The legal timeline
How the risk has compounded since 2024
These developments concern different legal questions. Employee status, jurisdiction, any remedy, wage theft and superannuation should not be treated as the same finding.
2024
Pascua: employee status
Pascua v Doessel Group Pty Ltd [2024] FWC 2669
The Fair Work Commission ruled that a Filipino paralegal engaged as an "independent contractor" was in fact an employee entitled to Australian workplace protections. The Commission found that geographic distance, contractual labels, and invoice-based payments do not override the true nature of the working relationship.
Feb 2025
Pascua: Full Bench appeal
Doessel Group Pty Ltd v Pascua [2025] FWCFB 43
A Full Bench upheld the employee finding and the Commission's jurisdiction. This is not an automatic award of minimum wages, superannuation or compensation; entitlement and remedy questions depend on the applicable law and the facts.
1 Jan 2025
Wage theft became a criminal offence
Fair Work Amendment (Closing Loopholes) Act 2023
From 1 January 2025, intentional underpayment can carry criminal consequences where Australian wage theft provisions apply. A classification or jurisdiction finding alone does not establish an intentional underpayment offence.
2025–26
Super obligations increased to 12%
Superannuation Guarantee (Administration) Act 1992, s.12(3)
The superannuation guarantee rate is 12% from 1 July 2025 where the obligation applies. Superannuation has its own coverage rules; a Fair Work employee or jurisdiction finding does not automatically establish super liability for an overseas worker.
Oct 2026
Digo: offshore employment and jurisdiction
Sheena Digo v The Trustee for Bicycles Online Unit Trust t/a BikesOnline Australia (C2025/11633)
Deputy President Boyce found a Philippine-based CPA was an employee despite contractor agreements. She started through Upwork in 2017, worked directly full-time from 2019, and signed agreements in 2024 and 2025. Set hours and priorities, performance reviews, leave approval and timesheet-based invoices supported employment. Her 2025 agreement was made in Australia: the offer was sent from Sydney, acceptance received in Sydney, and NSW law governed it. She had never visited Australia or held an Australian visa. This was a jurisdiction ruling only; whether the dismissal was unfair has not yet been decided.
Offshore location alone does not settle Fair Work coverage. Pascua v Doessel Group (Full Bench, February 2025) and Digo v BikesOnline (reported October 2026) show why the working relationship and its connection to Australia matter. In Digo, the Commission found employment and jurisdiction only; whether the dismissal was unfair has not yet been decided. Get legal advice on your own arrangement.
Self-assessment
Are you at risk?
The Fair Work Commission doesn't look at what your contract says. It looks at how the work is actually performed. If any of the following describe your offshore arrangement, you may be exposed.
The contractual label — "contractor", "freelancer", "consultant" — does not determine the outcome.
The actual nature of the working relationship does.
What exposure actually looks like
The liability is compounding every pay cycle
These are possible liabilities where the relevant laws and entitlements apply. Employee status and unfair dismissal jurisdiction do not automatically establish every category; get legal advice on coverage, dates and any remedy.
Back wages
Any gap between what was paid and Australian minimum wage entitlements — potentially across years of engagement.
Leave entitlements
Annual leave, personal leave, and public holidays accrued but not paid across the full period of engagement.
Superannuation
Possible obligations where Australian superannuation law applies. Coverage and historical rates must be assessed separately from Fair Work jurisdiction.
Unfair dismissal compensation
An offshore worker may be able to pursue an unfair dismissal claim if jurisdiction and eligibility are established. A jurisdiction ruling does not decide the merits or award compensation.
Criminal exposure
Intentional underpayment now carries the risk of criminal prosecution under the Closing Loopholes Act — fines and potential imprisonment.
"When the original Pascua ruling came down in 2024, a lot of business owners shrugged it off as an edge case. It wasn't." Pascua's Full Bench appeal and Digo's jurisdiction ruling show why offshore engagements need review. Neither jurisdiction alone nor a contractor label determines every entitlement or remedy.
— Julius Schoenfeld, Co-Founder, Team Up Now
The solution
An Employer of Record structure significantly reduces exposure
Under a properly structured EOR model, a Philippine-registered entity becomes the legal employer. This removes the direct employment relationship with your Australian business and significantly reduces exposure; it is not a guarantee against every possible claim.
A Philippine-registered entity becomes the legal employer
The worker is employed by a registered Philippine entity rather than directly by your Australian business. A properly structured EOR removes the direct employment relationship and significantly reduces exposure; the full arrangement still matters.
Full Philippine labour law compliance is handled
SSS, PhilHealth, Pag-IBIG, 13th month pay, tax, and all statutory benefits are managed by the EOR entity. Your team member is employed correctly under Philippine law.
You retain full operational control
You direct the work, set the hours, manage performance, and run the relationship exactly as before. The EOR structure changes the legal layer — not your day-to-day working relationship.
Still 50–70% cheaper than an Australian hire
A properly structured EOR can retain the cost advantage of offshore staffing while significantly reducing direct employment exposure. Use the calculator for role-specific costs.
How Team Up Now works
Recruitment and compliance in one service
Most businesses have to source a staffing agency separately from an EOR provider. Team Up Now does both — removing the coordination overhead and ensuring the compliance structure is built in from day one.
End-to-end recruitment
Role scoping, candidate search, multi-stage vetting, skills assessment, and structured shortlisting — across any function in your business.
EOR employment structure included
Your team member is employed by our Philippine-registered entity from day one. SSS, PhilHealth, Pag-IBIG, 13th month pay, tax, and payroll are handled entirely on your behalf.
Australia's first lifetime replacement guarantee
If your team member ever leaves — for any reason, at any point — we replace them at no additional placement cost. Billing is paused during the gap. No time limits. No small print.
Placement fee
$2,000
AUD · one-time per hire
EOR fee
$300
AUD · per month per team member
Versus equivalent AU hire
50–70%
cheaper, fully compliant
Common questions
Does the label on the contract matter?
The label is not conclusive. Pascua and Digo show why a contractor agreement does not settle employee status: the applicable legal test, contractual terms and how the relationship operates all matter. In Digo, the ruling settled jurisdiction only, not whether the dismissal was unfair.
I've been doing this for years — am I retrospectively exposed?
Past civil liabilities may need review, depending on coverage, entitlements and time limits. The criminal wage theft provisions commenced on 1 January 2025 and require their own legal assessment; they do not automatically criminalise earlier conduct or every classification error. A jurisdiction ruling alone does not establish an underpayment offence.
What if the worker is based in a country other than the Philippines?
Pascua and Digo concerned Philippine-based workers, but location alone does not determine Fair Work coverage. The relationship, contract formation and statutory jurisdiction rules matter. Digo decided jurisdiction only, not whether the dismissal was unfair; get advice specific to your arrangement.
Is an EOR expensive?
Team Up Now's EOR fee is AUD $300 per month per team member, separate from salary and statutory contributions. A properly structured EOR significantly reduces direct employment exposure; use our calculator for a role-specific cost breakdown.
Can I still manage and direct the worker's day-to-day work under an EOR?
Yes. The EOR structure changes the legal employment relationship — not your operational control. You direct the work, set priorities, and manage performance exactly as before.
Get your offshore arrangement reviewed
Book a free 30-minute call. We'll walk through your current arrangement, explain exactly what's changed, and show you what a compliant structure looks like for your business.
No commitment required · East Melbourne, VIC · Filipino talent specialists