It’s fair to say Australia has one of the better systems of employee protections and conditions going. This is reflected in several recent efforts by overseas employees to bring unfair dismissal and breach of general protections rights claims. Australian employees are obviously subject to Australian law. But to what extent are employees of Australian companies outside of Australia subject to the protections of the Fair Work Act?
The Fair Work Act (FW Act) applies outside the outer limits of the exclusive economic zone and the continental shelf so far as prescribed by regulation (s.34 FW Act). Regulation 1.15F of the Fair Work Regulations 2009 (Cth) extends the benefit of the National Employment Standards and certain other provisions of the FW Act to Australian employers in relation to their “Australian-based employees”. An “Australian-based employee” is an employee who is employed by an Australian employer (whether the employee is located in Australia or elsewhere) (s.35(2) FW Act). But employees “engaged outside Australia . . . to perform duties outside Australia. . .”. are excluded (s.35(3) FW Act).
For employees of Australian companies working overseas, the issue will hinge on whether the employee was engaged outside Australia. In the recent case of Gautam Parimoo v Lake Resources N.L. [2023] FWC 2543, Mr Parimoo was a US citizen employed by an Australian registered company to work in Argentina. The Fair Work Commission (FWC) held that Mr Parimoo could pursue his Fair Work Act general protections claim. This was because the effect of electronic transactions legislation and case law on the place of formation of a contract was that returning a signed contract to the employer in Australia meant that he was not engaged outside Australia.
A similar situation arose in the case of Ms Joanna Pascua v [2024] FWC 2669. The FWC was satisfied that a person employed by an Australian company in the Philippines (who was not an Australian resident and had never been to Australia) was still able to bring a Fair Work Act unfair dismissal claim. Unfortunately, the legal point was not challenged by the employer and the issue was not considered on appeal. In Amit Singhal v National Australia Bank Limited [2024] FWC 2675, Mr S was employed by a wholly owned subsidiary of the NAB in India. However, his contract was formed and executed outside Australia and the work was carried out exclusively in India. Accordingly, he was not subject to Australian employment law. It did not matter that the work was for the benefit of NAB in Australia.
The position awaits confirmation by a FWC Full Bench. For the moment however, employers (whether Australian companies or overseas subsidiaries) who do not wish to be subject to the Fair Work Act should ensure that employment contracts are not dispatched from or returned to Australia and should be made subject to the domestic law of the place the work is being carried out. On the other hand, employees who are transferred or seconded to work overseas should be careful to ensure they remain employed by the Australian entity, contract documents are sent from and returned to Australian and their contractual employment remains subject to Australian law. This principle of overseas employees being subject to Australian employment law extends beyond the ability to bring unfair dismissal and breach of general protections applications. It also applies to minimum employment entitlements for minimum wages and leave and also coverage by Australian industrial awards.
An exception exists in relation to long service leave which, whilst the subject of a National Employment Standard, is practically still governed by state legislation. The position varies between the states, but the entitlement of overseas employees to long service leave in Queensland was recently clarified in Fox v Infosys Technologies Ltd [2024] QIRC 109, a decision of the Full Bench of the Queensland Industrial Relations Commission. That case clarified that an employee’s service did not have to have a substantial connection with Queensland for long service leave purposes under the Industrial Relations Act and all that is required is “service . . . partly in the State”. There, the employment contract was entered into in India but 18 days service in Queensland was sufficient to give the employee an entitlement to long service leave. The Full Bench acknowledged that service might be so fleeting that this requirement was not satisfied but that would depend on the particular case. The situation is different in other states and individual advice should be obtained if necessary.
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