There are many reasons why a business may want to hire overseas employees. It could be to access talent, to fill skills shortages where there are no Australian employees to fill a position or any other number of reasons.
Regardless of the reason for employing overseas workers, employers should be familiar with the process of hiring from overseas. This includes not only ensuring they are eligible to hire from overseas and sourcing workers but also complying with Australian and overseas laws and any industrial relations factors that may apply.
The Fair Work Act (2009) plays a critical role in this process. In some instances, the Fair Work Act (FWA) covers overseas workers and as such businesses are required to comply with it. The Fair Work Act (2009) outlines the terms and conditions for employment and the rights and responsibilities for employees and employers in relation to that employment.
Who is covered by the Fair Work Act?
The Fair Work Act will cover Australian employers and Australian employees.
The definition of an Australian employer includes all Australian businesses but generally excludes the public sector and local government employees.
An Australian employee is anyone who is employed by an Australian employer as defined above or whose primary place of work is in Australia. However, the definition of an Australian employee excludes employees who are engaged outside Australia to perform duties offshore. In order to determine whether they are covered by the FWA, the following factors need to be considered:
- Was the contract entered into outside of Australia? If it was then the employee is unlikely to be covered by the FWA
- Did the worker perform duties from outside or inside Australia? If the employee was located outside of Australia for the duration of employment, then they are not considered an Australian employee.
- Was the worker engaged to perform duties outside or inside Australia? If an employee is engaged to perform duties outside Australia, then they are unlikely to be considered an Australian employee.
What should employers do if the Fair Work Act covers overseas employees?
If the FWA applies, then employers should engage employees under an employment agreement. An employer can choose to provide them with the same employment as Australian based employees with some adjustments to reflect their place of work.
Employers should ensure they comply with the FWA, including the terms of any relevant modern awards. Employees are entitled to:
- Leave, including annual, sick and parent leave
- Minimum wages
- Protection from discrimination
- Protection from unfair dismissal
- Any redundancy payments
What should employers do if the Fair Work Act does not cover overseas employees?
If the FWA does not apply, then an overseas worker may be hired as a contractor under a contractor agreement.
A contractor agreement is a commercial arrangement therefore the employer can choose the commercial terms of the contract without reference to the entitlement of the Fair Work Act. The benefits outlined in employment agreements can still be offered but as the employer sees fit. An employer can also elect to provide overseas workers with an employment agreement should they choose.
Overseas Industrial Law
Workers may also be covered by local industrial law. An overseas worker can be covered by the Fair Work Act yet also be covered by the industrial laws of the country in which they are located.
On the other side of this, an overseas worker may not be covered by the Fair Work Act but they may have entitlements under their local industrial law for which the employer may be liable.
In these instances, it is recommended that employers seek legal counsel to determine what overseas industrial laws apply.
When it comes to hiring overseas workers, it’s paramount that employers are aware of whether the Fair Work Act applies to overseas hires and how those employees are engaged.
To discuss your options when it comes to hiring overseas workers contact the Visa Solutions team on 1800 828 008 or send us an email.