The extension to Australia’s Fair Work Act signals a pivotal change to remote work

In a landmark decision, Australia’s Fair Work Act has been extended to overseas contractors following two incidents of controversial dismissals of remote employees by Australian businesses. Last month, claims were accepted on behalf of a Filipino Legal Assistant and a Bosnian Software Engineer. In both cases, surprisingly, the Fair Work Commission agreed not only to hear the cases, but also found in favor of these workers being classified as employees rather than independent contractors.

The decision signifies a pivotal shift in employment rights for overseas contractors - and the companies that employ them - at a global scale.

Details about the cases

Contrary to her contract, upon further investigation, the Fair Work Act ruled that the Filipino employee, Pascua, was indeed a full time employee, not an independent contractor because she was hired directly by the Australian firm without an Employer of Record in the Philippines. This means that Pascua has full protection under Australian labor laws, and also must be paid the national minimum wage of AUD$30.95 an hour—something that hadn’t formerly been the case.

Similarly, while the Bosnian employee - Mr Zahirovic - was working exclusively from Indonesia as a digital nomad, the ruling found that he too was actually a full time employee in Australia, and should be protected by the same laws as those who are permanently employed there.

What this means for businesses

These rulings are a warning to global employers hiring outsourced talent online without the proper support or regulation and compliance measures in place. In the above cases, the companies got in touch with the contractors directly, which left them exposed to claims by either - or both - labor laws.

While international businesses often struggle with finding the right talents, retaining those talents, and complying with a myriad of regulations, it’s clear that this is no longer an excuse to cut corners when hiring remote teams. Thankfully, there’s an all-encompassing solution for any business wanting to reap the benefits of hiring overseas talent while keeping compliant.

How an Employer of Record solves the problem

Partnering with an Employer of Record (EOR) - like us here at Remotify - insulates companies from this issue. EORs act as the local employer and strategic HR partner on the ground to help keep businesses compliant. Alongside this, an EOR will take care of contracts, payroll and all the administrative heavy lifting to ensure employers have happy employees who produce better results, no matter where they are in the world. Similarly, for contractors hoping to work globally, an EOR acts as their legal protection against unfair dismissals, poor working environments, and generally unfair treatment. In short: an EOR works for both employers and employees, alleviating the burden of compliance issues that - more and more - are going to be called out and dealt with—sometimes severely.

If you’d like to hear more about how Remotify can help you go about hiring outsourced talent the ethical way without losing control of your daily operations, do book a call with a member of our friendly team today. We’d be happy to help you with your transition towards more remote, global ways of working.