In today's digital age, HR professionals face critical decisions regarding the use of electronic versus traditional wet ink signatures for employee documents. This choice hinges on legal compliance, security, and the specific requirements of each document type. With legislation like Alberta's Electronic Transactions Act embracing electronic signatures for employment-related documents, it's essential to ensure these digital endorsements are legally sound and reliable. This shift reflects the growing need for adaptability in remote work and the importance of maintaining document integrity and authenticity.
When you need an employee to sign a document, will an electronic signature do or is a wet ink signature required? If an electronic signature is acceptable, is a scanned copy of the employee's signature adequate, or is something more secure called for? Googling these questions may not take you much further than an advertorial for document signing software.
When you consider these questions, start by asking why you need a signature. Signatures serve two main purposes: one is to identify the person who signed the document — in other words, to identify the source and authenticity of the document; the other is to establish that the person who signed the document approved of its contents. Will your preferred method of signing allow you to achieve both purposes? For example, will you be able to show that this employee agreed to these terms of employment, or signed off on this performance review, or completed this training? If the employment relationship has ended, will you be able to establish that this employee agreed to the terms of this release? The purpose of the document may impact your approach. For example, a release upon may warrant a witnessed signature.
You should also consider whether there is any legislation that limits or supports your preferred signing method. Situations that strictly require paper copies and a wet ink signature are increasingly rare (e.g., the Land Titles Office still requires a paper version of a document to be signed and retained when a digitally signed electronic version is submitted for filing). If legislation permits a document to be signed with an electronic signature or a digital signature, pay attention to how the legislation defines these types of signatures and any specific requirements that may affect their validity. In Alberta, employers should pay attention to the provincial Electronic Transactions Act (ETA) along with specific requirements that may be set out in other legislation. (Federally regulated employers should consider whether the electronic documents provisions in the federal Personal Information Protection and Electronic Documents Act apply.) Small differences in the wording of different statutes can lead to significant differences in the legal requirements that must be met.
Since 2003, the ETA has allowed Albertans to rely on electronic records, information, and signatures in the same way they would rely on their paper and ink counterparts across many contexts. However, the ETA does not apply to certain types of documents (e.g., wills and codicils, enduring powers of attorney, guarantees, negotiable instruments) and until recently, a regulation under the ETA specifically excluded any information or records arising from, related to, or connected with an employee-employer relationship from the ETA's application. The regulation included a built-in expiry date to ensure it was "reviewed for ongoing relevance and necessity." It is not obvious why the government remained wary of supporting the use of electronic records and signatures in the employment context for the first 17 years the ETA was in force. However, it is evident that when the regulation came up for review in March 2020, just as the COVID-19 pandemic fundamentally altered the landscape for remote work, the exclusion of employment-related information and records from the ETA was no longer deemed necessary.
Since April 1, 2020, the ETA has applied to information and records arising from, related to, or connected with an employee-employer relationship. This does not mean that electronic records and signatures relied on by employers before April 1, 2020 aren't valid, only that employers may not be able to use the ETA as a tool to establish their validity. This is one reason you might see a clause in a contract specifically agreeing that the contract may be relied on in facsimile or PDF format.
The ETA's definition of an "electronic signature" is broad enough to encompass just about anything one might imagine as an electronic signature, from a scanned scribble copied and pasted onto the signature line of a document to a much more secure digital signature that uses public-key cryptography to verify the identity of the person who signed the document and that the document has not been altered since it was signed. For an electronic signature to satisfy a legal requirement that a record be signed, the electronic signature must be "reliable for the purpose of identifying the person" and "the association of the electronic signature with the relevant record" must be "reliable for the purpose for which the record was created." If a signed document must be provided to a "public body," as defined in the ETA or designated under the Electronic Transactions Act Designation Regulation, an electronic signature may additionally need to meet specific information technology standards or other requirements established by the public body or, in some cases, by the Minister. The ETA sets out similar standards for relying on information or records in electronic form.
When it comes to using an electronic record or an electronic signature as evidence in court, you will also have to consider the requirements of the Alberta Evidence Act (or the Canada Evidence Act, if applicable), which puts the burden of proving the authenticity of an electronic record on the person seeking to rely on it. In some cases, this may require an employer to demonstrate the integrity of their electronic records system.
Complying with applicable legislation and thinking carefully about the purpose of obtaining a signature in the first place will typically make it easier for an employer to rely on an electronically signed document when things hit the fan. While a Saskatchewan court recently found that a farmer's texted thumbs-up emoji in response to a photo of a contract created a binding contract for the sale of flax, and courts have frequently grappled with whether an email signature is enough to create a binding contract, most employers would probably prefer to avoid litigating the nuances of an email signature or the meaning of an emoji. If your organization uses a digital signing software service or app, be sure to consider any privacy implications for records or information that may be transmitted or stored in the signing process. However, a simpler approach to signatures may be adequate. If your organization prefers a simpler approach, electronic or not, make sure it serves the purposes of your organization.
This article was originailly published in CPHR Alberta's Spring 2024 newsletter.
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.
