Australia you're standing in it! Interesting workplace problems

*Some of our (older) readers may remember the name of that TV comedy show.  And those who keep up with employment law cases may see an echo of the show’s title in some recent decisions. 

In this Bulletin we look at some of the interesting workplace problems that can arise if you don’t know where you’re standing.

The shifting edges of Australia

The Full Federal Court has just confirmed[1] that Australia’s migration zone includes the offshore resources sector, and that means that foreign workers employed on those projects will need 457 visas.  The Federal Government had made a Determination shrinking Australia’s migration zone so that, even though offshore projects were covered by Australian law, foreign workers working on the offshore projects did not need 457 visas because they would not be in a part of Australia that required foreign workers to have visas.  The Court decided the Determination was ineffective.

So how far away from Australia does an employee have to be before Australian law does not apply, and does it matter where the employer sits?

The coverage of the Fair Work Act 2009 is geographic in the sense that all laws are geographic, the edge of the country being the end of Australia’s sovereign power.  There are quirky exclusions and minor extensions but the basic proposition is that if you’re standing in Australia, you’re covered.  But that doesn’t stop employers and even employees trying to test the boundaries.

Overseas bullying?

An Australian citizen working as a volunteer in Kiribati for the Ministry of Public Works lodged a bullying claim in the Fair Work Commission on the basis that it was an Australian company that had organised and supervised the assignment.  The Fair Work Commission had no jurisdiction because the person wasn’t working for the Australian company[2]. The implication is that, had the volunteer been working for the Australian company, a claim was open to be made even though the work was being performed in Kiribati.

Overseas recruitment?

Recently a cook was brought out from India to work in a local Indian restaurant, not paid appropriately and kept in conditions of slavery. It seems the Indian employer believed he could make whatever deal he liked with an Indian national if the deal was made in India, even if the work was undertaken in Australia.  Of course the court said he could not do so[3].

If you are working in the private sector in Australia, then the Fair Work Act is going to apply for you, and sometimes, even if you are in the public sector.  Local compliance trumps home town contract.

Overseas employer?

Overseas corporations need to be careful about sending their well paid executives to work in Australia.  The Fair Work Act also applies to foreign corporations so when they send their employees to Australia the employees could be covered by local law, and that can have some interesting outcomes. 

We had one interesting case of a long-serving employee of an overseas bank who was sent to Australia for a year, fell in love with the place and resigned to stay.  He picked up long service leave, based on local and overseas service, even though he had come from a country where long service leave did not exist. 

Sending them overseas?

What if an Australian company sends an employee overseas for a while, or wants to employ an Australian in an overseas operation? It all depends on the circumstances.  But if you recruit in Australia, pay for relocation costs and return airfares, and enter the contract in Australia, then there’s a real risk that you are caught by Australian law, even while also covered by the local overseas law. It might be better to do the engagement through an overseas company. 

Bringing them home?

And the reverse can be more complicated.  One of our Australian clients wanted to employ their New Zealand manager of their New Zealand company out of Australia because he visited Australia every week or so to report.  Of course New Zealand law continued to apply, but so did some Australian laws.

Where do you compete?

Most restraints are written in geographical terms – the employee will not, for six months anywhere in Sydney or NSW or Australia, compete with the employer.  But in the modern age competing can be done out of the cloud and over the internet?  Is the restraint about where the employee sits or where the customers are?

This is not a theoretical question.  We helped one of our clients avoid this very problem by suggesting they work out of Singapore for six months rather than risk being sued for competing ‘in Australia’.

Maybe your restraints of trade need a review? 

None of what we’ve said will matter much at all if your horizon is no further than what you can see from the beach.  But as Australia connects more and more with the rest of the world, questions of geography and the law will be to the fore. 

 
Author: Mark Paul