Canada: The Personal Information Protection And Electronic Documents Act And The Cross-Border Transfer Of Employee Data

Last Updated: December 2 2008

Article by Candice Teitlebaum*

In May 2008, I discussed the impact of transborder data flows and the existence of the USA PATRIOT Act1 in the context of personal health information. The disclosure of the personal information of Canadians outside of Canada elicits significant privacy concerns regardless of the type of personal information that is transferred. Accordingly, many of the recommendations regarding the cross-border transfer of personal health information remain applicable in the employment context.

It is increasingly common for large businesses to store records in off-site locations due to issues of space, and to avoid duplication of efforts and enhance data protection measures. In addition, it is common practice for organizations to engage in the cross-border transfer of personal information to their international subsidiaries, and in the context of a possible sale of the business. The transfer of employee data across borders for processing and storage often makes good business sense and in many cases cannot be avoided. However, the transfer of employee personal information, especially to third parties outside of Canada's borders, must be carefully organized and appropriate measures to protect such personal information must be established.

This article will focus on measures that organizations in Ontario can implement when proposing to transfer information to third parties outside of Canada, and is meant to serve as an introduction to some of the issues businesses should consider before engaging in the cross-border transfer of personal employee data.

A. APPLICATION OF PIPEDA

Unlike Alberta, British Columbia and Quebec, Ontario has not implemented its own private sector privacy legislation. Accordingly, in Ontario the Personal Information Protection and Electronic Documents Act, S.C. 2000, c.5 ("PIPEDA") governs the collection, use and disclosure of employee data by private sector organizations.

To determine the applicability of PIPEDA, counsel should consider: 1) whether the employee data at issue constitutes personal information and/or personal employee information;2 2) whether the disclosure of employee data occurs in the course of commercial activity;3 and 3) whether the organization is subject to federal or provincial authority.4 PIPEDA will be applicable where the collection, use and disclosure of personal information, including employee information, is transferred across provincial or national borders in the course of commercial activity. Although PIPEDA does not specifically define "Personal Employee Information," private sector privacy legislation legislation from Alberta5 and British Columbia6 suggests that "Personal Employee Information" is personal information required by an organization to establish, manage or terminate an employment relationship. It is likely that this information would include such things as an individual's name, health care insurance number, employee number and information about a person's medical or educational history.

B. FORM OF CONSENT

Privacy legislation is primarily consent-based. The most effective way to prevent a privacy complaint is to obtain the express consent of the individual whose personal information is subject to disclosure. Where this approach is not practical, organizations should ensure that they provide clear notification to their employees when planning to transfer and disclose employee data to third parties outside of Canada for processing and storage.

Organizations should also revise and re-distribute their employee privacy policies to account for changes to the storage of employee data, and to ensure notice and transparency in this regard. Employees should be notified in a manner which indicates the type of personal information that is at issue and should be informed of the purposes for which their employer wishes to disclose their personal information to a third party. This notification should include a method for the employee to contact his or her employer, including a telephone number or e-mail address of the designated contact person or privacy officer, to inquire about the disclosure of their personal information. It is also recommended that employees be informed about the possible risk to their personal information when it is transferred outside of Canada.7

C. PROCESSING CONTRACTS WITH THIRD PARTIES

Under PIPEDA, an organization is responsible for personal information in its possession, custody or control, including information that has been transferred to a third party for processing. Accordingly, it is the responsibility of the originating organization to use contractual or other means to provide a comparable level of protection while the information is being processed by a third party. The federal Office of the Privacy Commissioner has endorsed contract terms which include: 1) guarantees of confidentiality and security of personal information; 2) oversight, monitoring and auditing of the services being provided; and 3) details pertaining to the third-party service provider's security policy.8

*Candice Teitlebaum is an associate and belongs to the Corporate/Commercial Group and Technology Industry Team.

The author acknowledges the assistance of Ian Mathany, a student-at-law at Aird & Berlis LLP, for his contribution to this article.

Footnotes

1.Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act, Pub. L. No.107- 56, 115 Stat. 272 (2001).

2.Pursuant to ss.2 (1) of PIPEDA, "Personal Information" means information, recorded or otherwise, about an identifiable individual, with the exception of the name, title, business address or business telephone number of an employee of an organization.

3."Commercial Activity" under PIPEDA is defined as any particular transaction, act or conduct or any regular course of conduct that is of a commercial character. Case law indicates that, in its ordinary meaning, "commercial activities" refer to purposes related to trade and the buying and selling of commodities. Arguably, the transfer of employee data for the purpose of administering an employer/employee relationship does not appear to constitute commercial activity, as such is defined pursuant to PIPEDA.

4.If an organization carries on a "federal work, undertaking or business," only then will PIPEDA apply in respect of the personal information of its employees that it collects, uses or discloses (a.4(1)(b)).

5.Pursuant to ss.1 (j) of Alberta's Personal Information Protection Act, S.A. 2003, c.P-6.5, as amended S.A. 2005, c.29, "Personal Employee Information" means, in respect of an individual who is an employee or a potential employee, personal information reasonably required by an organization that is collected, used or disclosed solely for the purposes of establishing, managing or terminating an employment or volunteer relationship between the organization and the individual that is unrelated to that relationship.

6.Pursuant to ss.1 of British Columbia's Personal Information Protection Act, S.B.C. 2003, c.63, as am. "Personal Employee Information" means personal information about an individual that is collected, used or disclosed solely for the purposes reasonably required to establish, manage or terminate an employment relationship between the organization and the individual, but does not include personal information that is not about an individual's employment.

7.See Findings of the Office of the Privacy Commissioner of Canada in "Commissioner's Findings – PIPEDA Case Summary #313: Bank's Notification to Customers Triggers Patriot Act Concerns," online at http://www.privcom.gc.ca/cfdc/ 2005/313_20051019_e.asp. For example, the personal information of Canadians transferred to the United States is impacted by the U.S.A. Patriot Act.

8.Ibid. In this instance, the third-party's security policy included "administrative, technical and physical protections to safeguard against, inter alia, unauthorized usage, modification, copying, accessing or other unauthorized processing

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

 
In association with
Related Topics
 
Related Articles
 
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
 
Email Address
Company Name
Password
Confirm Password
Position
Mondaq Topics -- Select your Interests
 Accounting
 Anti-trust
 Commercial
 Compliance
 Consumer
 Criminal
 Employment
 Energy
 Environment
 Family
 Finance
 Government
 Healthcare
 Immigration
 Insolvency
 Insurance
 International
 IP
 Law Performance
 Law Practice
 Litigation
 Media & IT
 Privacy
 Real Estate
 Strategy
 Tax
 Technology
 Transport
 Wealth Mgt
Regions
Africa
Asia
Asia Pacific
Australasia
Canada
Caribbean
Europe
European Union
Latin America
Middle East
U.K.
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.

Disclaimer

The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.

General

Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions