Australia Fair Work Act & Overseas Employees: Risks and EOR Options

The way businesses engage talent has shifted dramatically over the past five years. Remote work is no longer just a perk, but a strategic model that companies across industries depend on to stay competitive. Australia, a global leader in employment protections, has now extended the reach of its Fair Work Act (FWA) to include certain remote employees working from outside its borders.

This move is a game-changer for Australian businesses hiring abroad. It signals a new compliance era where “out of sight” no longer means “out of reach.” Employers can no longer assume that remote contractors overseas fall outside Australian law. For companies hiring in markets like the Philippines, the change introduces risks, but also opportunities, if handled correctly.

With new provisions affecting employee rights and protections, businesses need to revisit their models. Whether you are already engaging remote Filipino professionals through EOR Philippines or considering how to expand into new markets with EOR for Australia, now is the time to evaluate your approach.

What Actually Changed (and Why Now)

The Fair Work Act 2009 (Cth) has always been the foundation of employee rights in Australia. Traditionally, its protections, covering areas like unfair dismissal, minimum wage, and workplace standards, applied to employees working within Australia.

Recent rulings, however, have clarified that overseas-based workers engaged by Australian entities may also be protected under the Act. This is particularly relevant in the wake of remote hiring acceleration post-COVID-19.

One of the most notable cases was Joanna Pascua v Doessel Group Pty Ltd (2024), where a Filipino contractor argued she had unfair dismissal protection under Australian law. The Fair Work Commission allowed her claim to proceed even though she never worked in Australia, because her contract was formed with an Australian business.

This case has opened the door for similar claims and signaled a stronger extraterritorial application of the FWA. Employers can no longer assume their obligations end at the border.

Who Is At Risk?

The businesses most at risk are those that:

• Hire overseas workers directly as “contractors” without clear legal structures.
• Engage talent in countries like the Philippines but manage them as employees (with set hours, KPIs, and direct reporting).
• Lack clear compliance strategies or documentation around payroll, benefits, and termination.
• Operate under the assumption that only local law applies.

For example, Australian startups and SMEs often turn to Filipino professionals because of their strong English skills, cultural alignment, and cost efficiency. Without proper frameworks like an EOR in the Philippines, however, these companies may inadvertently misclassify workers, leaving themselves open to legal claims under both Philippine law and now Australian law.

The Legal Levers

The Fair Work Act’s extension relies on a few critical levers:

1. Place of Contract Formation
   If the employment contract is created in Australia, even if the worker performs duties abroad, the FWA may apply.
2. Nature of Engagement
   Workers labeled as “independent contractors” but treated as employees (set schedules, regular pay, company-provided equipment) may be reclassified under Australian law.
3. Employee Protection Provisions
   Key protections such as unfair dismissal, minimum entitlements, and leave may extend to remote employees abroad if they are found to be employed under Australian terms.

This creates a dual-compliance challenge: employers must now navigate both local laws (e.g., employment laws in the Philippines) and Australian labor protections.

What Changes Today

For companies engaging global teams, this shift means:

• Greater exposure to claims such as unfair dismissal or underpayment.
• Need for compliance beyond local rules – companies can’t ignore Australian regulations simply because staff are remote.
• Operational complexity – HR, payroll, and legal must adapt processes for distributed teams.
• Contractor model risks – businesses relying on contractors in the Philippines may need to reevaluate to avoid misclassification.

But it’s not all risk. Forward-looking businesses can turn compliance into a competitive advantage by formalizing employment structures, offering better benefits, and ensuring fair treatment across their global workforce. This is where EOR solutions like Remotify provide immediate value.

Mini Case Snapshots

Case 1: Filipino Worker Wins the Right to File Under FWA

In Pascua v Doessel Group Pty Ltd (2024), a Filipino worker engaged as a contractor claimed unfair dismissal. The Fair Work Commission allowed her claim to move forward, establishing that overseas workers linked to Australian entities could have protections under the FWA.

Look here: This Filipino woman struck a blow against Australian businesses ‘exploiting’ offshore workers

Case 2: Contract Formation Risk

Also, in the case of Gautam Parimoo, an India-born US National v Lake Resouces NL, a company in Australia. Legal analysis shows that even if an overseas employee’s contract is formed in Australia, they may fall under the FWA, even if all work is performed abroad.

See here: Australian Workplace Protections May Extend To Overseas Employees

Risk Self-Assessment (Checklist)

If you answer “yes” to any of these, you may be exposed:

• Do you hire remote workers abroad as “contractors” but manage them like employees?
• Was the employment contract engaged in Australia?
• Do your overseas workers follow fixed schedules or KPIs you set?
• Do you lack local payroll compliance structures (SSS, PhilHealth, Pag-IBIG in the Philippines)?
• Do you manage offboarding without legal due process?

If this resonates, it’s time to rethink your model before risks materialize.

Paths to Compliance (Decision Framework)

Employers have three main options to protect themselves:

1. Keep contractors, but redesign the model
   True contractors should control their own time, provide their own tools, and invoice for services. This is rarely practical at scale.
2. Set up a legal entity abroad
   Establishing an entity in the Philippines provides direct compliance control but is expensive and slow, especially for SMEs.
3. Use an Employer of Record (EOR)
   With EOR Philippines like Remotify, companies can employ workers compliantly without setting up a local entity. The EOR becomes the legal employer, handling payroll, statutory benefits, and HR compliance, while you retain day-to-day management.

For many businesses, the third path offers the best balance of speed, cost, and compliance.

How Remotify Helps

At Remotify, we specialize in making global hiring simple and compliant. For Australian businesses, we provide:

• Compliant EOR solutions in the Philippines to employ Filipino talent with full statutory coverage.
• Payroll compliance across SSS, PhilHealth, and Pag-IBIG.
• Seamless onboarding with locally compliant contracts.
• Benefit administration to attract and retain top talent.
• Expert guidance on employment law, both in Australia and the Philippines.

Whether you’re transitioning from contractors, scaling up, or hiring your first overseas employee, Remotify ensures your team is protected, and so is your business. With our comprehensive solutions, you can focus on growth while we handle the complexities of international employment.

Here Are Some Takeaways

The extension of Australia’s Fair Work Act marks a turning point for remote hiring. It highlights that compliance is no longer optional or bound by geography. For Australian companies hiring abroad, particularly in the Philippines, the choice is clear: adapt now or face significant risk.

By partnering with Remotify EOR, businesses not only gain the confidence to expand globally but also access a streamlined approach to managing their remote workforce. This collaboration offers a comprehensive solution that ensures compliance with local regulations while simplifying the complexities of international hiring. 

Furthermore, companies can rest assured knowing that their teams are protected by robust legal frameworks, allowing them to focus on growth and innovation without the burden of compliance worries. In this rapidly evolving landscape, making informed decisions now will pave the way for enduring success in the future.

See here: FWA 2009 

Frequently Asked Questions (FAQs)

Does the Fair Work Act apply to employees working entirely overseas?

Yes, the Fair Work Act (FWA) can apply to employees working abroad if their contract is formed in Australia or if they are engaged under Australian terms. This means that even if the employee never physically enters Australia, the FWA may still govern their employment. It is essential to understand the implications of this international reach. Proper legal guidance is recommended to ensure compliance.

Can we keep contractors and avoid risk?

You can classify workers as contractors, but only if the relationship genuinely reflects independent contracting. If your organization controls aspects like hours, tools, and tasks, those individuals might be classified as employees legally. This classification can expose you to various liabilities, so it’s crucial to assess the nature of the relationship accurately. Consulting with legal experts can help mitigate risks.

What minimum wage applies?

The local minimum wage in the Philippines applies to workers there; however, if they fall under the FWA, Australian minimum standards might also be relevant. This dual exposure to compliance requirements is important to understand. Employers need to navigate these regulations carefully to ensure fair compensation. Consulting a legal expert in employment law can clarify which standards apply.

How fast can we move to EOR with Remotify?

Remotify can facilitate the onboarding of your hires into compliant employment structures in as little as one week. This efficient process ensures that you’re meeting legal requirements in a timely manner. Speedy compliance is important in maintaining operational continuity. Partnering with an Employer of Record can simplify the complexities associated with overseas employment.