How to Avoid Your Overseas Outsourced Worker Being Covered by Fair Work

Hiring offshore staff can be an efficient and cost-effective way to grow your business. However, many Australian employers don’t realise that even overseas workers can be protected under Australian employment laws. A recent Fair Work Commission case has highlighted how easily a simple oversight in contract formation can lead to unexpected Fair Work compliance obligations.

This article explains what business owners need to know, how to reduce legal risk, and the steps to ensure compliance when hiring offshore.

1. Why Fair Work May Apply to Offshore Workers

The Fair Work Commission recently confirmed that overseas contractors may still fall under the Fair Work Act Australia if their employment contract is considered to have been formed in Australia. In other words, it’s not about where your worker performs their duties, it’s about where the employment contract was formed.

In the Pascua v Doessel Group case, a worker based in the Philippines claimed protection under Australian employment law. The employer argued that because the work was performed overseas, Fair Work should not apply. However, the Commission found that the contract was formed in Australia because the employer found out about the worker’s acceptance of the contract while the employer was physically in Australia.

That single factor was enough for Fair Work coverage to apply.

2. The Importance of Contract Formation

The location of contract formation determines which country’s employment laws apply. Under Australian law, a contract is typically formed where the final act of acceptance takes place. This means that even a verbal acceptance over Zoom, or an emailed “yes” from an offshore worker, could make that agreement subject to Australian law if the acceptance is received while you’re in Australia.

This is particularly relevant for business owners, professional services firms, HR managers, and consultants who hire remote contractors or virtual assistants overseas and want to maintain remote workforce compliance. Without clear contract formation processes, businesses in Australia may inadvertently bring offshore employment  under Fair Work coverage.

3. How to Protect Your Business

There are several steps Australian employers can take to avoid unintentional Fair Work obligations when hiring internationally:

• Define where and how contracts are formed. Include a clause stating that acceptance must occur outside Australia.

• Use wet-ink signatures and postal acceptance. Digital signatures and email confirmations can be problematic.

• Document every step. Keep proof of where and when acceptance occurred. Postal receipts can serve as evidence.

• Avoid early starts. Don’t let offshore staff begin work until the signed contract is physically received in the post.

• Review your contracts regularly. Employment laws evolve. What was compliant two years ago may not be today.
  

By implementing these safeguards, businesses can reduce legal exposure and strengthen legal protection for employers, demonstrating due diligence in their compliance practices.

4. Common Myths About Offshore Hiring

Myth 1: Overseas workers aren’t covered by Australian law.
Reality: If the contract was formed in Australia, they may be.

Myth 2: Digital agreements are always valid internationally.
Reality: Valid doesn’t mean exempt, digital acceptance may still trigger Fair Work obligations.

Myth 3: Legal risks only arise for large companies.
Reality: Even small businesses using offshore virtual assistants can be affected.

Understanding these misconceptions helps business owners make informed decisions and avoid accidental non-compliance.

5. Case in Point: Lessons from Pascua v Doessel Group

In this landmark case, the worker claimed entitlements under Australian law despite living and working in the Philippines. The Commission’s decision hinged entirely on contract formation, specifically, that the contract was accepted while the employer was in Australia.

The case reinforced one key message: location of notice of acceptance determines jurisdiction.

To avoid similar disputes, businesses should adopt a formalised process for outsourcing contracts and contract execution. That means ensuring contracts are physically signed overseas, mailed back, and logged with a clear posting date.

This case also highlights the importance of governance and documentation, both of which can be streamlined through modern software systems  or CRM tools that track contract workflows.

6. Practical Checklist for Employers

Before hiring or renewing an agreement with an overseas contractor:

• Include a clause specifying that acceptance must occur outside Australia.
• Require wet-ink signatures and a physical return of the contract.
• Record the timeline of offer, acceptance, and delivery.
• Do not start work until the signed contract is received.
• Conduct periodic contract audits to ensure compliance.

Implementing these steps can save your business from potential disputes, unexpected wage claims, or Fair Work investigations by improving legal compliance for businesses.

Final Thoughts

Hiring overseas talent opens exciting opportunities for Australian businesses, but it also introduces new legal complexities. The Fair Work Commission’s recent decisions make one thing clear, contract formation matters.

By understanding how Fair Work for overseas workers can extend to offshore staff and taking preventive measures, you can protect your business, maintain compliance, and scale confidently.

At Onyx Legal, we provide Australian business legal advice, helping business owners draft and review offshore agreements that minimise legal risk while supporting sustainable growth.

Need clarity on your contracts?

Book a Short Advice Session to ensure your offshore engagements are compliant and secure.

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