Overseas Workers May Be Employees Under Australian Law

If you are a business owner who has:

• retained overseas resources directly (that is not through another business);
• an overseas resource who would be considered an employee under the new rules; and,
• agreements with these resources are done via email to you when you are located in Australia;

are you aware your overseas resource may be considered an Australian employee and they may cost you more than your budgeted for.

Read on to learn why.

Recently, I posted about a Philipino worker who was able to lodge a claim for unfair dismissal under the FairWork Act (Case [2024] FWC 2669).

This once again raises the question as to whether people who reside overseas, who are retained by an Australian company, are in fact Australian based employees covered by the FairWork Act.

Obviously the first test is whether the person is an independent contractor or not.  If they are an independent contractor, then they are not an employee and irrespective of where they are located they are not covered by the FairWork Act and its minimum employment standards.  Check out the difference between and employee and independent contractor here.

But if they are not an independent contractor, they are considered an employee.  This now raises the question as to whether they are an “Australian-based” employee.  All employees are deemed to be “Australian-based” employee unless the employee is to perform duties outside Australia; and, is engaged outside Australia.

Where the work is performed is usually a simple test and easily met.

But what about “engaged outside Australia”?

This was considered in another FairWork case [2023] FWC 2543.  This case considered a US citizen who has never been to Australia, working in Argentina who signed a contract direct with an Australian company.  That signed contract was emailed back to HO in Sydney.

The key question was when was the person engaged.  Were they engaged when they signed the contract (outside Australia), or when the company received the signed contract (in Australia).

And in this regard they looked at the Electronic Transactions Act (1999) (Cth) which states that when a contract is concluded by an electronic communication, such as an email, it is finalised at the place of business of the recipient of the email.  And they looked at another case Winter v GHD Services Pty Ltd [2019] FCCA 775  where it was determined that acceptance of a contract occurs when the acceptance is communicated to the offeror.

So based on these factors, the contract was considered accepted when the email was received by the business in Australia. Thus, the place of engagement was Australia, making the person an “Australian-based” employee.  And more importantly, this person is now covered by the minimum employment standards of the FairWork Act.

Contact Wayne on wayne@arealcfo.com.au or 0412 227 052.

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