Overseas employment – does Australian law apply?


Overseas employment – does Australian law apply?

WorkplaceInfo has received a number of enquiries on the coverage of the Fair Work Act (FWAct) with respect to employees working outside Australia, including work in Australian territories.


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WorkplaceInfo has received a number of enquiries on the coverage of the Fair Work Act (FWAct) with respect to employees working outside Australia, including work in Australian territories.

An employer might assume that once an employee no longer works in Australia, or off the mainland of Australia, Australian law will no longer apply. However, this is not necessarily the case. In fact, the Fair Work Act and the Fair Work Regulation apply to not only employees within Australia but also in certain circumstances to overseas-based employees of Australian employers. 

Does Australian employment law apply overseas?
The FWAct applies to an Australian employer and an ‘Australian employee’, which are defined by the Act to mean as follows:

‘Australian employer’
The FWAct applies to an Australian employer. The FWAct (s35) defines an Australian employer to include:
  • is a trading corporation formed within the limits of the Commonwealth (within the meaning of paragraph 51(xx) of the Constitution); or
  • is a financial corporation formed within the limits of the Commonwealth (within the meaning of paragraph 51(xx) of the Constitution); or
  • is a Commonwealth authority; or
  • is a body corporate incorporated in a Territory; or 
  • operates in Australia, in the exclusive economic zone or in the waters above the continental shelf an activity (whether of a commercial, governmental or other nature), and whose central management and control is in Australia.

For example, this definition could extend to an Australian employer that operates through an overseas branch office. It should be noted that an overseas-based employee may also be subject to local employment laws in the country where the duties are being performed.

‘Australian employee’

The FWAct (35) defines an Australian-based employee as an employee:

(a) whose primary place of work is in Australia; or 
(b) who is employed by an Australian employer (whether the employee is located in Australia or elsewhere); or 
(c) who is prescribed by the regulations.

(3) However, paragraph (2)(b) does not apply to an employee who is engaged outside Australia and the external Territories to perform duties outside Australia and the external Territories.  

This means the FWAct may apply to an employee whose primary place of work is not Australia, provided  they are employed by an Australian employer. An exception is that the relevant parts of the FWAct will not apply where an employee is engaged outside Australia to perform duties outside Australia. 

Meaning of ‘engaged’ outside Australia 

As mentioned previously, the FWAct does not apply to an employee ‘engaged outside of Australia’. There is conjecture about the meaning of the term ‘engaged’ in this context. Does the meaning of engaged in this situation only extend to when the employee was initially engaged, or to engagement of the employee in an ongoing basis? A number of factors may be taken into account by a court or tribunal when determining whether an employee has been engaged outside of Australia, including:  

  • was the employee recruited outside of Australia
  • is the employee employed under local terms and conditions of employment rather than receiving expatriate benefits, and
  • did the employee receive relocation assistance at the commencement of employment.  
This has been considered as a jurisdictional point by the FWC in unfair dismissal and general protections matters. (See below)

Exclusive economic zone/Australian territories 
While it is presumed the FWAct applies to employment on the Australian mainland, the definition under the FWAct also applies to employees and employers operating in Australia’s exclusive economic zone and the waters above the continental shelf. The Act extends to any Australian ship and any fixed platform in these zones, as well as any ship that is operated or chartered by an Australian employer and uses Australia as a base that supplies, services or otherwise operates to and from an Australian port. ‘Australia’ also includes Christmas Island and Cocos (Keeling) Island, and the Australian Antarctic Territory. 
The definition of “continental shelf” under the FWAct has the meaning given by the Schedule to the Seas and Submerged Lands Act 1973 [Cth]. The Schedule sets out relevant parts of the United Nations Convention on the Law of the Sea (Montego Bay, 10 December 1982). Article 76 of the Convention defines the continental shelf of a coastal state to mean the sea-bed and subsoil of the submarine areas that extend beyond the territorial sea throughout the natural prolongation of its land territory to the outer edge of the continental margin, or (where the outer edge of the continental margin does not extend up to that distance), to a distance of 200 nautical miles from the territorial sea baseline.

Long service leave legislation 
A possible occurrence in the workplace is where an employee works overseas during the course of their employment and accrues sufficient total service to be entitled to long service leave. In each case, the court or tribunal will determine whether there has been a “substantial connection” with the state or territory legislation. Case law has determined that the employer should apply the legislation in the State or Territory when the employee takes long service leave, or when a termination of employment occurs. The jurisdiction where the majority of service occurred is not relevant. The same principle should be applied where the employee has performed service with the employer in another state or territory during the course of their employment. See International Computers (Australia) Pty Ltd v Weaving (1981) AR (NSW) 547; Australian Timken Pty Ltd v Stone (1971) AR (NSW) 246.

Unfair dismissal

 An employee dismissed overseas could claim unfair dismissal if he or she could prove there was a substantial connection between the employee’s work and Australia. In making a claim of unfair dismissal, overseas service with the employer counts as service for the purpose of serving the minimum period of employment – thus gaining jurisdiction with respect to the unfair dismissal laws under the FWAct. In a matter before FWA, the applicant commenced work with the employer in Pakistan before travelling some time later to commence work in Australia under a 457 visa with the employer. FWA determined that the work performed in Pakistan counted as service for the purpose of the minimum period of employment, consequently, the application for unfair dismissal could be heard. See Ali v Industries Services Training Pty Ltd [2011] FWA 9177.

General protections claim
In a general protections application, the FWC determined that it had jurisdiction to hear an application from a person dismissed after making a complaint to the employer about their job and who was employed to work in Nauru. The respondent argued the person was outside the jurisdiction of the Fair Work Act because the person was employed to perform work outside of Australia. The applicant was originally engaged in Australia to perform work overseas. The tribunal determined there was substantial connection between the applicant’s work and Australia. The applicant maintained residence in Australia while undertaking work in Nauru. See M v Salvation Army (NSW) Property Trust as Trustee for the Social Work [2013] FWC 3337

Offer of redeployment overseas – redundancy?

In general, overseas redeployment will not be a reasonable option for employers in redundancy situations. In determining whether redeployment is a reasonable option in an unfair dismissal matter, the FWC would be influenced by its cost to the employer in each case. Other relevant factors would include comparisons of employment terms and conditions, remuneration, seniority, job security, career pathways, preservation of service entitlements, inconveniences, distance between home and work, workplace health and safety risks, impact on family responsibilities and impact on the contract of employment. For example, moving to a lower-paid job would not generally be ‘redeployment’, even if the employee requested the transfer.

Case law

In a matter heard before the FWC, the applicant argued that he could have been redeployed in an overseas branch of the company, rather than being made redundant. The FWC held that the employee could not reasonably expect that such a redeployment  would occur. Apart from the fact that similar adverse business conditions were affecting the overseas branches, the employer had never indicated it had the facility to redeploy redundant employees overseas. It did have a history of allowing employees to apply for overseas positions and, if successful, resign from their Australian jobs (instead of being retrenched) and transfer overseas at their own expense. There was no evidence that the multinational corporation had central policies that governed overseas transfers; each subsidiary made its own recruitment and transfer arrangements. See R v SNC-Lavalin Australia Pty Ltd [2013] FWC 7309.
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