Are Your Offshore Contractors Actually Employees and Therefore Protected by the Fair Work Act?

Many Australian businesses rely on offshore contractors for administrative or professional services. But are you sure your contractors are considered contractors under Australian law?

In the case of Pascua v Doessel Group Pty Ltd [2025] FWC 1833, the Fair Work Commission (FWC) awarded an offshore paralegal who was purportedly engaged as an independent contractor compensation for unfair dismissal. 

The FWC had previously found that Ms Pascua was an employee and not an independent contractor based on the nature of her engagement. She was therefore entitled to pursue an unfair dismissal claim under s.394 of the Fair Work Act 2009.

 

Background

Ms Pascua, based in the Philippines, worked as a paralegal for an Australian firm. She was engaged under an Independent Contractor’s Agreement, submitted invoices and was paid $18 per hour.

Despite being termed a contractor, Ms Pascua:

• worked set hours which aligned with Australian business hours;
• was allocated tasks and files daily and performed ongoing duties similar to other employees;
• was required to perform the work herself.

When her engagement was terminated in March 2024 over concerns about work quality, Ms Pascua lodged an unfair dismissal claim.

The Commission found that Ms Pascua was an employee, not a contractor, noting that:

• she was required to perform the work personally;
• her role was ongoing and integrated into the business;
• her hourly rate was below the relevant Award, which is inconsistent with the higher rates contractors usually charge.

 

Offshore workers and the Fair Work Act

The employer appealed the decision and argued that Ms Pascua could not be an Australian based employee because she lived and worked overseas and the contract of employment was formed outside Australia. The employer argued that that she was therefore engaged outside Australia under s.35(3) of the Fair Work Act 2009.

To be protected by the Fair Work Act, an employee must be an Australian based employee, which includes an employee “who is employed by an Australian employer (whether the employee is located in Australia or elsewhere” (s.35(2)(b) Fair Work Act 2009). However, this “does not apply to an employee who is engaged outside Australia … to perform duties outside Australia” (s.35(3) Fair Work Act 2009).

The Full Bench found that Ms Pascua fell within the definition of “Australian-based employee” under section 35(2)(b). 

However, the Full Bench declined to rule on whether Ms Pascua was “engaged outside Australia” under section 35(3), because that issue had not been argued at first instance.

As a result, Ms Pascua was entitled to pursue her unfair dismissal claim.

The Commission found Ms Pascua had been unfairly dismissed. As reinstatement was not practicable, Ms Pascua was awarded $10,800 (15 weeks’ pay).

 

Key Takeaways for Employers

• Offshore workers engaged by an Australian employer may be covered by the Fair Work Act.
• Where and how the contract is formed may impact whether s.35(3) applies and therefore whether the employee is an Australian based employee.

 

Practical Tips 

Businesses should regularly review their independent contractor agreements and employment agreements to ensure that they protect the business. 

Businesses who rely on offshore workers should review how offshore workers are engaged.

 

Have you reviewed your employment contracts and contractor agreements recently?

 

Pascua v Doessel Group Pty Ltd [2024] FWC 2669
Doessel Group Pty Ltd v Joanna Pascua [2025] FW