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Australian businesses are continuously expanding and establishing global relationships. Hiring workers overseas might make sense for a variety of reasons, whether it’s to access specialised talent not available locally or to retain employees who relocate internationally but continue contributing to your Australian operations.
However, venturing overseas and hiring local workers in other countries introduces additional legal complexities that businesses need to consider carefully.
The Fair Work Act 2009 (‘the Act’) was designed to manage the relationships between employees and employers in Australia. Even if you’re an Australian business hiring overseas workers, there’s a very good chance that the Fair Work Act will still apply to them in certain circumstances.
If you’re hiring overseas, you might consider having a Non-Disclosure Agreement (NDA) in place and ensuring your employment contracts are internationally enforceable. We’ve also written about engaging overseas contractors here, and you may also find our guide on employment contracts for Australian businesses useful.
So, how exactly does all this affect foreign employees in 2025?
Who Is Covered By The Fair Work Act?
The Fair Work Act applies to national system employers. Under section 14 of the Act, a national system employer is defined as a constitutional corporation, insofar as it employs (or usually employs) an individual.
A constitutional corporation includes:
- A financial or trading corporation formed in Australia, or
- A foreign corporation (i.e. a company incorporated outside Australia) that conducts substantial business in Australia.
Broadly speaking, this means the Act will apply to most Australian businesses. However, its application can depend on the circumstances of the employment relationship.
While there may be some variations across States and Territories, the Act generally excludes:
- Employees in the public sector; and
- Local government employees.
For a detailed list of exclusions in your State or Territory, check out the Fair Work Commission’s guidance.
Fair Work Ombudsman v Valuair Limited [2014]
| The Fair Work Ombudsman initiated proceedings against Valuair Limited, a Singaporean company, and Tour East Ltd (TET), a Thai company. These companies employed cabin crew to work for Jetstar (an Australian company) on flights from Thailand and Singapore into Australia. The Fair Work Ombudsman argued that Australian employment laws – namely the Fair Work Act and the Australian Aircraft Cabin Crew Award 2010 – applied to these employees. However, the Federal Court determined that neither applied, as the crew were overseas-based and only occasionally operated within Australia. Justice Buchanan clarified that “those internal flights were part of Jetstar’s international network rather than its domestic network, and the crew were international rather than domestic flight or cabin crew.” |
It is important to note the outcome of this case, where the Federal Court determined:
- That a constitutional corporation must have an appropriate and sufficient connection with Australia to be considered a national system employer and thus fall under the Act.
A sufficient connection to Australia is evaluated based on factors such as:
- The background of the corporation (whether it is foreign or Australian),
- The residency of the employees,
- The location where the employment contract is made and the governing law that regulates it, and
- The location where salary payments are processed.
When determining whether an employee is covered by the Act, courts will consider the work performed, as well as the overall employment relationship.
Therefore, it is essential that your employment contracts are clearly “in and of Australia” to activate the Act effectively.
Can The Fair Work Act Apply To Employees Overseas?
In short, yes.
Of course, the applicability depends on your specific situation, the nature of the employment relationship, and its purpose. Based on the Valuair case, if the employment relationship has a sufficient connection to Australia and is “in and of Australia,” then even overseas employees will be covered by the Act.
Section 35(2) of the Act provides that an ‘Australian-based employee’ is one employed by an Australian employer, regardless of whether the employee is physically located in Australia or overseas for work assignments. In essence, the location of the employee is less significant than the employer’s connection to Australia and the contractual relationship established for work within Australia.
If employees are covered by the Act, the National Employment Standards (NES) automatically apply. The 10 minimum entitlements under the NES include:
- Maximum weekly hours
- Requests for flexible working arrangements
- Parental leave and related entitlements
- Annual leave
- Personal/carer’s leave, compassionate leave and unpaid family and domestic violence leave
- Community service leave
- Long service leave
- Public holidays
- Notice of termination and redundancy pay
- Fair Work Information Statement
If a company’s connection with Australia is appropriate and sufficient, both the Act and the NES will apply to its employees.
Local Laws In Other Countries
Despite the overarching reach of the Fair Work Act, when hiring overseas employees, it is crucial for employers to consider the local employment laws and regulations applicable in the employee’s country of residence. This may involve compliance with local minimum wage laws, working conditions, and statutory benefits, which can differ significantly from Australian standards. For further insights on international employment issues, you might also want to read our article on legal aspects of starting a small business.
Moreover, as remote and hybrid working arrangements have become increasingly common in 2025, it is vital to review and update your employment contracts and policies regularly. Ensuring these documents reflect both Australian laws and the evolving requirements of the international workforce is essential. For guidance on contract clarity and dispute resolution, consider our international contract drafting service and our resources on workplace policies.
Governing Law And Jurisdiction
The governing law and jurisdiction clauses are essential components of contracts formed with overseas employees. The governing law clause specifies which country’s laws will govern the contract, while the jurisdiction clause determines where any legal disputes will be resolved. Clear phrasing in these areas ensures that both parties are fully aware of their legal rights and obligations should any issues arise.
Need Help?
Hiring overseas employees can be overwhelming, with numerous legal aspects to consider across multiple jurisdictions. Whether you need to ensure compliance with the Fair Work Act for overseas-based roles or navigate the complexities of international employment contracts, having the right legal support is vital.
If you’re not sure whether your employees fall under the Act or if you plan to hire overseas talent, get in touch with us. Our team is on hand to provide expert advice and ensure your employment contracts are robust and compliant with all relevant laws. You can reach us at 1800 730 617 or team@sprintlaw.com.au for a free, no-obligation chat. For additional guidance, check our resource on starting a business in Australia to understand the broader legal framework that may impact your operations.
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