regularly employed workers, designation of whistleblowing personnel and establishment of the necessary internal whistleblowing response system are statutory obligations. For enterprises with 300 or fewer regularly employed workers, these remain obligations to make efforts. Smaller size, however, does not mean that protections against retaliation, interference with whistleblowing or unjustified efforts to identify whistleblowers can be disregarded. Appropriate measures should be considered in light of the organization’s actual circumstances.
Q2. Does a worker who makes a protected disclosure become immune from dismissal or discipline for one year?
No. The amended Act generally creates a rebuttable presumption that dismissal or disciplinary action within one year was taken because of the protected disclosure. The key question is whether the company can demonstrate, with objective evidence, an independent and legitimate basis unrelated to whistleblowing.
Q3. Do the new criminal penalties also apply to transfers, reduced evaluations or other disadvantageous treatment?
The newly introduced direct criminal penalty applies to dismissal or disciplinary action because of protected whistleblowing. Transfers, demotions, reduced evaluations and other disadvantageous treatment may nevertheless violate the Act. The absence of the same direct criminal penalty does not make retaliatory action permissible.
Q4. Should former workers and freelancers be able to use the internal reporting channel?
Companies should review their system in light of the amended Act and Guidelines so that persons within the protected scope can realistically access reporting channels. Freelancers are newly included in statutory protection, making it particularly important to revisit communication through outsourcing documentation, vendor portals and related channels.
Q5. Is it always prohibited to determine who the whistleblower is?
No. The Act prohibits unjustified conduct intended to identify the whistleblower. There may be circumstances in which identity becomes relevant to protect the whistleblower or to conduct a necessary investigation, but this requires case-specific justification. A simple “hunt for the reporter” should be avoided.
Q6. Can an NDA or separation agreement prohibit a protected disclosure to a government authority?
Ordinary confidentiality obligations do not automatically become invalid. However, the amended Act prohibits conduct that, without justifiable grounds, interferes with protected whistleblowing, including seeking an agreement not to whistleblow. Agreements and other legal acts made in violation of that prohibition are invalid. Contract language should therefore be reviewed carefully.
Q7. Is appointing an external law firm as the whistleblowing hotline enough to comply with the amended Act?
No. An external channel may be highly useful, but the entire system must function, including designation of responsible personnel, communication, investigation, remediation, conflict-of-interest controls, whistleblower protection, employment-action governance, record retention and training.
Q8. Can allegations against senior management be investigated through the ordinary compliance team?
That depends on whether independence and conflict-of-interest concerns can be adequately controlled. Where senior management may influence the reporting line or investigation, an independent route involving audit bodies, outside directors, external counsel or another independent structure should be considered.
24. About Kenshiro Michishita’s Legal Update Series
SAKURA Law Office publishes the Legal Update series through the profile of Managing Partner Kenshiro Michishita, addressing important legal issues affecting companies and executives, including corporate law, M&A, cross-border transactions, AI and technology, data protection, intellectual property, crisis management, employment, whistleblowing, Web3 and digital assets.
The purpose of the series is not merely to summarize statutes. Each Legal Update examines how legal developments affect operational workflows, contracts, employment processes, internal policies, boards of directors, internal audit, crisis management and executive decision-making.
This tenth installment addresses the amended Whistleblower Protection Act effective December 1, 2026. Future updates will continue to address foreign investment and M&A in Japan, cross-border transactions, corporate investigations and misconduct, defamation and reputation, Web3 and other areas relevant to businesses operating in or with Japan.
25. How SAKURA Law Office Can Assist with the Amended Whistleblower Protection Act and Internal Reporting Systems
SAKURA Law Office advises companies preparing for the December 1, 2026 effective date on the establishment and revision of internal reporting systems, internal whistleblowing policies and manuals, designation and training of whistleblowing personnel, design of internal and external reporting channels, independent routes for matters involving senior management, treatment of freelancers and outsourced personnel, review of NDAs and separation undertakings, legal review before adverse employment action, initial response to reports, internal investigations, evidence preservation, whistleblower protection and regulatory response.
Companies that already operate internal reporting systems should conduct a targeted gap analysis against the amended Act, revised Guidelines and CAA Q&A materials. Particular attention should be paid to interference with reporting, prevention of whistleblower identification, employment-action procedures, treatment of freelancers, independence in senior-management matters and effective communication of the reporting system.
Where a whistleblowing matter has already arisen, SAKURA Law Office can provide integrated support from initial legal assessment through selection of the investigation structure, witness interviews, digital and documentary evidence preservation, preparation of investigation reports, board reporting, engagement with regulators, corrective measures and recurrence prevention.
26. Contact
For advice on the amended Whistleblower Protection Act, internal reporting systems, internal whistleblowing policies, external reporting channels, designated personnel, internal investigations, whistleblower protection, employment actions, freelancer arrangements and related corporate-compliance and crisis-management matters, please contact SAKURA Law Office.
When contacting us, please indicate that your inquiry concerns the “amended Whistleblower Protection Act / internal reporting system” so that it can be directed promptly to the appropriate lawyer.
SAKURA Law Office
Kenshiro Michishita, Managing Partner
Ark Hills South Tower 4F, 1-4-5 Roppongi, Minato-ku, Tokyo 106-0032, Japan
Tel: +81-3-6910-0692
Written and supervised by
SAKURA Law Office
Kenshiro Michishita, Managing Partner
Principal References
Consumer Affairs Agency, “Summary of the 2025 Amendment to the Whistleblower Protection Act”
Consumer Affairs Agency, “Whistleblower Protection System Q&A”
Consumer Affairs Agency, “Internal Whistleblowing System Introduction Support Kit”
This article provides general legal information based on laws, the Consumer Affairs Agency’s statutory Guidelines, official commentary, Q&A materials and other publicly available sources as of September 24, 2026. It does not constitute legal advice or a legal conclusion regarding any specific matter. Specific cases require individualized analysis taking into account the whistleblower’s status, the content and recipient of the disclosure, timing, enterprise size, any contemplated employment or commercial action, internal rules and other relevant facts.