As more Australian based employers are employing people overseas, I am often asked whether those employees based overseas are entitled to Australian statutory benefits.
An employee, who was employed in and resident of Singapore, has made a claim for statutory redundancy against his Australian based employer. Despite being paid in Australian dollars and receiving superannuation pursuant to Superannuation Guarantee (Administration) Act 1992, the employee lost.
Relevantly, Section 35 of the Fair Work Act 2009 provides:
“(2) An Australian-based employee is an employee:
(a) whose primary place of work is in Australia; or
(b) who is employed by an Australian employer (whether the employee is located in Australia or elsewhere); or
(c) who is prescribed by the regulations.
(3) However, paragraph (2)(b) does not apply to an employee who is engaged outside Australia and the external Territories to perform duties outside Australia and the external Territories”
The employee making the claim:
• had a pro-forma Australian employment agreement, which directly referenced Australian legislation including the Fair Work Act 2009, Workplace Relations Regulations 2006 (Cth), Paid Parental Leave Act 2010 (Cth), Occupational Health and Safety Workplace Health and Safety laws, Privacy Act 1988 (Cth) and the Superannuation Guarantee (Administration) Act 1992;
• was “domiciled in, and resident of, Singapore”; and
• was paid his salary in Australian dollars into a Singaporean bank account, and he did not pay tax in Australia, but, rather, paid in tax in Singapore.
His primary duties and role, however, concerned “the development of prospective reseller partnerships…” in the Philippines, Singapore, Hong Kong and Asia, more generally. It was found that he conducted no business in Australia and, on the occasions he did visit Australia, it was not to fulfil the requirements of his role.
The employee was made redundant and, in his letter of termination, the employee was informed that there were no comparable roles to which to redeploy him in Australia. No redundancy payment, contractual or statutory, was offered to the employee. If the employee was an Australian based employee, he would have been entitled to a statutory redundancy payment.
The employee made an application to the Federal Circuit Court of Australia alleging he was dismissed in contravention of Part 3-1 of the Fair Work Act 2009 because he had not received a statutory redundancy payment on termination of his employment.
The Court was not convinced by the references to Australian legislation in the employment agreement, commenting that:
“The question is not whether there are references to the Act [Fair Work Act] in the Agreement, but whether there are any duties identified in the Agreement, expressly or by necessary implication, to be performed within Australia, or other than outside Australia. There are none.”
Accordingly, the Court held that the employee was not an Australian Based Employee pursuant to section 35 of the Fair Work Act because he “was engaged outside Australia to perform duties outside Australia”.
Sng v Canvas Australia Solutions Pty Limited  FCCA 1155 (3 May 2019)