Virtual employment contracts are valid under colombian law

Author: María del Pilar Duplat Molano and Gabriela Mancero

Introduction

The Labor Ministry has recently indicated that virtual employment contracts are valid under Colombian law, if the written employment contracts comply with the requirements of the Substantive Labor Code for and if there is an agreement on the technical conditions to ensure the electronic exchange of information and data between the employer and the employee.

The latter helps the encouragement for the use of new technologies and forms of communication, and to take advantage of the tools to allow the promotion and the creation of formal employment opportunities in Colombia, especially considering that certain contracts or clauses in labor law must comply with formalities (mainly to be in writing) to be valid.

Electronic Signature

Law 527 of 1999 adopted the principles and notions of the Model Law on Electronic Commerce of the UNCITRAL and allowed people or entities to execute contracts through electronic means and use the electronic signature as a valid mechanism to manifest the will of the parties. As a result, the electronic signature is valid if the used method allows identifying the signatory to indicate its approval and that the method used for the electronic signature is adequate and reliable[1].

The electronic commerce regulation seeks to ensure that: (i) a virtual document comes from a specific person, (ii) no modification has occurred from its origin and transmission, and (iii) the receiving party could not modify the received document. The latter to avoid exposure to risks for the parties and provide them with certainty over the information managed through electronic or virtual means. Hence, virtual, digital or electronic documents and data messages have absolute legal validity in Colombian legislation unless proven otherwise.

Moreover, from the procedural standpoint, article 10 of Law 527 of 199, Article 2.2.2.47.5 of decree 1074 of 2015, and the General Procedure Code provide the same evidentiary value to electronic or virtual documents as a physical written document, as long as it is possible to verify the Authenticity Principles, which are:

• It is possible to determine who created the data message or who signed the document; and
• The adopted method to electronically sign and/or create the document is reliable and appropriate for the purposes for which the message was created or communicated. [2]

Finally, pursuant to article 244 of the General Procedure Code, there is a presumption of authenticity of virtual documents or electronically or digitally signed documents, which means that, it is presumed that the document and its content is from the person who has made, written and signed it. Thus, making them equivalent to written documents from an evidentiary standpoint.

Written Employment Contracts

There are certain types of contracts and clauses that must be in writing under Colombian labor law to have a legal effect. For instance, defined-term employment contracts, learning contracts and works/task contracts, if not written, they are presumed to be indefinite term employment contracts, with all the legal implications that come with such classification, such as, the payment of compensation for the termination of the contract, which is different when the contract is for a defined-term or indefinite.

Moreover, certain clauses in employment contracts are only valid if they are in writing, such as, trial period, all-inclusive salary, salary exclusion agreements, non-salary benefits, payment of salary outside the place where the services are rendered by the employee, authorization to use personal information of the employees, termination notice of defined term contracts.

For instance, if the employer does not agree in writing with its employee which benefits are not salary (pursuant to articles 127 and 128 of the Substantive Labor Code); all of the compensations it provides to the employee is salary and forms part of the base income for the purposes of payment of social benefits, parafiscal contributions and social security.

Considering the special protection for employees, the financial impact of wrongful actions in labor law and the seriousness of sanctions in case of a breach in labor law, there were concerns on whether virtual contracts had the same validity as written contracts in labor law and in labor litigations. Thus, employers preferred to continue to engage their employees through written documents, which could represent a more costly and inefficient mechanism in certain circumstances.

Hence, by expressly acknowledging the use of new technologies and forms of communication through the execution of virtual employment contracts, the Labor Ministry has acknowledged a more flexible possibility for companies and people to engage in employment contracts and specially, to agree upon terms that could only be in writing. This advancement reduces the costs in the engagement of employees and encourages the use of technologies to create formal employment opportunities in Colombia.

Requirements for virtual employment contracts

The Labor Ministry issued Circular Letter No. 0060 of 2018 whereby it indicated that, pursuant to the electronic commerce law (Law 527 of 1999), it is valid under Colombian law to use electronic signatures in employment contracts in the private sector, as long as the contract complies with the following conditions:

1. 1. Either party may decide to sign the contract by hand or electronically.
   2. The contract must comply with the requirements of written employment contacts pursuant to article 39 of the Substantive Labor Code, which are:
      1. There must be as many copies of the contract as interested parties.
      2. It must contain the following mandatory clauses: identification and domicile of the parties, place and date of signature, place where the employee is hired and the place where the services will be rendered, the type of labor, salary, salary type and periods of payment, estimated value, salary in kind (i.e. housing, education, etc.), duration of the contact and its termination.
   3. If the labor relationship develops in a digital manner, it is convenient that the agreement contains stipulations regarding the technical conditions under which the parties will communicate between each other, make transactions, create documents, or any other activity involving the exchange of data.
   4. The hiring process through a virtual employment contract cannot entail any additional expenses for the employee.

Accordingly, virtual employment contracts have the same legal value as written documents, as long as they comply with the requirements set forth in article 39 of the Substantive Labor Code and the regulation for electronic commerce, mainly, the authenticity principles mentioned above.

Conclusion

The use of electronic mechanisms to enable the hiring process of employees provides several advantages both for the employer and for the employee, such as:

1. The decrease of costs that both, the employee and the employer, must bear, such as transportation expenses.
2. The possibility for employees to comply with their duties without having to go to the offices of the employer, which provides as well a benefit for the quality of life of the employees, decrease of labor stress, and increases productivity.
3. Contribute to the sustainable development of the City by reducing the use of transportation to mobilize to the offices of the employer.

The implementation of new technologies and forms of communication allows the use of new tools to improve and make more efficient the development of employment relations; furthermore, these mechanisms also help to increase job creation by making more flexible the way through which employment contracts can be negotiated, executed and performed.