- In July 2021, the Ministry of Human Resources and Social Security of China issued additional guidance on concluding electronic contracts between employers and employees, fleshing out in detail the notice issued in March 2020, which conferred legal validity on such contracts subject to certain conditions.

The COVID-19 pandemic has greatly accelerated the pace of digitalisation and intensified the search for digital alternatives to replace paper-based administrative procedures. In light of social distancing measures and travel restrictions hindering mobility, companies are increasingly looking into the viability of concluding electronic contracts and signing with electronic signatures. But does an electronic signature carry the same legal weight as a wet ink signature in the context of employment, and what are the provisos governing the validity of an electronic contract? In July 2021, the Ministry of Human Resources and Social Security (MHRSS) of China issued additional guidance on concluding electronic contracts between employers and employees, fleshing out in detail the notice issued in March 2020, which conferred legal validity on such contracts subject to certain conditions.
Background regarding the validity of electronic employment contracts
Prior to the issuance of the notice by the MHRSS in March 2020, there had been some confusion as to whether an electronic signature was legally valid and appropriate for the conclusion of an employment contract in mainland China. On the one hand, the Labour Contract Law stipulates that an employment contract be inked by a wet signature, as both parties are supposed to hold their own copy of the contract. On the other hand, the Electronic Signature Law provides that electronic signatures are in most cases valid, bar in specific kinds of documents, and the application thereof in documents relating to employment matters is not explicitly excluded. Concise and compendious, the notice outlines the conditions under which an electronic employment contract is considered valid:- The employer and employee shall, by mutual agreement, conclude a written employment contract in electronic form;
- The contracting parties shall use electronic messages deemed equivalent to the written form, and electronic signatures deemed reliable in accordance with the Electronic Signature Law and other relevant regulations;
- The employer shall ensure that the generation, transmission and storage of the electronic employment contract comply with the Electronic Signature Law and other relevant regulations, and that the contract is complete, accurate and tamper-proof;
- The electronic employment contract shall comply with provisions of the Labour Contract Law.
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Ascertain the willingness and identity of both parties
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Choose a suitable e-contract system
- Allows for the conclusion, retrieval, storage and application of employment contracts via effective modern information technology;
- Capable of authenticating the identity of the parties, supporting the application of electronic signatures, verifying the willingness of the parties and safeguarding data;
- Ensures that the conclusion, generation, transmission and storage of information in respect of electronic employment contracts comply with relevant laws and regulations;
- Ensures compliance with the requirements of truthfulness, completeness, accuracy, tamper resistance and traceability.
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Use a “reliable” electronic signature
- The data in respect of the electronic signature creation is owned by the signatory at the time of signing;
- The data in respect of the electronic signature creation is under the sole control of the signatory at the time signing;
- Any alternations to the electronic signature are detectable;
- Any changes to the content and form of relevant data are detectable.
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Things to do before and after concluding the contract