When Australian companies expand internationally or hire workers based overseas, it is important to understand whether the Fair Work Act 2009 (Cth) ('FWA') still applies to those employees. The answer depends on two main factors:
- Where the employee was hired
- Where the employee actually performs their work
When is an employee considered engaged in Australia?
If a job offer is made and accepted while the employee is in Australia, the FWA generally applies. This includes situations where the contract is finalised over email or phone from Australia. Even if the employee later relocates overseas, the original engagement location matters.
On the other hand, if the entire hiring process happens outside Australia (meaning the offer, acceptance, and contract formation all occur overseas), the employee is usually considered engaged outside Australia. In that case, the FWA may not apply, even if the employer is an Australian company.
Where is the work actually performed?
The location where the work is carried out is just as important. In the case of Singhal v NAB, the Fair Work Commission found that an employee based entirely in India was not covered by the Fair Work Act. Although he worked for an Australian company and supported its operations, his duties were performed outside the country. The Commission confirmed that it's the location of the work, not where the employer is based or where the results are used, that determines legal coverage.
What about associated entities?
Australian employers must also consider whether the overseas company is part of the same corporate group. Under section 50AAA of the Corporations Act 2001 (Cth), companies are considered associated entities if one controls or has significant influence over the other. This matters because employers must consider redeployment options across all associated entities when making a role redundant. That includes overseas offices or subsidiaries. So even if an employee works in another country, the employer may still have legal obligations toward them under Australian law, especially in redundancy situations.
In summary
Whether the FWA applies to an overseas employee depends on where the employment relationship began and where the work is performed. If you're hiring or managing staff overseas, it's worth reviewing your contracts, understanding your obligations across entities, and seeking advice to ensure compliance.
Disclaimer: The information provided in this article is for general informational purposes only and does not constitute legal advice.
