Yemelyanova L. Unified Employment Agreements Accounting System and other Important Changes in Labor Legislation // Petroleum. – 2020 - № 4.
Almaty, Republic of Kazakhstan, August 29, 2020
This article is an overview of important digitalization novels of May 2020: the labor legislation of the Republic of Kazakhstan was added employers' obligation to enter information into the Unified Employment Agreements Accounting System (the "UEAAS") and right to conclude employment agreements and issue employer's acts in electronic form. The article highlights international and local prerequisites for digitalization in the labor domain and analyzes some topical issues concerning introduction of the UEAAS and application of electronic employment agreements and electronic employer's acts.
The article was prepared as of August 29, 2009.
UNIFIED EMPLOYMENT AGREEMENTS ACCOUNTING SYSTEM (UEAAS)
General Characteristics of the UEAAS
The legal basis for the UEAAS introduction is the Law of the Republic of Kazakhstan No. 321-VI ZRK dated May 4, 2020, amending, effective May 16, 2020, the Labor Code of the Republic of Kazakhstan No. 414-V dated November 23, 2015 (the "Labor Code").
The UEAAS is an information system designed to automate the accounting of employment agreements, labor activities and number of employees (Article 1.1(35-1) of the Labor Code).
Rights and Obligations of Employees and Employers
The employer's obligation to enter information into the UEAAS corresponds to the employee's right to obtain information from this system (Articles 22.1(25) and 23.2(27) of the Labor Code)..
The employer is also entitled to obtain from the UEAAS information on the labor activities of candidates (on their prior consent) and employees (Article 23.1(13) of the Labor Code). Currently, the Labor Code does not provide for the previously announced right of the employer to obtain from the UEAAS information on candidates and employees other than that on their labor activities (e. g., criminal record, education, health, residential address, family composition, subpoenas, etc.). Similarly, employers have no right to obtain information on their former employees (e. g., in order to check fulfillment of non-competition obligations).
The scope of information to be entered into (and, accordingly, obtained from, the UEAAS) is limited to the following: details of the parties, labor function (position, specialty, occupation, qualification), place of work performance, term of employment agreement, date of the start of work, date of conclusion and number of the employment agreement, including changes in these data, and information on the employment agreement termination. Please note that the Labor Code requires entering information not only about the employment agreement, but also about supplementary agreements thereto. This obligation applies to supplementary agreements modifying the information mentioned above.
The historical data (i. e., information on employee's previous employers) cannot be entered into the system. However, it is expected that employers will be obligated to enter into the UEAAS the information on current employment agreements.
Procedure for Entering Information into the UEAAS
The procedure (place and deadlines) for entering information into the UEAAS has not been defined as of the date of this article preparation. Pursuant to Article 23.2(27) of the Labor Code, the information must be entered in the manner prescribed by the Ministry of Labor and Social Protection (the "UEAAS Working Procedure").
According to the draft UEAAS Working Procedure, the information will have to be entered on the Labor Exchange portal at www.enbek.kz. However, until the Ministry of Labor and Social Protection adopts the UEAAS Working Procedure, there is no legal basis for entering the information on the said portal, as the Labor Code does not mention the Labor Exchange portal as the "place" for entering data into the UEAAS.
Labor Exchange Portal as the UEAAS Internet Platform
It should be mentioned that judging by the sign "© 2020 Human Resources Development Center JSC" observable on the Labor Exchange portal and according to KazNIC information, exclusive rights to the Labor Exchange portal are held by the Human Resources Development Center JSC (the "HRDC"), not the Ministry of Labor. Nonetheless, the Security Policy page of this portal (paragraph 1 of the "Use of Content" section) reads that "the portal and certain items posted on the portal are the intellectual property" of the Ministry of Labor.
There is also an official clarification that the UEAAS is owned by the Ministry of Labor and technically supported by the HRDC. The HRDC is a commercial organization on the form of a joint stock company. According to HRDC Charter, the Ministry of Labor is its sole shareholder.
The HRDC's main subject of activities is to provide informational and analytical support to the state policy in labor market regulation and to the implementation of active measures to promote employment, and methodological support to local employment authorities and public employment centers.
Within this subject, the HRDC performs a wide range of functions, including creation, maintenance and development of the unified information system in the social-and-labor area, maintenance and development of the "Labor Exchange" state Internet resource, creation and maintenance of personalized databases (including participants in the accumulative pension system; participants in the social insurance system; individuals for whom contributions and/or allocations to the Social Medical Insurance Fund have been paid; disabled persons; foreign nationals having obtained work permits; recipients of state targeted social assistance), and a number of analytical, technical and other services.
Thus, regardless of who actually owns the Labor Exchange portal and the UEAAS, the HRDC has access to all UEAAS information when it is entered via the Labor Exchange portal.
According to the portal Security Policy (paragraph 2 of the "Use of Content" section), "it is strictly prohibited to copy, reproduce, republish, download, publish, broadcast, transmit or distribute any content from this portal without the approval of the RK Ministry of Labor and Social Protection of Population. The use of content from the portal is only possible on consent of the RK Ministry of Labor and Social Protection of Population and with publishing or pronouncing the link to the portal."
Confidentiality of Data Entered into the UEAAS
According to the User Agreement (Clause 1.2) available on the Labor Exchange portal, "all data posted on the portal are publicly available, except for the passwords to access users' personal accounts." The portal administration also has the right "to block without warning a user's account for violating the rules of this User Agreement." According to the Security Policy (paragraph 6 of the "Personal Data and Security" section), "data on this portal are of purely informative nature and any amendments can be made thereto by the portal Administration without any prior notice."
These provisions mean that currently employers are entering information into the UEAAS via the Labor Exchange portal proactively, on a non-confidential basis. The entered personal data will have the "publicly accessible" status. In this connection, we believe that pending adoption of the UEAAS Working Procedure by the Ministry of Labor, the information on employment agreements may be entered via the Labor Exchange portal only on written consent of the employee who is informed about the non-confidential status of the entered information on his/her labor activities. The Ministry of Labor provided no direct answer to the question whether the information included in the UAAES constitutes a state secret. Most likely, the UEAAS does not have the "state secret" status, although the information entered into it may have such according to the Law of the Republic of Kazakhstan No. 349-I "On State Secrets" dated March 15, 1999 (e. g., information on the personnel composition of organizations working in the interests of state security).
Nevertheless, according to the Ministry of Labor, the UEAAS has successfully passed testing for compliance with information security requirements at the "State Technical Service" National State Enterprise of the National Security Committee of the Republic of Kazakhstan, and received an information security certificate.
Pursuant to Article 16(41-7) of the Labor Code, the Ministry of Labor must ensure confidentiality and protection of employee's personal data contained in the UEAAS in accordance with the legislation of the Republic of Kazakhstan on personal data and protection thereof.
Therefore, we consider it necessary to amend the User Agreement and the Security Policy of the Labor Exchange portal in order to ensure confidentiality and protection of personal data entered into the UEAAS.
In addition, the portal Administrator should not have the right to change the data entered into the UEAAS without employer's approval and should not have the right to block users' legitimate accounts, because the obligation to enter information into the UEAAS is universally binding.
Since the UEAAS operator will be an organization that is not a governmental agency, for the purposes of state security and ensuring constitutional rights of citizens, in addition to the technical side of data protection, it would be deemed appropriate to legislatively introduce additional guarantees of UEAAS database protection against subjective factors of unsanctioned use and leakage of information – eventually this database will come to contain a labor "dossier" on each working person.
Objectives of Data Collection in the UEAAS
Pursuant to Article 7.4 of the Law of the Republic of Kazakhstan "On Personal Data and Protection Thereof," "personal data processing shall be limited to the attainment of concrete, predetermined and lawful objectives. No personal data processing inconsistent with the objectives of personal data collection shall be allowed." At the moment, the labor legislation does not define the list of objectives to be attained when data will be collected in the UEAAS, except for "automation of accounting."
"Automation" is to be understood as "the process of using the means of information-and-communication technologies to optimize the creation, search, collection, accumulation, storage, processing, obtaining, use, conversion, display, distribution and provision of information" (Article 1.1 of the Law of the Republic of Kazakhstan No. 418-V "On Informatization" dated November 24, 2015).
Therefore, the literal understanding of the UEAAS definition suggests that this information system is designed for "the process of using the means of information-and-communication technologies to optimize" the accounting of employment agreements, labor activities and number of employees. Of course, "the process of using the means of information-and-communication technologies" cannot be a goal in itself for an information system. Therefore, the objective of accounting is the only lawful objective of data collection and processing in the UEAAS. That is, essentially, the UEAAS is a "storage tank" for selective information and cannot [if interpret the law literally] be used for other purposes (including analytical).
We believe that these issues should be settled in the UEAAS Work Procedure or another regulatory legal act in order to comply with the requirements of personal data protection against unlawful use.
Commercial Secret Protection
The composition of positions and the number and personal composition of employees is, as a rule, a commercial secret or other employer's protected information, the protection of which, in addition to personal data protection, is to be ensured by the Ministry of Labor, HRDC and other governmental agencies and persons having access to the system. According to Article 28.9 of the Entrepreneurial Code, "governmental agencies and their officials cannot, without entrepreneur's consent, distribute and/or use the information constituting commercial secret that comes to their knowledge by virtue of performing their official (service) duties, except for the cases stipulated by the laws of the Republic of Kazakhstan."
Employers for whom these issues are relevant should take steps to protect their commercial secret as per Article 28 of the Entrepreneurial Code (e. g., determine the list of information constituting commercial secret, establish the procedure for handling such information, inform the recipients of information about its status, etc.).
According to Article 16(41-8) of the Labor Code, the Ministry of Labor must provide information from the UEAAS to individuals and legal entities taking into account only the requirements of legislation on personal data and protection thereof. The legislation on protection of commercial and other secrets protected by law is not taken into account by the Labor Code, but must nevertheless apply by virtue of the provisions of the Entrepreneurial and Civil Codes of the Republic of Kazakhstan.
One needs to understand that, unfortunately, the Labor Code and the technical characteristics of the UEAAS do not provide for a mechanism to bring to the knowledge of the Ministry of Labor, HRDC and other persons the status of commercial secret for certain data entered into the UEAAS. In its response, the Ministry of Labor informs that "access to the UEAAS data is provided only in the framework of the following regulatory legal acts: 1. Law of the Republic of Kazakhstan No. 401-V ZRK "On Access to Information" dated November 16, 2015. 2. Law of the Republic of Kazakhstan No. 94-V "On Personal Data and Protection Thereof" dated May 21, 2013. 3. Decree of the Government of the Republic of Kazakhstan No. 832 "On Approval of the Unified Requirements in the Field of Information-and-Communication Technologies and Ensuring Information Security" dated December 20, 2016." In turn, Law of the Republic of Kazakhstan No. 401-V "On Access to Information" dated November 16, 2015 (Article 11.2) sets forth that "any information shall be provided upon request, except for limited access information."
Paragraph 13 of the Rules for Organizing the Support and Functioning of "Labor Exchange" State Internet Resource (approved by Order No. 92 of the Minister of Labor and Social Protection of Population of the Republic of Kazakhstan dated February 22, 2019) sets forth that "in order to ensure access to information, the data of "Labor Exchange" Internet Resource shall also be placed on the open data Internet portal in machine-readable form."
The UEAAS will contain information sensitive for the state, businesses and employers that can be used for different bad faith purposes (industrial espionage, bribery and enticement of employees, etc.). Beside governmental agencies, access to the UEAAS will be provided to employees of the state-owned, yet commercial, legal entity, who are obscure as to whether or not, or to what extent and for what term, they assume confidentiality obligations. Article 8.2(3) of the Law of the Republic of Kazakhstan No. 482-V "On Population Employment" dated April 6, 2016 authorizes HRDC to provide information and consulting services in the social-and-labor sphere to individuals and legal entities. In this connection, HRDC has the possibility to use the UEAAS data to provide such commercial services. We believe that due to confidentiality of data contained therein, the UEAAS database cannot be an object of information market.
Therefore, it is proposed to statutorily provide more legal guarantees of non-use for commercial purposes and non-disclosure of the UEAAS information relating not only to personal, but also to other data, including anonymized (e. g., staff schedule, HR movement indicators, etc.), that constitute a legal entity's (employer's) commercial secret.
Certain Issues of Working with the UEAAS
As to the scope of information entered into the UEAAS, the system should not impose additional obligations beyond those established by the Labor Code (e. g., to enter data regarding employee's skills, military duty, etc.). In turn, employers may enter excessive information (as compared to the Labor Code requirements) only on employees' written consent. On a separate note, we would like to draw employers' attention to the correct identification of employee positions in accordance with the RK National Classifier 01-2017 "Occupations Classifier" when entering them into the UEAAS. HR managers often enter positions into this field of the system formally, without having thoroughly studied the functionality provided in the Occupations Classifier and without comparing it with the functionality of an employee.
Such an approach might risk a dispute with the employee over the functions he/she performs, if the position chosen according to the classifier does not correspond to the employee's actual job duties. To avoid this problem, it is recommended to bring the names of positions and the content of work performed in line with the Occupations Classifier, Positions Qualification Manual, tariff-and-qualification manuals, professional standards and other reference documents in accordance with Article 101.8 of the Labor Code.
When using the existing version of UEAAS via the Labor Exchange portal one still encounters inconsistencies with labor legislation and incorrect or incomplete display of data in the employee's personal account on the e-Government portal, which will hopefully be eliminated by the time the UEAAS Working Procedure is adopted.
Registration or Accounting of Employment Agreements?
As it follows from the Labor Code provisions, the UEAAS does not bear a registration nature, but is intended for data accounting. Hence, the validity of employment agreements does not depend on whether data are entered into the UEAAS.
Information from the UEAAS is not mentioned in Article 35 of the Labor Code among the documents confirming employee's labor activities. Therefore, we deem it necessary not to apply the term "employment agreement registration" to the entry of information into the UEAAS.
Performance of Employer's Obligation to Enter Information into the UEAAS
According to the draft UEAAS Working Procedure, it is planned to establish that an employer has performed its obligation to enter information into the UEAAS on the date the employee has received the notice in his/her personal account on the e-Government portal.
However, only the technical "typing in" (or transfer through the integration module) of information into the UEAAS depends on the employer. Further "movement" of data through the e-Government system to the employee's personal account is beyond the employer's control. The employer will never be able and is not entitled to log into the employee's private account and make sure that the notice is delivered to the employee. Moreover, employees may have no electronic digital signature and no personal account (or access thereto). The functioning of the UEAAS itself (which might suffer disruption) does not depend on the employer either. Therefore, we hope that in the final version of the UEAAS Working Procedure the Ministry of Labor will amend this provision to make it fairer towards employers.
In order to prepare for entering data into the UEAAS, the employer is recommended to at least carry out internal labor audit, prepare personal files, lists of employees and their positions (taking into account the selection of occupations suitable according to the Occupations Classifier), obtain the employees' consents to the collection and processing of personal data, and reflect in the internal employer's acts (orders, regulations, rules, job descriptions and other instructions) the duties of persons in charge of entering data in the UEAAS and of using the corporate electronic digital signature.
Once the information is entered into the UEAAS, it is recommended to print out the cards of the employment agreement (with the assigned ID) and supplementary agreements thereto and keep these in the employee's personal file as a confirmation that the information has been timely entered into the UEAAS in accordance with the law and the UEAAS Working Procedure.
ELECTRONIC EMPLOYMENT AGREEMENTS
Entry of accounting data into the UEAAS should be distinguished from the conclusion of an employment agreement in electronic form (the "EEA"). Currently, the UEAAS is not an electronic platform for EEA conclusion, but work in this direction is underway (in particular, there is already a yet idle tab "Electronic Employment Agreements").
Pursuant to the Labor Code, EEAs or copies of paper employment agreements do not have to be entered into (uploaded to) the UEAAS. Alongside with the provisions on the UEAAS, the Labor Code has been supplemented by the right of the parties to conclude an EEA (Article 33.1 of the Labor Code). The parties are not obligated to conclude the employment agreement exclusively in electronic form and may choose between the conventional ("paper") and electronic format.
An EEA may be concluded only using the electronic digital signature issued by the National Certification Authority of the Republic of Kazakhstan. Local corporate digital signatures of a particular employer cannot be used for the EEA purposes and foreign digital signatures must undergo a special authentication procedure in accordance with the Law of the Republic of Kazakhstan No. 370-II "On the Electronic Document and Electronic Digital Signature" dated January 7, 2003.
The possibility to conclude employment agreements in electronic form is offered by various commercial and non-commercial electronic platforms and programs. Concluding the EEA (if the parties have electronic digital signatures) is fast and convenient.
However, before deciding to conclude an employment agreement in electronic form, it is necessary to assess the risks of the "digital" form of this document, which is of paramount importance for labor relations. Since an e-platform is normally a third party service, it is necessary to obtain the employee's written consent to the collection and processing of personal data when using that service (whose employees can potentially have open or hidden access to the document), as well as to elaborate on the employment agreement confidentiality and personal data protection provisions in accordance with the requirements of legislation on personal data and protection thereof and legislation on informatization, and the requirements of a particular employer and/or employee.
In addition, it is necessary to check:
- The real, not declared, reliability of document safekeeping during the retention period established by legislation (which is 75 years);
- The possibility to ensure the making of e-document notarized copies, if necessary;
- The procedure for proving the document authenticity in case of a dispute;
- The procedure for depositing the EEA in the state archive upon expiration of the retention period or in case of organization liquidation; and
- Other points (including those mentioned above, in case of terminating the use of the e-platform on the basis of which the EEA was concluded).
According to Article 10.3 of the Law "On the Electronic Document and Electronic Digital Signature," "the owner of registration certificate for the electronic digital signature of a legal entity – head of the legal entity or a substituting person – has the right to delegate the authority to use the electronic digital signature on behalf of the legal entity to an employee of the legal entity or an appointed person."
If this right is exercised, the employer must not only issue the appropriate power of attorney, but must also stipulate in the relevant employer's acts and employee's job description and/or employment agreement the employee's obligations to properly ensure the safety and lawful use of the delegated electronic digital signature.
ELECTRONIC EMPLOYER'S ACTS
Pursuant to Article 11 of the Labor Code, employer's acts are to be executed in writing or in the form of electronic document certified by electronic digital signature.
Same as in the case of electronic employment agreements, formation of employer's acts gives rise to similar issues related to ensuring safety and confidentiality.
Moreover, there are issues related to ensuring the act coordination with the relevant employees along the corporate structure, as well as ensuring that employees are made familiar with the employer's e-act. We believe that employers cannot obligate employees to obtain personal electronic digital signatures. Therefore, if there is no such digital signature, employees should be made familiar with the employer's acts relating to them in writing.
It is also necessary to distinguish between a personal digital signature and a corporate digital signature. We believe that employer's e-acts should be issued only by an authorized representative using his/her personal corporate signature (issued in the name of such representative), not his/her personal electronic digital signature. This conclusion is due to the fact that the officer will in this case act on behalf of the employer, not on his/her own behalf.
Conclusion
- The Unified Employment Agreements Accounting System accumulates confidential information about all employees and employers of the Republic of Kazakhstan. The operator of this system is not a governmental agency, but a state-owned joint stock company "Human Resources Development Center". In this connection, the legislation needs to clarify the state's ownership over the UEAAS and the objectives of using the UEAAS information, as well as to strengthen the protection regime of state secrets, personal data and commercial and other protected information entered into this system.
- In order to properly discharge the statutory obligation to enter data into the UEAAS, employers are recommended to carry out preparatory activities aimed at ensuring the qualified identification of employee positions according to the National Classifier, streamlining employee personal files and formalizing the duties of employees in charge of entering the data.
- The exercise of the right to issue employer's acts in electronic form and to conclude "electronic" employment agreements is associated with a range of technical, practical and legal issues, including the need to ensure the safekeeping of documents within the time limits established by legislation.