As a small business owner, I often feel let down by the ‘system’. The decisions made by Government departments, especially those favoring employees, can be frustrating. To date, these decisions have applied specifically to workers located in Australia. However, a recent Fair Work Australia decision may have changed that.

If you employ foreign workers directly, this is a must-read. Why? A recent ruling by Fair Work Australia could open a Pandora’s box. It may change everything about direct foreign employment.

What do I mean by direct employment? If you hire a foreign worker, like one from the Philippines, directly—without using a government-regulated Business Process Outsourcing (BPO) entity—you need to know something important. The worker may now be entitled to the same benefits that Australian workers enjoy.

Fair Work Australia’s recent ruling in favor of a Filipina worker, Ms. Joanna Pascua, brought about this change. She challenged her dismissal and proved that it was unfair. The ruling has added a new layer of complexity to the law.

The key outcomes of this ruling are:

• Pascua has been recognized as a full-time employee instead of an independent contractor, as her contract originally stated.
• Pascua now has the same rights as Australian workers, including protections for minimum wage and working conditions.

This decision/ruling could now be described as a Game Changer!

So, what does this mean in practical terms? It means Australian businesses may have to provide the same employment rights to overseas workers. This includes minimum wages, which, at the time of writing, are $24.10 per hour. In Ms. Pascua’s case, as a paralegal assistant, the average rate would be $41.03 per hour.

Failure to comply with these rights could lead to legal consequences and fines. This could negatively impact operations. Fighting legal battles in court is difficult and costly, whether you win, lose, or draw.

Although Ms. Pascua worked for the Doessel Group Pty Ltd under their own contract, Fair Work Australia found a sufficient connection to Australia in the working relationship. This creates more legal complexities for businesses that employ overseas workers directly. Any Direct Employment contracts must be written to avoid litigation if a worker challenges their arrangements or entitlements.

The Fair Work Australia decision in favor of Ms. Pascua highlights the potential risks and legal implications of employing overseas workers, particularly Filipino workers.

How does Phil Labor eliminate these risks:

• Phil Labor, through our partner company, operates in a way that allows our clients to engage their Virtual Assistants through our Philippines-compliant contracts, completely independent of Australian regulations.
• Phil Labor registers all employee contracts with (DOLE), and we address employee grievances in the Philippines under Philippine law. Our overseas clients are protected from mitigation in other countries under foreign government regulations.
• Phil Labor directly handles all HR, payroll, government benefits, wages, taxes, and other mandatory requirements.
• When you partner with Phil Labor, you can be confident that you have an employment arrangement that meets all Philippine government requirements.

By partnering with Phil Labor, you avoid the risks of ‘direct employment’ and protect your business from a wide range of legal complexities—and we haven’t even touched the tax side of things.

Reference:  Ms Joanna Pascua V Doessel Group Pty Ltd (U2024/3881)