Far Away in a foreign land
In a recent case involving the Doessel Group Pty Ltd (2024fwc2669.pdf), the Federal Circuit Court ruled that Ms Joanna Pascua, an individual employed by the company and based in the Philippines, was in fact a national system employee under Australian law.
This landmark decision has significant implications for Australian employers, as it highlights the potential risks and obligations associated with engaging foreign-based employees and also addresses the age old debate of employee or independent contractor.
The case centred around the distinction between an employee and an independent contractor, with the Doessel Group arguing that Ms Pascua was an independent contractor based in the Philippines and therefore not subject to Australian employment laws.
However, the court ultimately determined that Ms Pascua’s role and relationship with the company met the criteria of a national system employee, thus making her entitled to the protections and entitlements afforded to employees under Australian law. In this instance, Ms Pascua was cleared to run an Unfair Dismissal, which will be watched with eager eyes by employers across Australia.
This decision serves as a warning to Australian employers that they are not immune to prosecution from foreign-based employees, and underscores the importance of ensuring compliance with relevant employment laws, regardless of where their employees are located.
Key takeaways
The key lessons for Australian employers to take away from this case include:
1. Clarify employment status:
It is crucial for employers to clearly define the nature of their relationship with employees, whether they are based locally or overseas.
Misclassifying employees as independent contractors can lead to adverse ramifications.
2. Understand jurisdictional issues:
Employers should be aware of the potential for their employees based overseas to fall under the jurisdiction of Australian employment laws, especially in cases where the work is performed predominantly for the benefit of the Australian entity.
3. Seek advice
Given the complexities of international employment law, employers should seek legal advice to ensure compliance with relevant regulations and avoid costly legal disputes.
4. Implement robust employment contracts:
To mitigate the risks associated with employing individuals in foreign jurisdictions, employers should ensure that they have comprehensive employment contracts in place that clearly outline both parties’ rights and obligations.
A reminder about compliance
The Doessel Group Pty Ltd case serves as a timely reminder for Australian employers to carefully consider their obligations when engaging foreign-based employees and to take proactive steps to ensure compliance with relevant laws and regulations. Failure to do so can result in costly legal consequences and reputational damage for companies operating in a globalised workforce.
Connect with us
If you would like to know more about your responsibility as an employer or have any questions , please contact us at hello@mapien.com.au and a Mapien Workplace Strategist will be in touch within 24 hours.