Legal Risks and Opportunities of Signing Documents via DocuSign under Labor Law

Electronic signature solutions are becoming increasingly popular in business environments, especially with the rapid digitalization and need for more efficient workflows. Software like DocuSign enables quick and remote signing of documents, but it raises the question of whether such signatures are legally valid under labor law. Is a document signed via DocuSign legally binding in accordance with the Labor Law of the Republic of Serbia? This article will explore the legal aspects and potential risks associated with electronic signatures in employment relations.

Electronic Signatures and Labor Law: Is an E-Signature Equivalent to a Handwritten Signature?

The Labor Law of the Republic of Serbia, as the primary legislation governing employment relations, explicitly requires certain employment documents to be delivered in written form. Specifically, documents such as the decision on the use of annual leave and the payroll slip can be delivered in electronic form. However, this is the exception rather than the rule.

On the other hand, the Law on Electronic Document, Electronic Identification, and Trust Services in Electronic Business introduces the electronic document as a legally valid document equivalent to a paper document. An electronic signature, when signed with a qualified electronic signature, carries the same legal weight as a handwritten signature. This law marks a significant step towards digital business, but the question remains: how aligned is it with the Labor Law, and how is it applied in practice?

Legal Challenges of Signing Employment Contracts Electronically

The Labor Law was enacted before the Law on Electronic Document, meaning it is not fully aligned with modern digital technologies. While an electronic signature can be legally valid for many types of documents, an employment contract is a unique case.

According to the Labor Law, an employment contract is considered concluded when signed by both the employee and the employer, in at least three copies. One copy must be delivered to the employee, while the other two remain with the employer. This requirement for written form leaves little room for interpretation and clearly emphasizes the importance of a physical document in employment relations.

If an employer chooses to sign an employment contract electronically using DocuSign or a similar software, there could be legal issues regarding the validity of such a contract. Although electronically signed documents are legally equivalent to paper ones, they can be challenged in court due to non-compliance with the Labor Law. Additionally, there is a risk that such a contract could be declared void, which could lead to severe legal consequences for the employer, including the obligation to pay damages to the employee.

Legal Implications of Signing a Notice of Termination Electronically

A notice of termination is a crucial document in employment relations, and its proper delivery is of utmost importance. The Labor Law stipulates that a notice of termination must be issued in written form, containing a reasoned explanation and instructions on legal remedies. The delivery of this notice must be carried out in person at the employer’s premises or by registered mail.

Signing such a document electronically can lead to legal complications, given that the Labor Law does not recognize electronic form for this type of document. If an employer attempts to use DocuSign for delivering a termination notice, there is a significant risk that the document will not be recognized as legally valid. If the formal procedure is not followed, the legality of the termination could be questioned, potentially resulting in the employer being required to pay damages to the employee.

Exceptions: When is Electronic Signing Allowed?

Although the Labor Law strictly requires documents to be in written form, there are specific exceptions where electronic signing is allowed. For example, the decision on the use of annual leave and payroll slips can be delivered to the employee in electronic form. In these cases, the employer must ensure proof that the employee received and read the document, which may include a receipt confirmation of the electronic mail.

However, even in these instances, the Labor Law insists that, upon the employee’s request, the employer must provide these documents in written form. This highlights the fact that, while electronic signing is becoming more prevalent, the law still favors the traditional, written format for most employment documents.

Potential Penalties and Risks for Employers

Employers who choose to use electronic signatures for employment-related documents must be aware of the legal risks. For example, if an employment contract is concluded electronically and later challenged in court, it could be declared void. In such a case, the employer could face significant legal consequences, including liability for penalties and damages.

Moreover, the legality of a notice of termination could be challenged if the notice was not properly delivered in accordance with the Labor Law. This could lead to a situation where the court rules in favor of the employee, granting them the right to compensation due to improper termination.

Digitalization vs. Legal Reality in Employment Law

While the world is rapidly moving towards digitalization, the legal framework in the field of employment law in the Republic of Serbia is not yet fully aligned with modern technologies like electronic signatures. Although the Law on Electronic Document allows for the use of electronic signatures, the Labor Law imposes strict requirements for the written form of many employment documents.

Until the necessary amendments and alignment of the Labor Law with the Law on Electronic Document are made, employers are advised to exercise caution when using electronic signatures for employment documents. Electronic signing can offer certain advantages in terms of efficiency and convenience, but it also carries significant legal risks that could have serious consequences for employers.

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