Is your offshore contractor legal? What the Pascua ruling means
Chris Raad · 24 June 2026
In 2024 the Fair Work Commission ruled a Philippines-based contractor was, in law, an Australian employee. Here is what changed and the two structures that survive it.
If you hire offshore staff in Australia, one 2024 decision changed the ground under the whole model. It is worth five minutes.
What happened
The Fair Work Commission found that a Philippines-based worker on a full-time contractor agreement with a Queensland firm was, in law, an Australian employee. The label on the contract did not match how the relationship actually ran. The decision stood on review.
Why it matters to you
An employee in law is owed minimum wage, superannuation, leave and protection from unfair dismissal. Get the classification wrong and the exposure, including back pay, sits with the Australian business that directed the work. Most offshore arrangements sold in Australia today are built like the one that lost.
The test in one line
Substance over label. What you call the contract does not decide what it is. Who sets the hours, who controls the work, whose tools are used, and whether the person runs their own business all weigh more than the words on the page.
The two structures that survive
One: an employer of record in the Philippines properly employs the worker, so the contractor question never arises. This is our default. Two: genuine contracting, where the person really runs their own business, with documents from an Australian law firm and your decision recorded on independent advice.
We do not manufacture a second client or hand you a template contract from a recruiter. If a provider offers you either, ask them why. The full plain-English explainer is on the compliance page.