The newly released Guidelines on Electronic Labour contracts adds obligations for employers in the process of concluding the labour contracts with employees and notes protection of employee interests.
On July 1, 2021, the Ministry of Human Resources and Social Security of China (MOHRSS) issued the Guidelines for the Conclusion of Electronic Labour Contracts [2021 No. 54] ("the Guidelines”) to provide employers with comprehensive guidance on concluding electronic labour contracts with their employees.
The "Guidelines" mark the official transition of labour contract signing procedures into a digital era by using electronic versions and online e-signatures rather than the usual paperwork. Companies should start looking into electronic labour contracts as early as possible, especially for industries like wholesale, retail, catering, and labour-intensive factories where there is frequent turnover of staff and a complex allocation of employees. By using electronic contracts companies will help their HR departments to enhance work efficiency, save administrative costs, and mitigate risks deriving from paper-based originals and information.
When concluding an electronic labour contract with employees, employers need to be aware of several aspects.
Employers and employees must conclude an electronic labour contract through the electronic labour contract management platforms that comply with relevant laws and regulations.
Secondly, the electronic labour contract management platform should provide a full batch of services/solutions such as labour contract conclusion, retrieval, storage, application, and other services through effective means of modern information technology. The platform should also come with functions including identity authentication, electronic signature, informed consent confirmation, and data security protection to ensure that the overall flow and data of electronic labour contracts comply with laws and regulations. The platform also needs to ensure the authenticity, completeness, accuracy, tamper-proof, and traceability of the electronic labour contracts.
The "Guidelines" specify that employers and employees must use digital certificates and keys issued by legally established electronic certification service organisations that meet the requirements of the Electronic Signature Law of the PRC to perform electronic signatures. The electronic labour contract takes effect after the employer and the employee have signed a reliable electronic signature with a trusted timestamp.
When communicating with employees, employers should pay attention to the following points:
- According to the Letter on Information of Electronic Labour Contracts Related Issues [2020 No.33] (the “Letter”) released by the MOHRSS, the employer and the employee may conclude an electronic labour contract if they have reached a consensus through consultation. This means that employers must obtain consent from employees before concluding a digital form of labour contract. If the employee refuses, the employer shall not terminate the labour relationship for this reason they shall respect the employee’s decision and adopt the paper version according to the employee’s willingness.
- Before concluding an electronic labour contract, the employer must clearly inform the employee of the procedure, operating methods, precautions, and ways to view and download the complete text of the labour contract and should not charge the employee any fee.
- After the conclusion of the electronic labour contract, employers should notify employees by mobile phone text messages, WeChat, email, or APP information that the contract is concluded and prompt employees to download and save the text of the electronic labour contract. Employers shall also inform employees of the methods to view and download the electronic labour contract and provide them with necessary guidance and assistance.
- Employers should ensure that employees can view, download, and print out the complete content of the electronic labour contract by commonly used devices at any time and should not charge the employee any fees.
If employees need a hard copy of the electronic labour contract, employers should provide at least one copy for free, and verify that it is consistent with the original digital copy by stamps or other methods.
Employers should ensure that employees have the right to know, express their true intentions and obtain the legal rights of holding the text of the labour contract (electronic or paper) in the process of signing the labour contract.
According to Article 14 of the Electronic Signature Law, a reliable electronic signature has the same legal effect as a handwritten signature or seal. The employer must strictly follow the relevant provisions of the Electronic Signature Law to ensure the validity of the electronic labour contract through a qualified and secure contract signing platform and a standardised authentication process.
Employers shall also ensure that there is a secure digital environment for signing electronic contracts and using electronic signatures and meanwhile protect the data and information in case the key electronic signatures or seals are stolen or leaked. The employer should also save records of the entire signing process in a timely manner to mitigate legal risks.
In conclusion, the implementation of electronic labour contracts has put forward higher requirements for companies and HR staff. Both domestic and foreign enterprises need to pay high attention to the new compliance standards and regulations on electronic labour contacts as they carry several challenges for businesses to transition into the era of digitalisation and the redundancy of paper records.
If you are looking for guidance and assistance with electronic labour contracts, talk to Hawksford. Our certified and experienced HR service team is happy to guide you through the steps of concluding the electronic labour contract for your employees.