25 August 2026

The Fair Work Act goes global - when overseas employees fall under the Act

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The rise in remote work and offshoring for Australian employers has meant that courts and tribunals have increasingly turned their minds to the issues that arise when engaging staff overseas. The recent Fair Work Commission decision in Sanderson v Brightest Australia Pty Ltd [2026] FWC 1633 (Sanderson) demonstrates that the Fair Work Act 2009 (Cth) (FW Act) may apply well beyond Australia’s physical borders, with significant consequences for employers who assume otherwise.

At the centre of this shift is not where the employee works, but ‘how’ and ‘where’ the employment relationship is formed.

Sanderson v Brightest Australia Pty Ltd [2026] FWC 1633 (Sanderson)

In this matter, the Commission was required to determine whether the applicant, Mr Sanderson, working entirely outside Australia, could bring an unfair dismissal claim under the FW Act.

Mr Sanderson had been dismissed from his position via email for failing to meet performance expectations.

Mr Sanderson was a resident in New Zealand and performed his duties exclusively there, engaging with New Zealand clients in a sales role. His role was directed entirely toward a foreign market and not that of Australia. However, his employer was an Australian company, and the employment relationship was managed from Australia.

Before considering whether the dismissal was unfair, it was necessary to determine whether the FW Act applied at all. This turned on whether Mr Sanderson fell within the definition of an “Australian-based employee” under the FW Act. From a practical perspective, the arrangement appeared wholly offshore. But there’s more to it.

The Commission was required to consider the jurisdictional question:

Can an employee who has never worked in Australia still be protected by the unfair dismissal laws of Australian employment law?

The legislative framework

Section 35 of the FW Act defines both “Australian employer” and “Australian-based employee” and extends the operation of the Act beyond strict territorial boundaries.

Under s 35(2)(b), an employee will fall under the FW Act where they are employed by an Australian employer, even if they are located overseas. However, s 35(3) states that s 35(2)(b) does not apply to an employee who is engaged outside Australia to perform duties outside Australia. This provides a limited carve-out.

As Vice President Hatcher noted in Munjoma v Salvation Army (NSW) Property Trust as Trustee for the Social Work [2013] FWC 3337 at [38], “The exclusion in s 35(3) has two limbs, both of which must be satisfied in order for the exclusion to operate”. The two limbs are:

That the employee is “engaged outside Australia and the external Territories”.
The engagement is to “perform duties outside Australia and the external Territories”.

While the second limb often presents little difficulty, the first limb, where the employee was “engaged”, requires a more technical inquiry. Deputy President Farouque in Sanderson made clear that this turns on contract law principles, stating at [25] that the issue requires “analysis and determination of the place where the contract of employment was formed”.

Application in Sanderson

The critical issue remained whether Mr Sanderson had been ‘engaged’ outside Australia. The Commission considered the formation of the employment contract. The employer had sent the contract electronically, and the employee signed and returned it via email. The decisive question was where acceptance took legal effect.

The Commission held at [31] that “the act of acceptance occurred upon receipt by the respondent” and that “the formation of the contract occurred in…Australia”.

This is informed by s 14(1)(b) of the Electronic Transactions Act 1999 (Cth), which provides that “the electronic communication is taken to have been received at the place where the addressee has its place of business”. The Commission noted “the place of receipt of a document is the place where the contract is made”, informing that the place of receipt of the executed agreement is critical.

Therefore, because the contract was formed in Australia, and acceptance of the executed agreement was received at the respondent’s place of business, the employee was not engaged outside Australia. The exclusion in s 35(3) therefore did not apply.

Once jurisdiction was established, the Commission assessed the dismissal under the FW Act and found that the dismissal was ultimately held to be harsh, unjust and unreasonable.

A different outcome arose recently in Mr John Harris Pe v Satellite Office Solutions Pty Ltd & Pepperstone Group Ltd [2026] FWC 2068, where a Philippines-based employee executed his employment contract in “wet ink” in the Philippines, with the contract also signed there on behalf of the employer. The Commission held the employee was both engaged and performed work outside Australia, and s 35(3) applied to bar the claim.

Mitigating risk in cross-border engagements

Sanderson and Pe highlight a significant and often overlooked risk for Australian employers. In the increasingly digital environment employers and employees engage in, jurisdiction is no longer determined by where the employee works, but by ‘where’ the legal relationship is created.

Employers need to:

Control where the contract is formed
Carefully consider where offers are issued and, more importantly, where acceptance is received. Receiving acceptance in Australia will likely result in the contract being formed domestically.
Assess FW Act exposure across your global workforce
Employers engaging offshore employees or servicing overseas markets should actively consider whether those workers may fall within the jurisdiction of the FW Act, recognising that Australian law may apply based on the structure of the engagement and the conduct of the business, rather than the physical location of the employee.
Review and maintain records of contracting practices
Standard processes need to be reviewed and ensured compliance with relevant legislation. Retain all versions of employment contracts, offers, signed agreements, and related correspondence (including emails and electronic communications) to clearly evidence where and when offer and acceptance occurred.
Seek advice at the engagement stage
Early advice on structuring offshore arrangements can significantly reduce the risk of unintended FW Act exposure.