Recent amendments to the Electronic Transactions Act General Regulation remove restrictions on employers’ use of electronic signatures and storage of electronic documents.

In Alberta, the legal force of electronic documents and electronic signatures is largely governed by the Electronic Transactions Act (the Act), with the exception of those instances where a signing requirement or other limitation is imposed by federal statutes. In those limited cases, the use and enforceability of electronic documents would be governed by federal law.

The intent of the Act is to give electronic documents, including contracts executed by electronic means, the same legal status as paper documents – so long as the parties involved consent to the electronic document being treated as an original. The Act recognizes electronic documents as functional equivalents to their physical form for most purposes, subject to certain requirements in the Act and the limitations of other laws and legislation.

Under the Act, if the parties consent to using electronic documents, then a legal requirement that a person receive an original record will be satisfied if:

• there is reliable assurance respecting the integrity of the information contained in the original document; and
• the electronic document is capable of being retained and is accessible by the person to whom it is provided so it is usable for subsequent reference.

Additionally, where the Act applies, the legal requirement that a record be signed is satisfied by an electronic signature if, in light of all the circumstances:

• the electronic signature is reliable for the purpose of identifying the person; and
• the association of the electronic signature with the relevant record is reliable for the purpose for which the record was created.

The Act does not apply to certain specified documents including:

• Wills, codicils, or trusts created from wills or codicils;
• Enduring powers of attorney under the Powers of Attorney Act or personal directives under the Personal Directives Act;
• Records creating or transferring interests in land, including interests in mines and minerals;
• Guarantees under the Guarantees Acknowledgement Act;
• Negotiable instruments such as promissory notes; and
• Records that are prescribed, or that belong to a class that is prescribed, as records to which the Act does not apply.

Previously, pursuant to the Electronics Transactions Act General Regulation (the General Regulation), information or records arising from, related to, or connected with an employee-employer relationship, were prescribed records to which the Act did not apply.  This included:

• Employment information and records of employment maintained by an employer under the Employment Standards Code (the Code) or any other enactment;
• Information or records related to the terms and conditions of employment, including a contract of employment;
• Information or records related to or created in the course of carrying out the duties, functions and other job-related activities of an employee;
• Information or records related to the assignment of duties, functions and other job-related activities of employment by an employer; and
• Information or records related to the internal operations of an employer.

As the Act explicitly did not apply to information or records in the context of an employment relationship, employment agreements and other related contracts executed electronically could be denied legal effect or enforceability.  This necessitated originally executed copies of any employment record requiring a signature or which might need to be relied on in legal proceedings.  Further, employers had to maintain bulky and more burdensome paper copies of employees’ personnel files and other documents.

On February 4, 2020, amendments to the General Regulation removed these restrictions on the use of electronic signatures and the maintenance of electronic records for employment related records, documents and information.

These amendments bring the Act in line with similar statutes in other Canadian jurisdictions, including British Columbia and Ontario, which generally allow for the execution of documents, including employment contracts, by electronic signature and the maintenance of employment records in electronic form, provided that certain requirements related to reliability and accessibility are met. 

Key takeaways for employers

For employers, this amendment brings increased flexibility regarding the use and maintenance of electronic records. Going forward, employers and employees can execute valid employment agreements using electronic signatures and can store records required to be maintained under the Code in electronic format, including employee information records and employment contracts.

Further, these electronic records can be used and relied upon with the same legal effect as their paper counterparts.

Despite this increased flexibility, employers should include provisions in their employment contracts that specify that employees consent to the use of electronic contracts and other employment documentation. Employers are encouraged to seek legal guidance with respect to their options obligations under the Act.

By Cheryl Rea and Sheena Owens, Stikeman Elliott

The authors would like to acknowledge the support and assistance of  Chelsea Daku, articling student at law.