China Frontline July 2021: Guidelines for signing a valid electronic employment contract

The COVID-19 pandemic has led to a large number of companies adopting a telecommuting model, which has created a more urgent need for employers to sign employment contracts electronically.

On 4 March 2020, the China Ministry of Human Resources and Social Security (“MHRSS”) issued the Notice on Issues Related to the Conclusion of Electronic Employment Contracts (“No.33 Notice”), stipulating that employers and employees in China may agree to sign employment contracts electronically. This is the first time that the Chinese government have affirmed the validity of written employment contracts signed in electronic form.

After the publishing of No.33 Notice, cities like Beijing, Shenzhen and Suzhou have all issued local regulations and adjudication standards on the use of electronic employment contracts.

On 1 July 2021, MHRSS issued the Guidelines for Conclusion of Electronic Employment Contracts (the "Guidelines"), which offers detailed guidance for employers on signing a valid electronic employment contract.

In this article, we will explain the four key considerations for signing and executing a valid electronic employment contract.

1. Before signing: choose an appropriate contract signing platform

Article 3 of the Guidelines indicates that the contract should be concluded through an electronic employment contract signing platform. Article 4 and Article 7 lists the following standards required for a qualifying electronic employment contract signing platform:

  • the platform must have the following functionality: identity authentication, e-signatures, signing willingness confirmation and data security protection; and
  • the platform must be able to record and store the verification and confirmation processes through the use of technical means such as digital certificates, network information verification, biometric identification and cell phone short message verification code. If permitted, an electronic social security card can be used to carry out the real-name authentication.

Based on Article 15, MHRSS encourages employers and employees to give priority to using the platform built by MHRSS and other government departments (the "Government Platform"). If the electronic employment contract is not signed through the Government Platform, employers and employees must submit the contract data in accordance with the data format and standards published by the local departments of Human Resources and Social Security.

2. When signing: use a reliable e-signature accompanied by a trusted timestamp

The employment contract will become effective once the employer and employee have signed or sealed the text of the contract. For electronic employment contracts, based on Article 9 of Guidelines, contracts will be effective with a "reliable e-signature" (defined below) and the contract should be affixed with a trusted timestamp.

According to Article 8, the e-signature should be completed by using the digital certificates and secret keys issued by the legally established electronic certification service providers and also in accordance with the PRC E-signature Law.

The Guidelines define a "reliable e-signature" as follows:

Reliable e-signature refers to e-signatures that comply with all of the following conditions:

  1. any data used to create the e-signature is owned exclusively by the electronic signatory;
  2. at the time of signing, the e-signature creation data is controlled only by the electronic signatory;
  3. any alteration to the e-signature after signing can be detected; and
  4. any alteration to the content and form of any electronic data can be detected after signing.

Also, according to the Guidelines, a “trusted timestamp” refers to the data generated by authoritative organisations using e-signature technology which can prove that the original signed document existed prior to the time of signing.

3. After signing: employer obligations

The Guidelines list four things that the employer should complete after signing the electronic employment contract:

  1. the employer must notify the employee that the electronic employment contract has been concluded by way of mobile phone text message, WeChat, e-mail or APP message prompt or other means (Article 10);
  2. the employer must remind the employee to promptly download and save the text of the electronic employment contract, inform the employee of the method to view and download the electronic employment contract, and provide necessary guidance and assistance to the employee (Article 11);
  3. the employer must ensure that the employee can view, download and print out the complete contents of the electronic employment contract at any time by using the common equipment and should not charge any fee from the employee (Article 12); and
  4. where the employee requires a hard copy of the electronic employment contract, the employer must provide at least one copy free of charge and should prove the consistency between the hard copy and the original of the data message through affixation of seal (Article 13).

4. From start to completion: retain evidence of the whole process

Article 16 of the Guidelines stipulates that the electronic employment contract signing platform must retain evidence of the whole process of management and conclusion of the electronic employment contract, including identity authentication, signing intention, and e-signature, and must ensure the integrity of the electronic evidence chain, make sure that the relevant information is queryable and accessible, and enable employers, workers and organisations authorised under applicable laws and regulations to access the electronic data.

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