She worked from the Philippines for eight years, never visited Australia, and was paid as a contractor. The Fair Work Commission still treated her as an Australian-based employee.
If you run an accounting practice or finance team with offshore staff, this is the second warning in just over a year, and it won’t be the last.
In a decision reported this month, the Fair Work Commission (FWC) rejected an Australian online retailer’s argument that its Philippines-based senior accountant was an overseas independent contractor who couldn’t bring an unfair dismissal claim. Her case can now go ahead.
It follows the same path as the 2025 Pascua decision, when a Philippines-based paralegal won compensation from a Queensland law firm. Two cases, two industries, and the same outcome: a “contractor” agreement did not protect the business.
What happened in the latest case
The worker is a Filipino CPA with a degree in accountancy. She started working for BikesOnline Australia in 2017 through Upwork, became a full-time bookkeeper in 2019, and was promoted to senior accountant in 2025. Throughout, she signed contractor agreements and invoiced the business each week. She had never been to Australia and had never held an Australian visa.
After she was let go over alleged breaches of company policy, she filed an unfair dismissal application. The business objected on jurisdictional grounds, arguing she was an offshore contractor.
Deputy President Gerard Boyce disagreed. He found that the real nature of the relationship was employment, pointing to several facts:
- The business controlled her work. It regularly set her working hours and told her what tasks to do.
- She was treated like staff. She had annual performance reviews and needed approval to take leave.
- Her “invoices” were really timesheets. She billed for the hours she worked, not for completed deliverables, which is how employees are paid rather than independent contractors.
- The contract was tied to Australia. The latest agreement was sent from Sydney, her acceptance was received in Sydney, and the contract named New South Wales law as the governing law.
The result: she was found to be an “Australian-based employee” for the purposes of the claim.
Sound familiar? Remember Pascua
In Pascua v Doessel Group Pty Ltd [2025] FWC 1833, a Philippines-based paralegal worked remotely for a Queensland law firm during Australian business hours. Her agreement was titled “Independent Contractor Relationship.” When the firm terminated her by email, she lodged an unfair dismissal claim.
The firm lost. In June 2025, the FWC found she was an employee and had been unfairly dismissed, and awarded her $10,800 in compensation. Earlier that year, a Full Bench of the FWC had also rejected the idea that working from overseas, by itself, changes whether a relationship is employment.
The Commission looked past the contract heading and focused on how the arrangement worked in practice: the firm directed her work, set her deadlines, gave her a company email signature and phone account, and paid her well below the award rate.
Put the two cases side by side and the pattern is hard to ignore:
| Pascua (2025) | Latest case (2026) |
Worker | Paralegal in the Philippines | CPA and senior accountant in the Philippines |
Business | Queensland law firm | Sydney-based online retailer |
Contract label | Independent contractor | Contractor agreement |
How she was engaged | Directly by the Australian business | Directly by the Australian business |
What the FWC focused on | Control, integration, pay below award | Control, leave approval, reviews, timesheet invoicing, Australian contract formation |
Outcome | Found to be an employee, unfairly dismissed, $10,800 compensation | Found to be an Australian-based employee, claim proceeds |
The common thread is not the industry or the role. It is that both workers were engaged directly by the Australian business, on contracts that described one thing while the day-to-day relationship looked like another.
Why the "contractor" label no longer works
Since 26 August 2024, the Fair Work Act has required the Commission to look at the “real substance, practical reality and true nature” of a working relationship, not just what the contract says. If someone works set hours, follows your instructions, asks you for leave, gets performance reviews and bills you by the hour, calling them a contractor will not carry much weight.
For accounting firms, this risk is higher than most. Offshore bookkeepers, accountants and auditors usually:
- work fixed hours aligned to Australian business days
- sit inside your practice software, client files and internal systems
- follow your review process, deadlines and workflows
- stay with you for years, often growing into senior roles
In other words, they look exactly like employees, because in practice they are part of your team.
The bigger issue: who is the employer?
Both cases share one more detail. The Australian business contracted directly with the offshore worker. That made the Australian business the only party the relationship could attach to, and in the latest case the contract was even formed in Sydney under NSW law.
This is where an Employer of Record (EOR) changes the picture.
With an EOR, your offshore team member is legally employed in the Philippines by a Philippine-registered company, under a Philippine employment contract that complies with the Labor Code. The EOR runs payroll, withholds tax, pays SSS, PhilHealth and Pag-IBIG contributions, provides 13th month pay and statutory leave, and manages any disciplinary or separation process in line with Philippine due process requirements.
You still direct the person’s daily work, but you are not their direct employer, and you are not left holding a contractor agreement that a tribunal may later reinterpret. It is the same structure the Pascua commentary pointed to when it suggested engaging overseas workers through a local third party.
No structure removes every legal risk, and how you manage your team still matters. But a properly set-up EOR arrangement puts the employment relationship where it actually is, in the Philippines, with a local employer that is accountable for compliance.
Quick check: is your offshore team exposed?
If you answer “yes” to two or more of these, it is worth reviewing your setup:
- Your offshore staff are engaged on contractor agreements you issued directly, or through a freelance platform.
- You set their working hours and assign their daily tasks.
- They need your approval to take leave.
- You run performance reviews or have promoted them.
- They invoice you based on hours worked.
- Your contract names an Australian state’s law as the governing law, or was sent and signed from Australia.
- They use your company email, signature or phone system.
How UpStaff helps accounting firms hire offshore, the right way
UpStaff is a Philippines-based offshore staffing and Employer of Record company that specialises in accounting and finance roles: bookkeepers, accountants, auditors, payroll specialists and finance support. Our founder is a Filipino CPA, so we understand both the work your team does and the compliance behind it.
We can help you:
- Recruit qualified accounting talent, including Philippine CPAs, matched to your systems and workflows.
- Employ them compliantly through our Philippine entity, with proper employment contracts, payroll and government contributions.
- Move existing offshore contractors onto a compliant EOR arrangement, so you keep the people you trust without carrying the risk.
- Handle HR and separations under Philippine labour law, so a performance issue doesn’t turn into a tribunal claim in Australia.
We work with clients in Australia, Hong Kong, Singapore, the UAE, the US, the UK and Europe.
Don't wait to be the next case
Pascua was meant to be the wake-up call. A year later, it has happened again, this time to an accountant. If your offshore team is set up as contractors, now is the time to review it, before a dismissal or dispute forces the question.
Talk to UpStaff today. Book a call or visit upstaffremote.com and we’ll walk you through how to move your offshore accounting team onto a compliant structure.
This article is general information only and does not constitute legal advice. Businesses should seek advice from a qualified employment lawyer about their specific circumstances.
Sources: Sheena Digo v The Trustee for Bicycles Online Unit Trust t/a BikesOnline Australia (C2025/11633), as reported by Accountants Daily, October 2026; Pascua v Doessel Group Pty Ltd [2025] FWC 1833 and [2025] FWCFB 43.