Many real estate agency owners are exploring offshore support to help with admin, client follow-ups, or bookkeeping. But what happens when someone working from overseas under a “contractor” agreement claims employee rights?
That’s exactly what happened in a recent legal case (Joanna Pascua v Doessel Group Pty Ltd [2024], Doessel Group Pty Ltd v Joanna Pascua [2025]) and it’s a cautionary tale for anyone thinking their offshore contractor arrangement automatically keeps them clear of employment laws.
In this blog we take a look at this landmark case, the key factors the Fair Work Commission looked at, what they mean for your agency, and practical tips to structure offshore contractor arrangements safely, so you can benefit from remote support without accidentally creating employee entitlements.
Setting the Scene: From Remote Assistant to Unfair Dismissal Claim
What Happened? Ms Pascua was an off-shore legal assistant for a Queensland law firm. On paper, Pascua was engaged under an Independent Contractor’s Agreement.
But tucked inside that very contract was an Employee Non-Disclosure Agreement she also had to sign.
Confusing already, right?
Her day-to-day reality looked a lot like that of an employee.
She followed fixed weekly hours, accessed the firm’s internal systems, took part in regular team meetings, and was presented as a member of the legal team, managing client files and communicating with banks —- all while being paid $18 per hour, up to 8 hours a day, 5 days a week, with weekly invoices for a standard $720, adjusted for any downtime.
Things came to a head in March 2024 when the business accused her of misconduct — specifically copying client information to her personal drive —and promptly terminated her contract.
She denied the allegations, but by then the damage was done.
So, what did she do? Ms Pascua filed for an unfair dismissal remedy, arguing she was, in fact, an employee, not a contractor.
The company pushed back, raising a jurisdictional objection: they claimed she was a contractor under a contract for services, and therefore unfair dismissal laws didn’t apply.
The Result?
This clash over labels, contractor or employee, is exactly what sent the case before the Fair Work Commission, and eventually to appeal.
So let’s take a look at the key factors the FWC looked at.
Factor 1: Integration In the Business
One of the first things looked at was how Ms Pascua was presented to the outside world and her work into the business.
She was provided with a device called a PBX phone unit, which made it appear that she was calling from Australia even though she was in the Philippines.
Her email address carried the firm’s domain name, and her email signature identified her as a paralegal for the firm.
When she started, she was supervised by a senior team member, but within a year she was working independently: drafting correspondence from pro forma documents, modifying them as needed, and even training others on investigative work.
By the last seven months of her role, she was the only person conducting investigations for the firm.
It was held that these arrangements, like her tools, communications, responsibilities, she was functioning as an employee within another business, rather than running her own independent enterprise.
In other words, she wasn’t just doing work for the firm; she was very much working as part of the firm.
Factor 2: Remuneration
On paper, Pascua was a contractor, but the way she was paid told a very different story.
While Pascua’s contract described her as an independent contractor, it also specified an hourly rate of $18 per hour “all inclusive as a Full Time Employee.”
Payment was structured through a pro forma electronic invoicing system.
Each week, she would submit an invoice for up to 40 hours, with any unworked time deducted from the default weekly amount of $720.
On the surface, it looked like a standard invoicing system for a contractor, but the weekly cap, fixed hours, and deductions for downtime closely mirrored the pay structure of an employee rather than a self-employed contractor.
Ms Pascua’s tasks were also not specialist or highly technical: she performed paralegal and investigative duties that fell under the Legal Clerical and Administrative classifications in the Legal Services Award.
The hourly rate she received was well below what a comparable employee would earn under the award, and far below what someone running their own business would typically charge for the same work.
Contractors generally charge higher rates to account for overheads, leave entitlements, and risk – none of which were reflected in her $18 hourly rate.
In short, her pay arrangements with fixed weekly hours, capped payments, an hourly rate below market, and a lack of independence in setting terms or rates strongly suggested she was remunerated as an employee, not as a contractor providing a specialist service.
Factor 3: Control & Meeting KPIs
Another key factor looked at was the level of control the firm had over Pascua’s work.
The contract set out key performance indicators (KPIs), such as completing a minimum of 20 tasks per day or achieving 4 billable hours daily.
The firm argued that these were just daily targets, meaning she was free to work for other businesses at any time.
The FWC didn’t see it that way. These KPIs couldn’t be read in isolation.
They were part of a broader set of expectations, including weekly targets like having 10% of matters removed each week.
Tasks often carried over to the next day, and ad hoc duties could arise at any time, suggesting an ongoing, structured workload.
The requirement to complete tasks within directed timeframes, along with the acceptance of daily instructions, showed a level of control typical of an employment relationship.
It was noted that even if a contract is partly oral or partly written, the way work is directed and carried out can demonstrate the employer’s right of control.
By agreeing to follow day-to-day directions and perform tasks according to the firm’s practices, Pascua’s work was guided by the needs of the firm, like an employees.
Factor 4: What The Contract Really Said
Here’s where things get interesting. On paper, the contract kept repeating that Pascua was an independent contractor.
The contract had section that stated that the agreement didn’t create an employment relationship and that she wasn’t entitled to benefits like leave, workers’ compensation, or social security.
Another section had her warrant and indemnify the company for any errors or issues that might arise while performing her work.
Sounds like a classic contractor arrangement, right? But as courts across Australia have consistently found, labelling someone a contractor doesn’t make it so.
The FWC looked beyond the headings and standard terms to the actual rights, obligations, and duties created by the contract – and the picture told a very different story.
For example, the contract:
- Allowed the company to dictate which “Key Employees” could perform the work. Pascua was required to perform paralegal work personally, could not delegate it, and had to follow daily instructions and supervision. The right to assign work to a particular person is a hallmark of a contractor relationship.
- Had an attached NDA, which repeatedly referred to her as an “employee” and spoke in terms of obligations during and after employment — not contracting.
- Set pay as an hourly “salary” for full-time work, below award rates, and there was no scope for her to run her own business or set her own terms.
In other words, the contract terms themselves painted a different picture than the label suggested.
While the firm tried to cover its bases with standard contractor protections, the actual rights, duties, and daily realities looked like employment in every sense.
She worked in the business of another, was directed and supervised, performed non-specialist work, and was paid like an employee.
The contract’s wording could not disguise the reality.
What This Means for You as a Real Estate Agency
So, should every real estate agency in Australia start panicking about offshore staff claiming employee rights? Not quite — but there are some important takeaways:
- Does the Fair Work Act Apply to Offshore Workers: Yes. According to the FWC, the Act will apply when: They work for an Australian company, the contract is governed by Australian law (or not clearly by a foreign law), and the work they perform benefits the Australian business.
- Limited Legal Look: This decision only focused on Pascua’s unique set-up fixed hours, close supervision, and exclusive work for the firm. Also, remember that this ruling was only about unfair dismissal. Other entitlements under the Fair Work Act, like superannuation, leave, or minimum wages, may be judged differently. Being considered an employee in one context doesn’t automatically cover everything. But this is still a good wake up call.
- Invoicing Through Their Company: Many business owners assume they’re in the clear if their offshore worker invoices through a Pty Ltd company or similar business entity — surely that makes them a contractor, right?
Not necessarily. Having the worker operate through a company can support the argument that they’re a contractor, but it’s not definitive.
The Fair Work Commission (and the courts) will always look at the substance of the relationship, not just the contractual structure.
In other words: if you treat them like an employee, they may be legally considered one — even if they’re paid through a separate company.
Factors like control over their hours, integration into your team, and how the work is performed will weigh heavily in any legal assessment.
Hiring Offshore Contractors For Your Agency: How To Avoid Legal Risks
Engaging offshore staff can be a smart, cost-effective way to scale your agency, but it comes with legal complexities you can’t ignore.
To protect your business and stay compliant, here are our key tips:
Be aware of unfair dismissal risks: If a worker is legally considered an employee, terminating them without following proper procedures could trigger an unfair dismissal claim, even if they’re based overseas. Always document warnings, performance discussions, and follow formal termination processes to reduce your risk.
Let them control how and when they work: Contractors should have autonomy over their hours and methods of completing tasks. Avoid dictating daily schedules, mandatory check-ins, or assigning tasks in a way that mimics an employment arrangement.
Ensure they provide their own tools and resources: Have them use their own computers, phones, software, or other materials to complete the work. If you supply equipment or software, it can look more like an employment relationship.
Clearly define the scope of work: Use a written agreement that specifies deliverables, deadlines, and outcomes rather than ongoing duties. Focus on projects or results, not the process of how they work day-to-day.
Avoid integrating them into your team: Do not present offshore contractors as part of your staff publicly, include them in internal emails, or have them attend staff meetings that aren’t project-specific. Contractors should remain separate from your core business team.
Don’t offer employment-style benefits: No paid leave, superannuation, or employee perks. Payment should be on a project basis, milestone completion, or per invoice from their business entity, not hourly work capped like an employee.
Document the independent arrangement: Maintain clear records showing that the contractor controls the work, uses their own systems, and isn’t under direct supervision. Contracts, invoices, and correspondence should reflect independence.
Use specialist legal advice: Draft contracts and review arrangements with an employment lawyer experienced in offshore engagements. At O*NO, we often help clients looking to engage offshore contractors, particularly for administrative roles. Getting professional guidance ensures your contracts reflect a true contractor relationship, reducing the risk of misclassification or sham contracting claims.
Alternatively, there is much less legal risk if you engage a third party agency that supplies offshore VA’s, rather than contracting with the VA directly.
Key Takeaways
- Labels don’t define the relationship: Calling someone a “contractor” in a contract isn’t enough—courts look at how the work is actually carried out.
- Integration matters: If an offshore worker is using your systems, attending meetings, or presented as part of your team, they may be considered an employee.
- Payment structure is key: Hourly rates, capped hours, or fixed weekly pay can point to an employment relationship rather than a genuine contractor arrangement.
- Fair Work Act: Workers performing services for an Australian company may still have protections under the Act, even if they’re based overseas – especially if the company is an Australian entity, the law of Australia apply, and the person performs work for the benefit of the Australian company.
- Professional advice reduces risk: Clear contracts, project-based arrangements, and specialist legal guidance help protect your agency from misclassification claims.
FAQs:
1. Can I treat an offshore worker as a contractor just because they invoice through a company?
Not automatically. The Fair Work Commission and courts look at the actual nature of the working relationship — control, hours, and integration into your business matter more than the contractual label or invoicing structure.
2. Does the Fair Work Act apply to workers based overseas?
Yes — it can apply if the worker is engaged by an Australian company, the contract is governed by Australian law (or not clearly governed by foreign law), and the work benefits the Australian business.
3. How do I avoid accidentally creating an employee relationship with contractors?
Give them autonomy over how and when they work, avoid integrating them into your core team, don’t provide employment-style benefits, and ensure they supply their own tools and resources.
4. Are there risks if I misclassify someone as a contractor?
Yes — misclassification can lead to claims for unfair dismissal, National Employment Standards entitlements, award coverage, or sham contracting penalties. Proper agreements and work practices are key to minimising risk.
