Hiring Offshore Staff Directly? What Australian Businesses Need to Check

Oct – 2026 The hourly rate is only part of the picture.

Hiring offshore talent can be a practical way for Australian businesses to access skills, increase capacity and support growth.

But a recent Fair Work Commission decision involving an offshore accountant is a timely reminder that the structure of an engagement deserves just as much attention as the cost.

A recent case: An accountant who had never visited Australia.

The Fair Work Commission recently rejected a jurisdictional objection brought by BikesOnline Australia in response to an unfair dismissal application from a Philippines-based accountant, Sheena Digo.

Digo had worked remotely for the business for years under contractor arrangements. Despite never having set foot in Australia, the Commission found she was an Australian-based employee for the purpose of the relevant Fair Work Act provisions.

Why?

The Commission considered how the relationship operated in practice, including the business directing her working hours and priorities, performance reviews, leave approvals and payment arrangements.

Although she submitted invoices, the Commission observed that these largely reflected the hours recorded on timesheets.

The location where the agreement was made also mattered. The 2025 agreement was offered from Sydney and accepted electronically in Sydney, and it specified NSW governing law.

The employer’s jurisdictional objection was rejected, allowing the unfair dismissal application to proceed. The Commission has not yet determined whether the dismissal itself was unfair.

The case demonstrates that working overseas does not, by itself, settle whether Australian workplace law may apply.

Another warning: The Doessel Group case

This issue has also arisen in a different industry.

In Doessel Group Pty Ltd v Joanna Pascua [2025] FWCFB 43, the worker was a Philippines-based legal assistant engaged by Doessel Group, which operated the credit-repair business MyCRA Lawyers.

The Fair Work Commission found that an employment relationship existed despite the contractor agreement. The appeal against that finding was unsuccessful, and the worker was later awarded $10,800 in compensation following an unfair dismissal finding.

The cases involve different facts and legal questions. They do not establish that all offshore workers are employees. But they do underline the importance of assessing each engagement properly.

The contract isn’t the whole story

Since 26 August 2024, a whole-of-relationship test has applied under the Fair Work Act to certain constitutionally covered businesses when determining whether a worker is an employee or contractor.

That test considers the real substance, practical reality and true nature of the relationship — including the contract and how the arrangement operates in practice.

The applicable test can differ depending on the business, the period of work and the circumstances. Other laws, including tax and superannuation legislation, may have their own tests.

For business owners, useful questions include:

Who sets the hours? Does the worker genuinely control when and how they deliver the work?

Who approves leave? Is the person managed in much the same way as an employee?

What do the invoices represent? Are they invoices for contracted outcomes, or essentially timesheets for fixed hours?

How integrated is the role? Is the person operating an independent business, or performing an ongoing role under the business’s direction?

No single answer determines the outcome. The entire relationship and the relevant legal test need to be considered.

Don’t overlook the worker’s country

Australian law isn’t the only possible consideration.

Depending on the circumstances, the worker’s country may have employment laws, tax rules, registration requirements or other obligations that apply to the arrangement.

Businesses should also consider confidentiality, intellectual property, privacy, cybersecurity and access to client records or internal systems.

An outsourcing provider may help with administration and local arrangements, but using a provider does not automatically remove every responsibility from the Australian business. It is important to understand what the provider handles and what remains your responsibility.

What would we review first?

If we were reviewing an existing offshore arrangement, we’d start with five questions:

1. Does the contract reflect the way the relationship operates in practice?
2. Has the worker’s status been assessed under the applicable legal test?
3. Have Australian and relevant overseas obligations been checked?
4. Are data security, confidentiality and intellectual property responsibilities clear?
5. Do the costs, risks and benefits of the arrangement still make sense for the business?

If any of these questions raise concerns, seek appropriate legal and tax advice before assuming the current arrangement is suitable.

The bigger picture

Offshore hiring can be valuable. The aim isn’t to discourage Australian businesses from engaging overseas talent; it’s to make sure the decision is informed and the structure is fit for purpose.

The hourly rate may look attractive, but the full cost includes the contracts, administration, compliance and systems needed to make the engagement work.

Don’t just ask what it costs to hire someone. Ask what it takes to engage them properly.

At Palmers Financial Group, we help business owners look at the bigger business and financial picture. Where specialist employment, legal or overseas tax advice is needed, involving the right professional is part of getting the decision right.

If you’re hiring offshore staff directly, or already have people working overseas, it may be worth reviewing your arrangements.

Palmers Financial Group

One Team. Every Financial Decision.

General information only. This article is not legal, tax or financial advice and does not take account of your circumstances. Seek independent professional advice for your situation.