Australian businesses expanding overseas or outsourcing work must consider whether the Fair Work Act 2009 (Cth) (FW Act) still applies to their employees abroad. The answer depends on two key factors:
1. Where the employee was engaged; and
2. Where they perform their duties.
When is an Employee Engaged Outside Australia?
If an employment contract is finalised in Australia—such as via email from an Australian employer—the employee is considered engaged inside Australia, meaning the FW Act applies. However, if the entire hiring process, including contract formation, occurs outside Australia, the employee is engaged outside Australia and may not be covered.
Where are the duties performed?
Even if an employee is engaged outside Australia, the location of their work is crucial. In a recent case (Singhal v NAB), the Fair Work Commission ruled that an IT professional working entirely in India was not covered by the FW Act, even though his work benefited an Australian company. This confirms that the physical location of work—not where its benefits are realised—determines legal coverage.
For businesses employing staff overseas, understanding these rules is essential to ensure compliance. If you're unsure whether your employees fall under the FW Act, contact the team at People Mosaic at info@peoplemosaic.com.au for further information.
Disclaimer: The information provided in this article is for general informational purposes only and does not constitute legal advice.
