[Australia] Workplace protections could extend to overseas employees

A recent decision by the Fair Work Commission (FWC) suggests that Australian employers using email to employ foreign nationals working overseas could inadvertently cause Australian employment laws to apply to them. Pinsent Masons reports on the decision and its implications.

US national Gautam Parimoo was employed by Australian company Lake Resources NL to perform work at one of its mine sites in Argentina. Following his dismissal, Mr Parimoo brought adverse action proceedings against Lake Resources.

Despite never performing work in or having been based in Australia for the job at all, the FWC reportedly found that Mr Parimoo was an Australian employee entitled to protections under the Fair Work Act 2009 (Cth) (FW Act) because of the way his employment agreement was made.

On this basis, Pinsent Masons cautions employers thinking about such hires to consider changing their engagement processes to reduce that risk.

Implications for employers

Subject to any appeal, Pinsent Masons says the decision seems to expand the circumstances in which an overseas employee, engaged by an Australian employer, may be covered by Australian employment laws. This can have significant ramifications in relation to terms and conditions of employment including pay and leave entitlements, as well as potential legal claims, litigation and, ultimately, legal remedies including possible penalties, damages or other monetary compensation.

Any Australian employers operating and considering employing people overseas are advised to review how they engage those individuals. Using email to enter into binding employment is common, efficient and convenient, however, it could have unintended consequences. 

To avoid unpleasant surprises, Pinsent Masons suggests Australian employers should consider alternatives when hiring foreign workers. For example, by using foreign agents to facilitate the signing of the contract overseas where the employee is based, rather than directly via email. 

Facts of the case

Mr Parimoo was reportedly born in India and was a citizen of the US. He had never been to Australia, either for recruitment or work.

Lake Resources - an Australian company, with its principal registered office in Sydney - operates lithium mines in Argentina.

Mr Parimoo was approached by a recruiter in Santiago, Chile, on behalf of Lake Resources, regarding a chief operating officer role in Argentina. He attended three interviews via video conference from Chile, with representatives from Lake Resources, attending the video conference interviews from Australia.

In October 2021, Lake Resources reportedly sent a signed, unconditional employment agreement to Mr Parimoo via email from Sydney. He opened the employment agreement and signed it in Chile. He returned it to Lake Resources via email, where the email containing the signed employment agreement was opened by a Lake Resources representative in Sydney.

Mr Parimoo subsequently began work in Argentina, where he performed this work exclusively until his dismissal in January 2023. He filed a general protections application with the FWC regarding the dismissal.

FWC decision

For the FWC to have jurisdiction to determine Parimoo’s application, he reportedly had to fall within the definition of an 'Australian-based employee' under the FW Act. An employee can be an Australian-based employee in two ways. The first is by being an employee whose primary place of work is in Australia. Mr Parimoo clearly did not meet this test since his work was entirely performed outside Australia.

The other way to be classified as an Australian-based employee is by being employed by an Australian employer, such as Lake Resources. But, Pinsent Masons says, an employee of an Australian employer is not an “Australian-based employee” if they were engaged outside Australia and engaged to perform duties outside Australia.

Because Mr Parimoo was employed by an Australian employer and engaged to work outside Australia, the only question for the FWC was whether he was “engaged” inside or outside Australia.

The FWC reportedly found that the point at which Mr Parimoo was engaged as an employee of Lake Resources was when his signed employment agreement was opened by Lake Resources. Meaning, the acceptance of Lake Resources’ offer of employment was held to be communicated to Lake Resources when it opened Mr Parimoo’s email acceptance of its offer.

The FWC found that as Lake Resources had opened Mr Parimoo’s signed employment agreement in its Sydney office, the employment agreement was formally made in Sydney, and Parimoo was engaged in Sydney. Accordingly, Parimoo was held to be an Australian-based employee.

According to Pinsent Masons, the FWC considered but ultimately dismissed an argument from Lake Resources that, as the employment agreement it sent Mr Parimoo was unconditional and signed by it, he was engaged when he signed it in Chile.

Source: Pinsent Masons

(Link via original reporting)

A recent decision by the Fair Work Commission (FWC) suggests that Australian employers using email to employ foreign nationals working overseas could inadvertently cause Australian employment laws to apply to them. Pinsent Masons reports on the decision and its implications.

US national Gautam Parimoo was employed by Australian company Lake Resources NL to perform work at one of its mine sites in Argentina. Following his dismissal, Mr Parimoo brought adverse action proceedings against Lake Resources.

Despite never performing work in or having been based in Australia for the job at all, the FWC reportedly found that Mr Parimoo was an Australian employee entitled to protections under the Fair Work Act 2009 (Cth) (FW Act) because of the way his employment agreement was made.

On this basis, Pinsent Masons cautions employers thinking about such hires to consider changing their engagement processes to reduce that risk.

Implications for employers

Subject to any appeal, Pinsent Masons says the decision seems to expand the circumstances in which an overseas employee, engaged by an Australian employer, may be covered by Australian employment laws. This can have significant ramifications in relation to terms and conditions of employment including pay and leave entitlements, as well as potential legal claims, litigation and, ultimately, legal remedies including possible penalties, damages or other monetary compensation.

Any Australian employers operating and considering employing people overseas are advised to review how they engage those individuals. Using email to enter into binding employment is common, efficient and convenient, however, it could have unintended consequences. 

To avoid unpleasant surprises, Pinsent Masons suggests Australian employers should consider alternatives when hiring foreign workers. For example, by using foreign agents to facilitate the signing of the contract overseas where the employee is based, rather than directly via email. 

Facts of the case

Mr Parimoo was reportedly born in India and was a citizen of the US. He had never been to Australia, either for recruitment or work.

Lake Resources - an Australian company, with its principal registered office in Sydney - operates lithium mines in Argentina.

Mr Parimoo was approached by a recruiter in Santiago, Chile, on behalf of Lake Resources, regarding a chief operating officer role in Argentina. He attended three interviews via video conference from Chile, with representatives from Lake Resources, attending the video conference interviews from Australia.

In October 2021, Lake Resources reportedly sent a signed, unconditional employment agreement to Mr Parimoo via email from Sydney. He opened the employment agreement and signed it in Chile. He returned it to Lake Resources via email, where the email containing the signed employment agreement was opened by a Lake Resources representative in Sydney.

Mr Parimoo subsequently began work in Argentina, where he performed this work exclusively until his dismissal in January 2023. He filed a general protections application with the FWC regarding the dismissal.

FWC decision

For the FWC to have jurisdiction to determine Parimoo’s application, he reportedly had to fall within the definition of an 'Australian-based employee' under the FW Act. An employee can be an Australian-based employee in two ways. The first is by being an employee whose primary place of work is in Australia. Mr Parimoo clearly did not meet this test since his work was entirely performed outside Australia.

The other way to be classified as an Australian-based employee is by being employed by an Australian employer, such as Lake Resources. But, Pinsent Masons says, an employee of an Australian employer is not an “Australian-based employee” if they were engaged outside Australia and engaged to perform duties outside Australia.

Because Mr Parimoo was employed by an Australian employer and engaged to work outside Australia, the only question for the FWC was whether he was “engaged” inside or outside Australia.

The FWC reportedly found that the point at which Mr Parimoo was engaged as an employee of Lake Resources was when his signed employment agreement was opened by Lake Resources. Meaning, the acceptance of Lake Resources’ offer of employment was held to be communicated to Lake Resources when it opened Mr Parimoo’s email acceptance of its offer.

The FWC found that as Lake Resources had opened Mr Parimoo’s signed employment agreement in its Sydney office, the employment agreement was formally made in Sydney, and Parimoo was engaged in Sydney. Accordingly, Parimoo was held to be an Australian-based employee.

According to Pinsent Masons, the FWC considered but ultimately dismissed an argument from Lake Resources that, as the employment agreement it sent Mr Parimoo was unconditional and signed by it, he was engaged when he signed it in Chile.

Source: Pinsent Masons

(Link via original reporting)