Fair Work Ruling: What Aussie Employers Need to Know About Hiring in the Philippines
Australia’s Fair Work Commission (FWC) recently handed down a landmark ruling that could reshape how Australian businesses engage remote workers overseas, particularly in the Philippines.
In , the Commission found that a Filipino remote worker—despite being labeled a “contractor” and working offshore—was in fact an employee under Australian law, entitled to the same rights and protections as any local Australian hire.
ĚýIf you’re an Australian company hiring Filipino talent as independent contractors, this ruling could expose your business to legal claims under the Fair Work Act—even if your team is entirely offshore.
Let’s break down what happened in the Pascua case, what’s at stake for your business, and what you can do now to stay compliant and protect your company:
The Case That Changes Everything
In early 2024, Filipino remote worker Joanna Pascua filed an unfair dismissal claim against her employer, Australian company Doessel Group, after being terminated from her role.
Pascua claimed she had been treated as an employee and was unfairly dismissed without proper notice or due process. In response, Doessel argued that because Pascua was based in the Philippines and hired as an independent contractor, she was not covered by the Fair Work Act—and therefore had no grounds to file the claim.
But the Fair Work Commission (FWC) disagreed
In its , the Commission stated that “the relationship was an employment relationship,” despite the contractor label and offshore location. This decision means Pascua is allowed to proceed with her unfair dismissal case under Australian employment law, exposing Doessel Group to potential liabilities such as back pay, penalties for unfair dismissal, and violations of minimum employment standards.
“The decision confirms the significant risk of ‘wage theft’ and gender pay gap style claims and actions, including class actions, by offshore employees against some Australian business,” Brisbane lawyer Alex Moriarty told the ABC in .
Beyond the immediate legal risks, the case also opens the door to reputational damage and sets a precedent that could impact how other businesses structure offshore hiring.
If you are an Australian company working with remote employees from the Philippines, it would be prudent to review your current contractor arrangements before similar claims arise.
Is Your “Remote Contractor” Actually An Employee?
The FWC didn’t rely on job titles or contract labels. Instead, it looked at how the working relationship actually operated.
Several key factors led to Ms Pascua being classified as an employee:
- Nature of the work: Ms Pascua performed administrative tasks, followed up with clients, and completed ad hoc duties—functions typically integrated into a company’s core operations rather than independent project work.
- Set hours and tools: She was required to work Australian business hours and use company systems like a PBX phone and official email signature—indicating control and integration into the team.
- Below-award pay: Pascua was paid AUD $18/hour, significantly lower than the casual award rate of $30.95 for similar roles.
- Employment-style contract: Despite being labeled a contractor, her contract described pay as a “salary all inclusive as a Full Time Employee,” blurring the lines between employment and contracting.
- No delegation allowed: She could not subcontract or delegate her work—a key indicator of employment rather than independent contracting.
- Supervision and expectations: She was subject to daily supervision, performance targets, and ongoing work expectations, suggesting a structured and controlled working relationship.
These factors show that Pascua functioned much like a regular employee—making her eligible for protections under the Fair Work Act.ĚýĚý
What Does This Mean For Australian Businesses Looking To Hire Offshore?
If you’re engaging offshore workers as “contractors” but treating them like employees, you may be exposing your business to serious legal and financial risks under Australian law.
Here’s what you need to pay close attention to:
Job Classification Matters More Than Labels
Just calling someone a “contractor” doesn’t make it so. If your remote staff:
- Use company systems (email, phones, internal tools)
- Work fixed Australian business hours
- Report to local managers or follow set performance targets
- Can’t delegate their work
- Have ongoing, day-to-day roles rather than project-based deliverables —
—then they may be considered employees under the Fair Work Act, regardless of where they live.
Below-Award Rates Could Strengthen the Case Against You
Paying offshore workers significantly less than Australian award rates may actually support claims that they’re being underpaid employees, not contractors.
In Pascua, the worker was earning $18/hour while the relevant award rate was $30.95/hour for casual employees. That wage gap became a red flag against her employer.
You’re at Risk for Back-Pay and Penalties
If the FWC rules that your contractors are actually employees, your business could face:
- Unpaid minimum wage and entitlements
- Back pay for annual leave, sick leave, and superannuation
- Penalties for unfair dismissal or improper termination
- Fines for sham contracting—if the arrangement was knowingly misclassified
Bottom line: hiring contractors might feel simpler upfront, but if the setup doesn’t hold up legally, it’s your business that pays for it later. What looks like a cost-efficient offshore hire can quickly snowball into legal disputes, back-pay claims, and compliance headaches.
Instead of saving thousands, you risk paying even more because the setup wasn’t done right.
Related: The Hidden Payroll Costs of Hiring In the PhilippinesĚý
What Aussie Businesses Can Do — And Why an EOR Is Your Best Bet
The good news is that you don’t have to choose between risk and complexity. There are legitimate ways to hire offshore talent while staying compliant and protecting your business.
Here are your main options:
Hire directly through your Australian entity
This ensures compliance, but it’s resource-heavy. You’ll need to navigate local tax, labor, and HR requirements across borders—plus maintain payroll and benefits under both Australian and Philippine laws.
Stick with contractor agreements
It may seem easier upfront, but Pascua v Doessel Group proves this approach leaves you legally exposed if the working relationship functions like employment.
Partner with an Employer of Record (EOR)
An EOR acts as the legal employer, handling local compliance, payroll, taxes, and contracts—while you remain in charge of day-to-day work. It’s the simplest way to hire remote staff without the risk or red tape.
What Is an EOR?
An Employer of Record is a third-party provider that legally employs your remote staff in their country of residence. You still manage their workload and day-to-day tasks, but a local EOR provider like 91ĚŇÉ« handles everything related to local labor laws, payroll, taxes, and employee classification.
With an EOR, you get:
- Correct classification from day one – Avoid disputes and stay aligned with both Australian and local labor laws.
- Award-compliant pay and benefits – Your remote team receives fair, legal wages without undercutting award standards.
- Legal protection and HR support – No guesswork or Google rabbit holes—your EOR stays on top of compliance for you.
- Focus on growth, not red tape – Free your team from the burden of managing international employment admin.
In short, an EOR lets you build a remote team without the risk, so you can focus on scaling your business, not fighting legal battles.
How 91ĚŇɫ’s EOR Service Is Built To Support Australian Businesses
If you’re considering the EOR route, it helps to work with a provider who knows both sides of the equation—Australian business needs and Philippine labor laws.
Our EOR service offers the local insight, legal protection, and operational support you won’t find anywhere else.
Here’s why Australian businesses trust us with their remote teams:
Aussie Business Expertise
We’ve worked closely with Australian businesses looking to hire Filipino talent and understand the unique compliance and cultural considerations that come with it. Our team knows how to bridge the gap between Australian expectations and Philippine operations seamlessly.
Deep Local Roots in the Philippines
Unlike global EOR platforms that operate at arm’s length, we’re on the ground in Cebu—deeply embedded in the local business community. We don’t just know the laws—we know the people, the talent market, and the cultural nuances that make a difference. This means faster hiring, smoother onboarding, and real local insight you won’t get from providers with no physical presence here.
Affordable, Flexible, and Fast
With pricing that starts at just over AUD $200/month, we’re one of the most cost-effective EOR solutions in the region—ideal for startups and scaling businesses. You can onboard employees in under 7 business days, with flexible terms for project-based or long-term hires. Plus, you get real support from actual humans—no automated replies, no runarounds.
Workspaces That Work for You
Need a physical space for your team to meet or work together? We offer coworking spaces in prime Cebu and Makati locations, giving your staff the option to collaborate in person while still benefiting from remote flexibility.Ěý
What We Handle
When you hire through our EOR service, we take the guesswork (and grunt work) out of cross-border hiring. Here’s what we manage on your behalf:
- Legal employment contracts that comply with Philippine labor laws
- Tax and government contributions, including SSS, PhilHealth, and Pag-IBIG
- Payroll processing that’s accurate, timely, and compliant
- HR and compliance management, from onboarding to offboarding
With our EOR service, you can build and manage a team in the Philippines without the need to register a local entity. We handle the legal and compliance side as the official employer on record, while you stay in charge of your team’s daily operations. It’s a simple, low-risk way to grow.
Your Next Steps
Whether you’re already working with Filipino contractors or just starting to explore offshore hiring, now is the time to get ahead of compliance risks.
- Audit your current arrangements against the factors highlighted in Pascua v Doessel Group
- Assess your compliance exposure, especially around worker classification, award rates, and legal obligations
- Consider transitioning to EOR protection to stay compliant without the burden of setting up a local entity
The Pascua ruling made it clear that offshore hiring doesn’t exempt you from Australian employment law. If you’re managing remote workers like employees, it’s time to treat the setup with the same care before it turns into a legal liability.
If you’re unsure where your current setup stands—or just want to avoid ending up in a Pascua-style situation—we’re here to help.
Ready to Hire Safely?
We offer a free consultation to help you understand where you stand and what you can do to protect your business. From there, our team can guide you through a seamless onboarding process, with ongoing support every step of the way.
Don’t let misclassification or legal gaps derail your growth. With EOR, you can grow your business and tap into the Philippines’ incredible talent pool—safely, compliantly, and confidently.
Get compliant before it’s too late.
