How to Hire Employees in Australia Who Live Overseas

With Australian workers increasingly working from home, more employers than ever are choosing to hire foreign workers. Reasons for doing so include:

• obtaining talent;

• existing employees relocating abroad; and

• lowering the cost of labour.

Say you are an employer who is thinking about using this strategy. In that case, you must think carefully about your hiring practises for foreign workers. You must make sure you are abiding by all applicable laws, both domestically and abroad. The Fair Work Act of 2009 (Cth) (FWA) and how to comply with it when choosing how to engage workers are both covered in this article. This article also takes into account any potential relevance of local industrial law to the relationship.

Does the Worker Have FWA Coverage?

Whether the FWA covers a worker will determine how you hire them, including whether you treat them as an employee or a contractor. If the FWA applies to them, you must abide by its conditions. You must not adhere to the FWA if the FWA does not apply to them.

The following factors should be taken into account when deciding whether the FWA applies to a worker:

• employer meets the criteria for "Australian employer" under the FWA; and

• according to the FWA, worker is a "Australian-based employee."

An "Australian Employer" is what?

An "Australian employer" is anyone who works for an Australian company, but typically excludes:

• the government sector; and

• employees of the local government, though this varies by state or territory.

The only entities that qualify as "Australian employers" in Western Australia are Pty Ltd companies or other businesses incorporated under the Corporations Act 2001 (Cth).

An "Australian Employee" is what?

A "worker from Australia" is one

• whose main place of employment is in Australia;

• who meets the criteria for a "Australian employer" as stated earlier.

However, and this is very important, "an employee who is engaged outside of Australia [...] to perform duties outside of Australia" is not included in the definition of "Australian employee." It is a question of fact as to whether this exclusion applies to a worker, and a court may take the following factors into account:

Issue	​Explanation
​Did the contract's entry take place inside or outside of Australia?	​What city was the employee in when the contract was signed? For instance, it is more likely that a worker will not be considered a "Australian employee" if they are present in the US when the contract is signed.
Did the employee carry out their tasks from within or outside of Australia?	For instance, it is more likely that an employee would not be considered a "Australian employee" if they were always located in the US. The employee may travel to Australia without actually being a "Australian employee."
Was the employee hired to work inside Australia or outside Australia?	The answer to this query may depend on whether the employee: - constituted a member of an Australian team, and - perform duties practically both inside and outside of Australia. For instance, a worker whose responsibilities include marketing to the Asia-Pacific region may be less likely to fall under the definition of "Australian employee" than a worker whose responsibilities include marketing to Australia. A worker may carry out a portion of their work in Australia while still not being considered a "Australian employee."

If the Overseas Employee is Covered by the FWA

If the FWA is applicable, you must hire the worker as an employee and subject to an employment contract. With a few minor modifications to reflect their place of employment, you might decide to give them the same employment agreement as your Australian-based employees.

You run the risk of violating the FWA's sham contracting rules if you hire a worker as a contractor. These forbid employers from using workers who should be considered employees instead of contractors.

Given that the FWA covers your employees, you should make sure you abide by its provisions as well as those of any applicable modern awards.

For instance, you should take into account employees' rights to:

• a leave of absence, such as an annual, sick, or parental leave;

• minimal pay;

• safeguards against discrimination;

• not being fired in an unfair manner; and

• any severance compensation.

Should the Overseas Employee Not Be Covered by the FWA

You might prefer to hire the employee as a contractor under a contractor agreement if the FWA isn't applicable. This is due to the fact that you do not have to take into account the sham contracting provisions if the FWA does not cover the employee.

Additionally, a contractor agreement is a commercial arrangement, and you are free to choose the commercial terms without taking into account your rights under the FWA. This does not preclude you from providing your staff with benefits that are comparable to those provided by the FWA. Instead, you are free to define these advantages however you like.

*For instance, your contractor agreement might allow for unapproved absences that are comparable to the FWA's leave provisions for employees. But you could provide three weeks each year (instead of four under the FWA).

You have the option to choose to hire the employee under an employment agreement as opposed to a contractor agreement. To prepare an employment agreement that is acceptable in that specific jurisdiction, you should consult with a lawyer about this option.

International Industrial Law

Additionally, it's crucial to keep in mind that workers might be protected by regional labour laws.

*For instance, if a worker is located in the Philippines, they may also be protected by Filipino industrial law in addition to the FWA.

A French employee may also not be covered by the FWA in which case you would hire them as a contractor. If they are located in France, they might have rights under French industrial law for which you might be liable.

In light of this, you ought to consult a local attorney to determine whether the relevant industrial law applies to you. If so, you must make sure you are aware of how to adhere.

Major Points

When choosing how to hire foreign workers, it is essential to ascertain whether the FWA covers a worker. Consider hiring them as employees under an employment agreement if the FWA applies to them. If they are not, it might be more practical to hire them as contractors under a contractor agreement. If you need any assistance navigating the contract or hiring of an overseas worker for your company contact Lite Force now. If you need assistance determining whether an employee is covered by the FWA, contact the Lite Force HR Specialist team and let us help you today.

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Questions and Answers

How do I determine whether a worker is protected by the Fair Work Act?

You should take into account whether the employer is a "Australian employer" as defined in the FWA and the employee is a "Australian-based employee" as defined in the FWA when determining whether a worker is covered by the FWA.

Suppose the Fair Work Act is relevant?

The worker should be hired as an employee pursuant to an employment agreement if the FWA is applicable. With a few minor modifications to reflect their place of employment, you might decide to give them the same employment agreement as your Australian-based employees.

What happens if the Fair Work Act isn't relevant?

You might prefer to hire the employee as a contractor under a contractor agreement if the FWA isn't applicable. This is due to the fact that you are not required to take into account the sham contracting provisions if the employee is not protected by the FWA. Additionally, a contractor agreement is a commercial arrangement, and you are free to choose the commercial terms without taking into account your rights under the FWA.