In September 2024, the Fair Work Commission’s (FWC) ruling in Pascua v Doessel Group Pty Ltd showed that remote and outsourced workers can be entitled to Australian workplace protections, regardless of where they’re physically located.
This landmark decision vindicated one Filipino worker while challenging how Australian businesses engage offshore talent, potentially opening the floodgates for similar cases.
Case Background: Fine Line Between Contractor and Employee
Ms. Joanna Pascua worked as a paralegal for Queensland-based Doessel Group Pty Ltd, performing her duties remotely from the Philippines under a contract classifying her as an “independent contractor.”
When Pascua alleged unfair dismissal, Doessel Group objected, arguing that no dismissal could have happened since she wasn’t their employee.
But the FWC, upon examining Pascua’s actual day-to-day working arrangements, determined she was a national system employee, granting her access to unfair dismissal remedy.
Doessel Group sought permission to appeal the September ruling, but the Full Bench upheld the decision in February 2025.
Operational and Compliance Takeaways for Your Practice
Geographic Location ≠ Jurisdiction
The Pascua ruling has shown that overseas workers can be considered Australian employees if their working relationship meets employment criteria.
This means that geographical distance doesn’t absolve businesses and firms from their obligations as legal entities operating and contracting from Australia. They may also inadvertently subject themselves to the regulations of the outsourced professional’s home country.
While time-consuming, businesses must perform proper due diligence and evaluate all applicable laws before outsourcing.
Contract Labels Aren't Definitive
Labeling outsourced talent as “independent contractors” can lead to costly misclassification. When the structure of the working relationship involves a level of control and business integration akin to employment, as in Pascua, contractual labels can mean nothing.
Such misclassification can trigger substantial financial liabilities, including unpaid wages, taxes, and superannuation. This risk has only intensified with the new wage theft law effective January 2025, which subjects employers to fines, jail time, or both for wage underpayments.
Even before the implementation of the wage theft law, the unfair dismissal case raised questions about civil liability for underpayments since Pascua was noted to have received a below-market hourly rate for someone classified as an independent contractor.
Recent coverage of the case also serves as a reminder of changes to the Fair Work Act effective August 2024 (before the ruling was made). The revision now requires courts to examine how contract terms between two parties are performed in practice, not just on paper.
The Case for Responsible Outsourcing
Pascua’s arrangement isn’t unique in the outsourcing industry, making the ruling particularly striking. It’s an urgent prompt for businesses to audit their outsourcing arrangements and consult employment lawyers about specific exposure and obligations.
But Pascua can also be seen as a valid argument against direct-hire outsourcing. To continue filling vacancies amid the ongoing talent crisis, businesses and firms should seriously consider outsourcing through legitimate providers.
Why Partner with Established Outsourcing Providers
While hiring remote workers directly costs less upfront, they potentially create unpredictable liabilities. Reputable (this being the operative word) outsourcing providers help eliminate unfair dismissal compensation risks and compliance penalties that often exceed initial savings.
You also benefit from a clear legal separation: Outsourced staff are the provider’s employees, not yours. This means that the provider takes care of all employment obligations while you receive specialised services.
Finally, established providers bring built-in support systems that enable businesses and firms to grow without needing to manage individual employment relationships. Think training, performance management, and quality assurance. That’s operational excellence made scalable.
The Bottom Line: Risk Management as Business Insurance
The Pascua ruling exemplifies how vulnerable businesses are to non-compliance when hiring remote workers directly. As workloads increase and regulations change, as they frequently do, the layer of support and legal protection that outsourcing providers offer becomes necessary in getting outsourcing right.
Perhaps the real question then isn’t whether you can afford to partner with one, but whether you can afford not to.
As a registered company in the Philippines, TOA Global’s 4,200+ outsourced accounting professionals spread across five office locations are full-time employees covered by the country’s labour and corporate laws.
When you partner with us, you get Australian-trained talent, we take care of compliance. Interested?
