In an age of remote work with pressures to conduct all business electronically and improve efficiency, the use of electronic signatures ("e-signatures") has become increasingly essential. Recent amendments to Alberta's Electronic Transactions Act General Regulation remove restrictions on employers' use of e-signatures. Now, in every Canadian province and territory, e-signatures on employment contracts is permissible, subject to applicable consent, reliability, and accessibility requirements.
The issue of whether an e-signature of an employment contract is permissible and the legal force of electronic documents is a matter of provincial or territorial law, with the exception of employees employed in any federal work, undertakings or business, in which case the federal Personal information Protection and Electronic Documents Act ("PIPEDA") or the federal subject matter specific legislation applies. The intention of provincial/territorial electronic commerce legislation is to afford certain electronic documents the same legal status as original, paper documents, subject to the parties' consent and provided that the requirements of the legislation are satisfied. While there is federal legislation concerning electronic signatures (PIPEDA), relevant to federal work, undertakings or business and specific rules under provincial/territorial legislation applicable to public bodies, this falls outside the purview of this article. The focus of this article is with respect to general considerations regarding the use of e-signatures on employment contracts that fall within provincial/territorial jurisdiction.
What is an e-signature?
Where provincial/territorial law requires a signature, the applicable electronic commerce legislation prescribes that an e-signature is treated as the electronic equivalent to a handwritten signature. The meaning of "electronic signature" is defined according to provincial/territorial electronic commerce legislation. While each jurisdiction has a unique legal definition, generally speaking an e-signature is electronic information that a person creates or adopts in order to sign a document and that is in, attached to, or associated with the document. Generally, the definition of e-signature does not require that the signature take a particular form. Rather, subject to specific provincial/territorial legislative requirements regarding form, an e-signature can be created in a number of different ways, including using typeface as a representation of the manual signature, an electronic image of the handwritten signature, or electronically drawing the signature, for example.1 Generally, the legislation requires that the e-signature is reliable, capable of identifying the signatory, and is accessible so as to be usable for subsequent reference. In Quebec, under the Civil Code, an e-signature must be distinctive and regularly used to signify the consent of the individual executing the document.
Restrictions on the use of e-signatures:
Although the use of e-signatures is becoming increasingly normal, there are certain documents and contracts that require a personal handwritten signature to be considered legally enforceable. Provincial/territorial legislation generally excludes the use of e-signatures on some or all of the following: (i) wills and codicils; (ii) trusts created by wills or codicils; (iii) powers of attorney to the extent that they are in respect of the financial affairs or personal care of an individual; (iv) documents that create or transfer interests in land and require registration to be effective against third parties, including agreements of purchase and sale; (v) negotiable instruments; (vi) documents of title, except anything done with a contract for the carriage of goods; and (vii) any other document designated by provincial/territorial regulation.2 With respect to documents designated by regulation, it should be noted that provincial/territorial electronic commerce legislation may prescribe certain classes of documents for which the electronic commerce legislation will not apply but the legal requirements pursuant to other provincial/territorial legislation will apply.
Requirement of consent:
Generally, provincial/territorial e-commerce legislation does not make the use of e-signatures mandatory and the consent of the individual is required. Although most provinces and territories permit an implied consent3, it is recommended to obtain explicit consent to use and rely upon an e-signature from all individuals executing an employment contract. The recommended form of obtaining consent is a written authorization, which typically takes the form of an "Execution in Counterpart and Delivery" clause in an employment contract. Such a clause provides that the offer, and any attachments, may be executed by the parties in separate counterparts, each of which is considered to be an original. In addition, such a clause generally stipulates that delivery, acceptance, and execution of the agreement or counterparts of it, may be done by fax, e-mail or other functionally equivalent electronic means of signature and transmission. The additional benefits of obtaining written consent to use e-signatures include: (i) evidence of the parties' intention to contract; (ii) evidence of the parties' intention to create a legally binding agreement; and (iii) evidence of the authenticity of the e-signature.
Takeaways for employers:
Alberta's recent legislative amendment to remove restrictions on the use of e-signatures in connection with employment related records, documents and information, brings the province in line with rest of Canada. In general, all Canadian jurisdictions allow for e-signatures of employment contracts, subject to applicable consent, reliability, and accessibility requirements. The legislative changes allow employers to adopt a consistent pan-Canadian approach to obtaining executed employment contracts using e-signatures. Employers, however, must ensure they have an employee's consent to use e-signatures and, to that end, should obtain specific legal advice with respect to including consent provisions in their employment contracts. Employers are encouraged to seek legal advice with respect to their obligations under the applicable provincial/territorial electronic commerce legislation.
Footnotes
1 Note that provincial/territorial legislation defines the legal meaning of an "electronic signature" and prescribes the form that an e-signature may take. Specific legislative requirements regarding the form of an e-signature, based on the jurisdiction governing the contract, must be consulted.
2 The examples of exclusions with respect to the use of e-signatures do not apply to all provinces/territories. Please consult the jurisdiction-specific legislation for applicable exclusions.
3 Generally, implied consent is consent that is inferred from a person's conduct if there are reasonable grounds to believe that the consent is genuine and is relevant to the information or document.
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