Introduction
A recent case heard by the Fair Work Commission (FWC),[1] raised the question of when the Fair Work Act 2009 (Cth) (FWA) applies overseas.
Contents of the FWA
The FWA applies to Australian employers and “Australian based employees”. By section 35(2) of the FWA, an “Australian-based employee” is an employee whose primary place of work is in Australia or who is employed by an Australian employer (whether the employee is located in Australia or elsewhere).
The FWA excludes from this definition any employee that is “engaged outside Australia and the external territories to perform duties outside Australia and the external territories”.
We can break this down into two elements:
- the place where the employment contract is made; and
- the place where the employee is obliged to perform work under the employment contract.
The Case of Gautam
Context
In Gautam, the Applicant was born in India and is a citizen of the USA. He was approached for the position of Chief Operating Officer with the Respondent, a registered Australian public company which manages several international lithium mines, primarily based in Argentina. The Respondent’s principal registered office was in Canberra, Australia.
The Applicant was approached by a recruiter from Chile and engaged in three online interviews with the Respondent, who attended from Australia.
The employment agreement expressly stated that it was to be constructed and construed in accordance with the laws of New South Wales, despite the Applicant never performing duties within the territory. His duties were to be performed solely in Argentina.
In January 2023, the Applicant was dismissed by the Respondent, effective immediately, with payment in lieu of notice.
In response, the Applicant lodged a general protections claim with the FWC involving dismissal. The Respondent, being his employer, raised a jurisdictional objection, claiming the Applicant was not an “Australian-based employee” and was therefore not entitled to protection under the FWA.
Decision
The issue at hand was whether the Applicant was “engaged outside Australia”.
On this question, the FWC found the Applicant was an “Australian-based employee” and the general protections application therefore fell within the jurisdiction of the FWC.
In reaching this conclusion, the FWC ruled:
- The employer’s employment offer was not accepted until the Applicant’s acceptance was communicated to the employer.
- This was done by the employee emailing the signed copy of the employment contract to the employer, which was received at the registered business address in Canberra.
- The contract of employment was therefore made in Australia, since it came into effect when it was received in Canberra.
Conclusion
With a globalised employment market, it is not uncommon for companies to engage in and employ overseas workers. It is therefore important for employers to understand which of their employees are covered by the FWA and how this may affect their rights and obligations. To obtain advice on how this may apply to you and your employment arrangements, please reach out to Daniel Morgan (daniel@morganenglish.com.au) and the M+E Workplace team.
[1] Gautam Parimoo v Lake Resources N.L (2023) (Gautam).
