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Last updated: 5 November 2001
Circular No 2001/5 : Electronic Transactions Act 1999
For information relating to the content of this Circular or the Electronic Transactions Act 1999 please contact the Attorney-General's Department.The purpose of this circular is to provide an update on the implication of the Electronic Transactions Act 1999 (ET Act) for communication arising as a consequence of action under various provisions of the Public Service Act 1999 (PS Act) and subordinate legislation. Previous advice was provided in Circular 2000/3 of 10 October 2000.
Background
2. The ET Act, which came into effect on 15 March 2000, provides the legal basis for Agencies to comply with the commitments set out in the Prime Minister's 'Investing in Growth' statement. In that context, the Prime Minister committed the Government to delivering all appropriate Government services online by 2001.
3. Between 15 March 2000 and 1 July 2001 the ET Act only applied to Commonwealth laws that were specifically identified by regulation. From 1 July 2001 the onus shifted from one of including Commonwealth laws to one of excluding Commonwealth laws from the application of the ET Act. All Commonwealth laws that have not been specifically exempted by the regulations now come under the ET Act.
4. In February 2000, the Public Service and Merit Protection Commission (PSMPC) surveyed Agencies that employ staff under the PS Act to identify any concerns about the ET Act applying to communication arising as a consequence of actions arising under various provisions of the PS Act and the subordinate legislation. As a consequence it was decided not to include this legislation under the ET Act prior to 1 July 2001.
5. The general effect of the ET Act from 1 July 2001 is that it will ensure the validity of electronic communications to satisfy the provisions of the PS Act and the subordinate legislation unless the provisions have been specifically exempted through the Electronic Transaction Regulations from the application of the ET Act. Subject to certain powers (see para 8), the Commonwealth must accept electronic communications to satisfy legal obligations under Commonwealth laws. However, the ET Act does not compel the Commonwealth to initiate electronic communication.
6. Discussions with several Agencies in early 2001 identified their needs to sight original documents and certified true copies of documents in relation to the engagement process and in relation to concerns about the state of health of employees. As a consequence, section 22 of the PS Act and regulations 3.1(2) and 3.2(2) of the Public Service Regulations 1999 have been exempted from the application of the ET Act. Agencies may continue to request the production of original or certified true copies of documents to satisfy their needs under these provisions. It would also be prudent for Agencies to continue to issue any notices to employees under these provisions in a paper-based form.
7. We do not, at this stage, anticipate taking steps to seek to exempt other provisions of the PS Act or subordinate legislation from the application of the ET Act.
Issues
Definitions
Commonwealth entity - is defined broadly to mean a Minister, Commonwealth officer or employee, Commonwealth office holder, Commonwealth authority or an employee of a Commonwealth authority. The term is used as a shorthand way to refer to the Commonwealth government. Commonwealth entities are given powers in sections 9, 10 and 11 of the ET Act to issue requirements in relation to certain matters that must be satisfied when dealing with them. A Commonwealth entity is given the power to specify:
- particular information technology requirements for electronic communications with the Commonwealth entity (including an electronic communication that comprises a signature method); and
- procedures that a person must follow to verify the receipt of information given to that Commonwealth entity.
The term Commonwealth entity is also used in the consent provisions in sections 9, 10 and 11 of the ET Act to limit the category of persons who have consent powers.
Consent - includes consent that can reasonably be inferred from the conduct of the person concerned. This term is used in sections 9, 10 and 11 in provisions that state a person must consent to receiving information in the form of an electronic communication. While consent would clearly be demonstrated by a person's express statement of consent, the purpose of this definition is to ensure that express consent is not required in every case and that consent can be inferred from, for example, a history of transactions or previous dealings. However, when determining whether consent can be inferred from a person's conduct it will be necessary to look at the circumstances of the electronic communication, including the express statements of the person. A person should not, by the operation of this definition, be deemed to have consented to the receipt of information in the form of an electronic communication merely because they have sent or previously used electronic communications. If a person sent an electronic communication containing a message in which the person explicitly stated that they did not want to receive any or all information in the form of an electronic communication, then that express withdrawal of consent must be accepted.
Transaction - is defined to include transactions of a non-commercial nature. This term is intended to be read in its broadest sense of doing something, whether it be conducting or negotiating a business deal or simply providing information or a statement. It should not be read narrowly to confine it to contractual or commercial relationships. Nor is it limited to the actual transmission of the information. The purpose of this definition is to clearly include within the meaning of transactions any transactions with or by the government. For example, it includes activities of government agencies in their role as service providers and it includes instances where citizens furnish information to a government agency. This definition is intended to remove any doubt about the broad meaning of the word and is not intended to limit the existing breadth of the legal meaning of 'transaction'.
Application of legal requirements to electronic communications
8. The sole purpose of the ET Act is to enable people to use electronic communications in the course of satisfying their legal obligations in respect of a Commonwealth law in the same way that paper based communications may be used. The ET Act itself does not compel Agencies to use electronic communication. However, Agencies must accept and receive electronic communications. They may specify particular information technology requirements for electronic communications with the Agency (including an electronic communication that comprises a signature method), and procedures that a person must follow to verify the receipt of information given to the Agency.
9. Section 8 of the ET Act establishes the basic rule that a transaction is not invalid because it took place wholly or partly by means of one or more electronic communications. It is an expression of the fundamental principle of media neutrality that underpins the Act. The provision is only intended to operate as a default provision, providing a general rule that will have effect when the specific provisions in Part 2 of the ET Act, including sections 9-12 do not operate.
10. The specific provisions contained in sections 9-12 of the ET Act indicate that a requirement or permission under a law of the Commonwealth for a person to provide information in writing, to sign a document, to produce a document, or to retain information or a document can be satisfied by an electronic communication, subject to certain minimum criteria (see para 12) being satisfied.
11. The requirement rules operate where a Commonwealth law creates a legal obligation for a person to produce a document or provide information in writing. The permission rules operate where, under a Commonwealth law, a person is permitted to give information or produce a document but there is no legal obligation that these be in writing.
12. The minimum criteria include:
- conditions imposed by a Commonwealth entity such as the requirement for particular information technology requirements to be satisfied for electronic communications with the Commonwealth entity, or procedures that a person must follow to verify the receipt of information given to that Commonwealth entity;
- consent provisions in sections 9-11 of the ET Act that state a person must consent to receiving information in the form of an electronic communication. Commonwealth entities and persons acting on behalf of Commonwealth entities are excluded from the consent provisions; and
- a central condition imposed on the use of electronic communications by section 9 of the ET Act (and which is also mirrored in sections 11 and 12) that, at the time the information is given, it must be reasonable to expect that the information would be readily accessible so as to be useable for subsequent reference.
13. The readily accessible provisions deal with the concepts of accessibility and useability. Their objective is to ensure that others will be able to access and use the information contained in the electronic communication and that transactions are not subsequently vitiated by a lack of access to the information.
14. The ET Act also sets out rules, which apply in the absence of any contrary agreement, to determine the time and place of dispatch and receipt of electronic communications and the attribution of electronic communications (sections 14-15).
The Electronic Transactions Act and the Public Service legislation
15. Interpreting the nature of a transaction in the PS Act and the subordinate legislation, and relating it to the provisions of the ET Act, is not always straightforward.
16. The PS Act and the subordinate legislation provide for a number of transactions where the Commissioner, the Merit Protection Commissioner, or an Agency Head is empowered or required to make an instrument or issue a document of general application for the purposes of the Act or the regulations. Broadly, these include things like making a determination in writing, or making or issuing guidelines or delegations in writing. We have received legal advice that indicates that these types of transactions will not generally come under the specific provisions set out in sections 9-12 of the ET Act. However, the general rule - section 8 of the ET Act - will apply with the effect that a Commonwealth entity that transacted electronically in making an instrument or issuing a document of the kinds indicated will have validly exercised the power or discretion under the relevant provision of the PS Act or subordinate legislation.
17. The effects of the ET Act on a section 26(1) agreement are also worth noting as an example. Section 26(1) of the PS Act provides:
(1) An Agency Head may enter into an agreement in writing with an APS employee for the employee to move to the Agency Head's Agency from another Agency.
We have received legal advice that indicates that none of the specific provisions in section 9-12 of the ET Act apply in this case as the requirement is specifically about the form of agreement which the Agency Head and the employee are permitted to make by force of section 26(1) of the PS Act. It is not a requirement to 'give information in writing', or to 'record information in writing' etc.
18. As Agencies are excluded from the operation of the consent provisions in sections 9, 10 and 11 of the ET Act (because Agencies come within the definition of Commonwealth Entity in the ET Act), they must accept electronic communications. The impact of the obligatory aspect of ET Act, however, can be reduced by the Agency requiring that a particular kind of electronic communication be used to communicate with it, and/or that the person communicating with the Agency takes certain action to verify receipt of the information by the Agency.
19. We have received legal advice that supports the view that all APS employees are Commonwealth entities when performing official duties, including exercising delegated powers and functions. They are not, however, Commonwealth entities when the transactions under the PS Act and the subordinate legislation in which they are involved relate to issues personal to them in their capacity as employees. In regard to these transactions, Agencies must accept electronic communications from employees with regards to the provisions of the PS Act and the subordinate legislation from 1 July 2001. As recipients of electronic communication relating to these transactions, APS employees are also covered by the consent provisions in sections 9, 10, and 11 of the ET Act.
- An APS employee seeking a review of action under the PS Act, can transact with the Commonwealth (eg lodge a review of action) electronically. Under the ET Act, the Commonwealth is required to receive an electronic communication from an APS employee subject to the communication meeting any specified requirements and the employee taking any required action to verify that the recipient has received the communication.
- If another person or committee has conducted the review, the Merit Protection Commissioner must give the employee a copy of the report and any recommendation made by the Merit Protection Commissioner about the action. Under the ET Act the Merit Protection Commissioner may only transact electronically if the employee consents otherwise the transaction must be in writing. The employee may choose to transact electronically by giving consent. Consent may be inferred by previous conduct.
20. A significant proportion of communication that must take place in writing in the context of the PS Act and the subordinate legislation occurs between persons who are Commonwealth entities. The person who initiates the communication may choose to transact electronically or in writing. If they choose to transact electronically they must comply with any IT requirements set by the recipient. They may also be required by the recipient to take action to verify receipt of information. The recipient must accept/receive an electronic communication where the sender complies with any IT requirements that have been set.
21. To benefit from the flexibilities provided by the ET Act, Agencies need to:
- consider the purpose of communication originating from Agency Heads and delegates in the context of the PS Act and the subordinate legislation and make decisions about whether they wish to communicate electronically;
- ensure that an employee acting in a personal capacity or persons who are not Commonwealth entities (the consent provisions of the ET Act do not extend to Commonwealth entities) have given consent to receive electronic communications before the Agency proceeds to communicate in this way. Consent can be inferred from a person's conduct. For example, the fact that the recipient has used electronic mail to communicate with the Agency should generally be sufficient to allow the Agency to assume the person's consent to receiving further information at that email address; and
- consider any specific IT requirements that they may wish to impose on persons or Commonwealth entities who wish to transact electronically for the purposes of the PS Act or the subordinate legislation, and any action a person must take to verify receipt of information by the Agency. Agencies are encouraged to ensure that any requirements are appropriately publicised. An Agency may wish to impose different requirements on different types of communication according to security, privacy or other needs.
22. The Commissioner and the Merit Protection Commissioner will make decisions on a case by case basis about whether electronic communication is appropriate for information and communication that is initiated by the Public Service and Merit Commission under the PS Act and the subordinate legislation.
23. The attached table summarises the key implications of the ET Act for the main communications that arise as a consequence of action under the PS Act and the subordinate legislation.
Further advice
24. Enquiries from Comnet members and their senior staff relating to the implication of the ET Act on communications arising from the operation of the PS Act can be directed to the PSMPC's Helpline, telephone (02) 6202 3859.
25. The ET Act, the Regulations and other general information on electronic transactions are available on the Attorney-General's Department website located at http://law.gov.au/ecommerce.
Jeff Lamond
Team Leader
Staffing, Structures and Performance Team
October 2001
