08. Compliance

Hiring offshore without a Fair Work problem. The plain-English version.

What the 2024 rulings changed, what most providers still sell, and the two structures that survive scrutiny.

01.

What happened

In 2024 the Fair Work Commission ruled in Pascua v Doessel Group [2024] FWC 2669that a Philippines-based worker on a full-time “contractor” agreement with a Queensland law firm was, in law, an Australian employee. She worked set hours, used the firm’s systems and answered to the firm. The label on the paper did not match the working reality. The Commission found she could bring an unfair dismissal claim, and the decision stood on review. Most offshore arrangements sold in Australia today are built exactly like the one that lost.

02.

Why it matters to you

If your contractor is an employee in law, the contract does not protect you. You can owe the Australian minimum wage and back pay for the gap between what you paid and what the award required. You can face an unfair dismissal claim when you end the arrangement. Superannuation, leave and payroll tax can follow. The exposure sits with the Australian business that directed the work, not with the offshore worker or the platform that introduced them. It is your name on the claim.

03.

The test in one line

Substance over label. What you call the agreement does not decide what it is. A court looks at how the relationship actually runs: who sets the hours, who controls the work, whose tools are used, and whether the person runs their own business or simply works in yours. Call someone a contractor and treat them like an employee, and the law reads them as an employee. You cannot write your way out of the facts. A well-drafted “contractor” agreement, on its own, protects no one.

04.

Structure one: employer of record

This is our default. Your hire is employed by a licensed employer of record in the Philippines. That entity holds the employment contract, pays statutory benefits and carries the local obligations. You direct the day-to-day work and pay one monthly invoice. Because the worker is properly employed offshore, the Australian contractor question never arises, so there is no Fair Work misclassification exposure for you. Cost is roughly AU$300 to 600 a month on top of salary, invoiced at cost. For most businesses this is the clean answer, and the one we recommend.

05.

Structure two: genuine contracting

Direct contracting can be legitimate when the relationship genuinely is one. The worker runs their own business, sets their own hours, serves other clients and controls how the work is done. If that is real, a contractor arrangement holds. The documents must not come from us. We are a recruiter, not your lawyer, and a contract we handed you would be the exact fact the ruling turned on. So the agreement comes from an Australian law firm, on independent advice, and the decision is recorded as yours. You sign it knowing what it is.

06.

For accounting firms

If you are a registered tax agent, using offshore staff triggers disclosure. The Tax Practitioners Board expects you to tell clients when their work is outsourced, including offshore, and APES 305 carries an equivalent outsourcing-disclosure note for members. This is not a barrier. It is a letter. We provide the client-consent wording you send once, covering who does the work, where, and how their data is handled. Most firms send it, hear nothing back, and carry on. Handled up front, disclosure is a formality, not a risk.

07.

What we will not do

We will not manufacture a second client so a full-time worker looks like a contractor running a business. We will not hand you a template contract from a recruiter and call it protection. We will not give you tax, employment or legal advice we are not licensed to give. Each of these is a corner other providers cut, and each is the corner that fails under scrutiny. If a provider offers you any of them, ask them why. Then ask who carries the liability when it is tested.

General information, not legal advice. Structure reviewed by [law firm name] [PLACEHOLDER].

Next step

Book the call. Bring your current contractor agreement if you have one.

We will tell you which of the two structures fits, what it costs, and where you stand today. Twenty minutes. No deck.

Book a 15-minute call