Fair Work ruling: Offshore hiring risks and compliance

By Michelle Fiegehen, Yempo CEO

Fair Work Ruling: New Risks for Offshore Hiring in the Philippines

A landmark decision by Australia’s Fair Work Commission is a warning for firms hiring offshore workers and remote employees without a professional organization as Employer of Record.

In Pascua v Doessel Group Pty Ltd [2024] FWC 2669, the Fair Work Commission confirmed what many Australian employers aren’t yet fully grasping: Just because a worker is offshore doesn’t mean you can sidestep Australia’s workplace laws. Ms. Joanna Pascua worked from the Philippines as a paralegal for an Australian firm. Although labeled an “independent contractor,” she was paid hourly, received direct supervision, used company tools, and worked core business hours. The Commission ruled she was an employee (albeit a remote employee) and dismissed the idea that she was a contractor.

This isn’t a legal anomaly. A recent ABC report underscores the implications: offshore workers can now bring class-action-style claims, wage-back claims, and unfair dismissal cases against Australian employers-even if they’re thousands of kilometers away.

Australian Businesses: New Offshore Hiring Risks

1. Misclassification risk labeling someone a contractor isn’t enough. The Fair Work Act now looks at the real working relationship: control, integration, hours, supervision. If it looks like an employer-employee relationship, the law must be followed.

2. Back-pay and penalties Employers might face demands for minimum wage (e.g., $24.87/hr) plus superannuation, leave entitlements, and potential penalties for breaching the Act.

3. Legal exposure. Remote employees can claim unfair dismissal, anti‑bullying protection, discrimination relief-all from abroad.

Navigating Fair Work: Your Compliance Solution

The safest path has always been to engage offshore staff through a fully compliant Employer of Record (EOR) in the Philippines – a firm that understands local labour laws, handles payroll, benefits, statutory entitlements, and compliance oversight. With a fully compliant offshore partner, there is no obligation or claim under Australian law.

Why Yempo: Your Trusted EOR Partner

1. Local legal compliance. Yempo operates as the registered Philippine employer-handling statutory benefits like 13th-month pay, social security, PhilHealth, Pag-IBIG, paid leave, and tax filings. We employ offshore accounting and offshore IT talent that’s then dedicated to your business.

2. Aligned with Australian standards. Yempo’s hiring agreements mirror Australian expectations around job scope, supervision models, KPIs, and governance frameworks that minimise misclassification risk.

3. All‑inclusive payroll and HR support. From salary payments, tax remittance, contracts, onboarding, to termination – Yempo handles the entire employment lifecycle.

4. Peace of mind for employers. You engage talent as if they were your own remote employee in terms of supervision and performance, while Yempo ensures the legal and administrative side is bulletproof.

5. Scalability and flexibility. Whether you’re piloting one bookkeeper or building a full offshore IT team, Yempo lets you scale quickly without triggering employment law risk.

Secure Your Offshore Team: Partner with Yempo

The Pascua decision is a legal wake‑up call: Australian firms hiring offshore staff directly are walking into a storm of potential liabilities – unfair dismissal claims, wage recovery claims, and penalties. The solution isn’t to try more labels or clever contracts – it’s to partner with a trusted Employer of Record like Yempo Solutions.

Yempo lets you leverage the cost and skill benefits of Filipino talent, while meeting both Philippine legal obligations and protecting your company under Australian employment laws.

If you’re serious about compliance, risk management, and building a team in the Philippines, you need more than an ordinary contractor arrangement – you need Yempo.

Partner with Yempo for Success

If your current outsourcing provider struggles to deliver loyal, qualified talent, it’s time to switch to Yempo. Our proven track record, client testimonials, and employee-focused approach make us the ideal partner for outsourcing to the Philippines.

Book a quick chat with us today, to know more about our best practices in providing offshore accounting and IT staff from the Philippines – or shoot us an email at [email protected]. We are happy to answer your questions!