There are legal risks to be mindful of when utilising digital signatures, according to a leading employment lawyer
With the current push for companies to undergo digital transformation in all facets of business operations, HRD spoke to an employment lawyer on the legal risks involved in introducing an electronic signature programme on employment contracts and how this could affect HR teams.
According to Shaun Lee, supervising associate at JWS Asia Law Corporation, the Singapore Electronic Transactions Act “provides for electronic signatures to be legally and functionally equivalent to a handwritten signature”.
“’Signature’ is simply defined by the Act as “a method (electronic or otherwise) used to identify a person and to indicate the intention of that person in respect of the information contained in a record”,” he said.
However, some risks are involved in going purely digital with company contracts and records, he said.
“There are risks in terms of the authenticity of [the] signature, the identity of the party making that signature, the intention of the party making that signature as well as the authenticity of the electronic record that is received by the employer,” he said.
He added that the Act places a distinction between a simple electronic signature and a secure electronic signature.
“The requirements of a secure electronic signature is that it can be verified that the signature was, at the time it was made, (a) unique to the person using it; (b) capable of identifying such person; (c) created in a manner or using a means under the sole control of the person using it; and (d) linked to the electronic record to which it relates in a manner such that if the record was changed the electronic signature would be invalidated,” he added.
He said that HR can further look to the Act for guidance on what constitutes a “‘commercially reasonable security procedure’ which can be used to create secure electronic records or secured electronic signatures”.
“The Act provides that whether a security procedure is commercially reasonable is to be determined by having regard to the purposes of the procedure and the commercial circumstances at the time the procedure was used, including:
(a) the nature of the transaction;
(b) the sophistication of the parties;
(c) the volume of similar transactions engaged in by either or all parties;
(d) the availability of alternatives offered to but rejected by any party;
(e) the cost of alternative procedures; and
(f) the procedures in general use for similar types of transactions.
Alternatively, HR could also look towards digital signatures solutions backed by a Certification Authority, which has been accredited by the Infocomm Media Development Authority’s Controller of Certification Authorities. Such digital signatures are treated as secure electronic signatures under the Act,” he advised.