Why Pascua v Doessel Group Pty Ltd Changes Everything for Australian Accounting Firms
However, a recent Fair Work Commission (FWC) decision on a particular unfair dismissal case could put the legitimacy of such business practices into question.
Unfair dismissal cases often have little to no implications for the broader business landscape. However, in the case of Ms. Joanna Pascua v Doessel Group Pty Ltd, the verdict could throw established outsourcing practices into shambles.
Examining the Facts of the Case
You might be wondering, what does a routine Fair Work unfair dismissal complaint have to do with me?
Well, this case has the potential to set a precedent on whether overseas remote workers can be considered full-time employees—therefore subject to Australian labour laws and wage standards—rather than just independent contractors, which is what most businesses categorise their remote staff as.
The differences between employment and independent contracting have far-reaching implications on how you might want to approach outsourcing.
Before discussing how this affects you and how to protect your business, let’s examine the facts of the case first. Here’s what we know:
21 July 2022 — Joanna Pascua, a remote worker based in the Philippines, starts working as a paralegal for MyCRA Lawyers, a firm specialising in credit repair services in Australia and a related entity to Doessel Group.
20 March 2024 — MyCRA Lawyers terminated Ms. Pascua’s contract on the basis that she unlawfully copied company files into a personal drive.
Alleging that she was unfairly dismissed, Ms. Pascua brought the matter to the Fair Work Commission and sought an unfair dismissal remedy under the Fair Work Act 2009.
Doessel Group moved to dismiss the case on the grounds that Ms. Pascua could not have been unfairly dismissed because she was only an independent contractor, not an employee.
26 September 2024 — The commission grants Ms. Pascua’s application for an unfair dismissal remedy, effectively rejecting Doessel Group’s objections. This means the case is allowed to progress.
Examining the Decision
In the commission’s written decision, Deputy President Levin determined the legal relationship between Ms. Pascua and MyCRA Lawyers as employment rather than contractual. This determination served as the basis to grant Ms. Pascua’s unfair dismissal remedy application.
Here’s a breakdown of the factors that led to the determination of both parties’ legal relationship:
- Mention of employment across the contract — Although the heading of the contract Ms. Pascua and Doessel Group entered into was “Independent Contractor’s Agreement,” this does not determine the legal relationship of both parties according to the Fair Work Commission.
In fact, some areas of the contract refer to Ms. Pascua as an employee and describe the relationship as employment.
- Contractual obligations — The FWC also evaluated both parties’ contractual obligations to determine the nature of their legal relationship.
This led to the determination that some tasks stipulated in the contract were consistent with common characteristics of an employee-employer relationship, while some were more ambiguous since they could be performed by either an employee or an independent contractor.
- Key Performance Indicators (KPIs) — In the contract, Ms. Pascua was expected to complete a minimum of 20 tasks or 4 hours of billable work per day. Doessel Group argued that this meant Ms. Pascua was free to work for other companies once she met her daily targets, substantiating her status as a contract worker rather than an employee.
However, the commission disagreed, noting that these targets were only a part of a broader set of performance goals and responsibilities stipulated in the contract, including tasks that could extend over multiple days, suggesting an employee-employer relationship.
- Right of Control — The Fair Work Commission drew parallels to Ms. Pascua’s contract and a 2022 High Court ruling (CFMMEU v Personnel Contracting), which posits that an employee’s agreement to follow daily directions implies subordination to the employer’s control.
According to FWC, Ms. Pascua’s contract required work that was subordinate to MyCRA Lawyers’ business, including the use of a company PBX phone account and an email address with the company’s domain. This indicated that she was acting as an employee rather than running her own independent business.
- Low remuneration — According to the Fair Work Commission decision, the contract’s low hourly rate of $18 per hour, which is below the minimum rate for employees doing similar work, indicates Ms. Pascua was not hired for specialised expertise.
In contrast, independent contractors usually receive higher pay than employees for the same tasks. This suggests that Ms. Pascua was being paid as a regular employee performing directed work rather than as a contractor offering specialist services.
What Does This Mean for Your Firm or Business?
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A Decade of Lessons: Decoding the Accounting Talent Crisis
Not only is hiring remote workers from other countries a practical business strategy, but in many ways, it’s also altruistic. You’re essentially providing overseas professionals from economically challenged countries with better earning opportunities than they would otherwise get working for a local employer.
Luckily, there’s a way for you to continue enjoying the expertise and services of overseas remote professionals without putting your firm at risk of potential legal repercussions.
Shield Your Firm from Unfair Dismissal Cases
Rather than hiring remote workers directly, the safest way to tap into the global talent market is through established, trusted, and reputable outsourcing service providers like TOA Global.
How do global talent providers like TOA shield you from unfair dismissal cases?
Without getting too technical and to avoid getting lost in legal jargon, let’s simplify the concept of TOA’s accounting outsourcing services.
TOA Global is a registered company in the Philippines that is subject to Philippine corporate and labour laws. That means our army of 4,100+ outsourced professionals spread across five office locations in the Philippines are employees of a Filipino entity.
When you tap into our global talent pool of elite accountants, bookkeepers, and executive or administrative assistants, you’re essentially recruiting our staffing services rather than hiring an overseas independent contractor directly. In simple terms, you’re in business with TOA Global, not the person you’re bringing into your team.