In an increasingly interconnected world, businesses often expand their operations across borders and subsequently need to navigate diverse legal landscapes, especially in matters concerning employment and labour laws. For companies with international interests, comprehending the implications of the Fair Work Act 2009 (Cth) (“FWA”) abroad is paramount to ensuring compliance with workplace laws and fostering positive workplace environments.
The Fair Work Act in an International Context
The FWA is the primary legislation regulating employment relationships within Australia and, for Australian companies venturing overseas or foreign entities operating in Australia, understanding how this legislation aligns or contrasts with international labour laws is essential.
Two essential terms defined in section 35 of the FWA – Australian Employer and Australian-based Employee – are vital in understanding the application of the FWA outside of Australia.
Australian Employer
The FWA defines an Australian Employer as an entity operating within the Commonwealth's limits, including companies formed within Australia, the Commonwealth itself, certain entities incorporated in Territories, or those conducting activities within Australia's economic zone, with primary decision-making occurring in Australia.
Australian-based Employee
The FWA defines an Australian-based Employee as an individual predominantly working in Australia, employed by an Australian employer or an individual prescribed by the regulations. This definition does not extend to employees engaged outside of Australia to perform duties outside of Australia.
Recent developments
In the recent case of Gautam Parimoo v Lake Resources N.L. [2023] FWC 2543, the Applicant filed a general protections application involving dismissal and in response, the Respondent lodged a jurisdictional objection to contest the Applicant's status as an "Australian-based employee" under the FWA.
The Applicant, a citizen of the United States of America, was hired by the Respondent to work as Chief Operating Officer at a lithium mine in Argentina. Meanwhile, the Respondent, a registered Australian public company listed on the Australian Securities Exchange, had its principal office in Sydney, New South Wales, Australia.
The Applicant accepted the Respondent’s offer of employment via an email sent from overseas. Notably, the employment contract explicitly stated that it would be governed and construed in accordance with the laws of New South Wales, Australia.
The Fair Work Commission (“FWC”) reviewed established case law to support the proposition that in contracts accepted via email, the place of formation of the contract is the location where the offeror receives acceptance of the contract (Australian Competition and Consumer Commission (ACCC) v Valve Corp (No 3) (2016) 337 ALR 647 at [78]-[82] and Olivaylle Pty Ltd v Flottweg GMBH & Co KGAA (No 4) (2009) 255 ALR 632 at [25]).
Ultimately, the FWC held that the Respondent’s offer of employment to the Applicant was accepted when the Applicant’s acceptance was communicated to the Respondent. This communication was received at the Respondent's registered business address in Sydney, Australia.
Accordingly, it was held that the contract of employment was made in Australia, defining the applicant as an “Australian-based employee” employed by an “Australian employer” under the FWA and consequently, that the general protections application filed by the Applicant was within the jurisdiction of the FWC.
Implications of the decision
The FWC’s decision reflects a significant expansion in the scope of the FWA’s applicability to overseas employees engaged by Australian employers. Despite an employee never performing work in or being based in Australia, the employee may still be entitled to claim protections under the FWA based on how the applicable employment agreement is formed.
This decision broadens the scope of Australian employment laws for overseas employees hired by Australian employers, carrying substantial implications that extend to employment terms including remuneration, leave entitlements, and the potential for legal claims.
It is therefore crucial for business engaging in international operations to understand the FWA’s implications within an international framework in order to comply with all applicable laws and to uphold ethical workplace practices across borders.
In light of this decision, employers should carefully consider its impact on any of their overseas employees, reevaluating whether the FWA applies to employees who they previously assumed to be outside the FWA’s scope. Australian employers operating internationally and considering engaging overseas employees should also reevaluate their recruitment and onboarding approaches in order to avoid unexpected outcomes and mitigate legal risks.
The solicitors at BlackBay Lawyers can provide specialised and detailed advice pertaining to the application of the Fair Work Act 2009 (Cth) for businesses operating across borders. If you are an employer requiring advice on compliance with the Fair Work Act 2009 (Cth) abroad, or an employee requiring clarification on your workplace rights, please feel free to contact BlackBay Lawyers on (02) 9100 0889 or via www.blackbaylawyers.com.au for a confidential discussion with one of our solicitors.
The content in this Article is intended only to provide a summary and general overview on matters of interest. It is not intended to be comprehensive nor does it constitute legal advice. It should not be relied upon as such. You should seek legal or other professional advice before acting or relying on any of the content.
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