Australian employers should not assume that offshore workers sit outside the reach of Australian employment laws. The Fair Work Act 2009 (Cth) (Act) may apply where an employer is Australian and the worker is an offshore employee.
Following the post-COVID rise in remote working arrangements, Australian employers are increasingly engaging workers across borders. While those arrangements provide access to broader talent pools and operational flexibility, they also involve a complex web between Australian employment laws, foreign employment laws, tax, immigration and work health and safety obligations, to name a few.
The recent Fair Work Commission (Commission) decision in David Sanderson v Brightest Australia Pty Ltd [2026] FWC 1633 (Sanderson) is a timely reminder that Australian workplace laws may apply even where an employee lives and works wholly outside Australia. The decision confirms that employers should not assume offshore work means offshore legal risk.
When does the Fair Work Act apply to overseas employees?
The Act does not apply to every overseas working arrangement. However, certain parts of the Act, including the unfair dismissal regime, can operate extraterritorially where an employee fits the definition of an ‘Australian-based employee’ in relation to an Australian employer.
The starting point is to identify whether the employer is an ‘Australian employer’. This includes trading or financial corporations formed within Australia (i.e. companies) and entities carrying on activities in Australia whose central management and control is located in Australia.
The second question is whether the employee is an ‘Australian-based employee’. This includes an employee whose primary place of work is in Australia, or an employee employed by an Australian employer whether the employee is located in Australia or elsewhere.
However, there is an important exclusion – an employee engaged to work outside Australia will not be an Australian-based employee if the employment relationship commenced outside of Australia. This question focuses on where the contract was formed, rather than where an employee is located for work.
In an electronic contracting environment, that may be the place where acceptance was received, rather than where the employee was located when signing the contract. For Australian employers, this means the onboarding process matters and each case will turn on its own specific facts.
Case study: David Sanderson v Brightest Australia Pty Ltd [2026] FWC 1633
In Sanderson, the employee lived and worked in New Zealand before his employment was terminated and he made an unfair dismissal claim. He had been engaged by Brightest Australia Pty Ltd, an Australian company, in a sales role selling the employer’s products to New Zealand customers. His salary was denominated in New Zealand dollars and, apart from insubstantial or incidental activities, his duties were performed in New Zealand.
The employment contract was issued and returned electronically. The employee signed the employment contract and returned it by email, with the acceptance received by the employer in Victoria. That factual context was central to the Commission’s analysis. The Commission accepted that the employee was engaged to perform duties outside Australia, but found that he was considered an Australian-based employee for the purposes of the Act because the employment contract was formed when acceptance was received by the employer in Victoria.
As the employer was an Australian constitutional corporation, the Commission found that he was entitled to make an unfair dismissal claim, notwithstanding that the employee lived and worked in New Zealand.
Other cross-border implications
Identifying whether an overseas-based worker may be an Australian-based employee under the Act is crucial from a compliance perspective – see our earlier article here about a case where an employer got this wrong, in entering into an independent contracting arrangement with an overseas-based worker.
In addition, employers should consider a range of matters in respect of their cross-border working arrangements, including:
Governing law and jurisdiction clauses are important, but will not necessarily prevent Australian statutory employment claims where the Act otherwise applies.
Overseas work arrangements may trigger Australian and foreign tax obligations, including payroll tax, PAYG withholding, superannuation and foreign tax requirements. Further, there may be foreign tax registration or permanent establishment considerations for employers.
Employers should consider whether employees have lawful work rights in the country from which they perform work, including remote work arrangements.
Australian WHS obligations may continue to apply to overseas workers where there is a sufficient connection to the Australian business. Employers should assess and manage remote work risks, including psychosocial hazards, fatigue, isolation and workers' compensation coverage.
Australian and foreign employment laws may apply concurrently, creating dual compliance obligations.
Treatment of overseas service differs between jurisdictions and can significantly affect employee entitlements and employer liabilities.
In the event of redundancy, employers may need to consider redeployment opportunities within associated entities, which may include overseas entities.[1]
The practical message for Australian employers is simple – plan first, approve second. Before engaging an overseas worker or allowing an Australian employee to work overseas, employers should carefully consider the proposed arrangements and obtain the necessary employment, tax and immigration advice to understand and manage local and Australian legal obligations and risks.
[1] See for example, Alesia Khliustova v Isoton Pty Ltd [2023] FWC 658.
Published
24 August 2026This update does not constitute legal advice and should not be relied upon as such. It is intended only to provide a summary and general overview on matters of interest and it is not intended to be comprehensive. You should seek legal or other professional advice before acting or relying on any of the content.