Your offshore contractor might be an Australian employee

A Filipino accountant who has never been to Australia, never held an Australian visa, and signed two contractor agreements has been found to be an Australian-based employee by the Fair Work Commission.

The case is Sheena Digo v The Trustee for Bicycles Online Unit Trust t/a BikesOnline Australia (C2025/11633). The decision was reported this month, and if you have someone in the Philippines working for you on a contractor agreement, it’s worth ten minutes of your time.

It isn’t the first ruling like this. It addresses a question a lot of Australian businesses assumed was settled in their favour: can Fair Work reach someone who has never set foot here? The answer can be yes, and the reason why is worth understanding.

What happened

BikesOnline is an online-only bike retailer with staff in Sydney and a separate US business in California. In April 2017 it started using Sheena Digo, a CPA in the Philippines, through Upwork.

By 2019 she was its full-time bookkeeper, working directly with the business instead of through Upwork. The Commission noted that apart from dropping Upwork, very little changed. She kept invoicing for the same weekly hours.

In December 2024 she signed a contractor agreement for accounting services. In 2025 she was promoted to senior accountant under a new contractor agreement. She was later let go over alleged breaches of the company’s confidentiality, conduct and non-disparagement policies, and she lodged an unfair dismissal claim.

BikesOnline objected on jurisdiction. Its argument was simple: she’s a contractor, and she’s overseas, so Fair Work has no say. Deputy President Boyce rejected both points.

Why the Commission said she was an employee

The contracts called her a contractor. The Commission looked at how the work actually ran, and found these things:

• The business regularly told her what hours to work and what to focus on.
• She had annual performance reviews.
• She had to get leave approved, on terms that looked like an employee’s leave rules.
• Her invoices simply matched the hours on her timesheet. The Commission said invoices like that don’t make someone a contractor.

None of these is unusual. Most offshore “contractor” setups we see look exactly like this, because that’s how you manage someone who works for you full time. That’s the point. If you run the relationship like employment, the label on the contract won’t save it.

How someone in the Philippines becomes “Australian-based”

This is the part that should get the attention of anyone hiring offshore.

Being an employee wasn’t enough on its own. To bring an unfair dismissal claim, she also had to be an Australian-based employee. The Commission found she was, because of where the 2025 agreement was made.

The offer was sent from Sydney. Her acceptance was received in Sydney. The contract said NSW law governed it. On those facts, the agreement was made in Australia, and that was enough.

So the business’s own paperwork pulled her into the Australian system. Not her location, not a visa, not her nationality. The contract it wrote and sent from its Sydney office.

This is a pattern, not a one-off

In Pascua v Doessel Group, a Filipino paralegal engaged by a Queensland law firm on a contractor agreement was found to be an employee. A Full Bench of the Commission upheld that in February 2025.

Since August 2024, the Fair Work Act has also told decision-makers to look at the real substance of a working relationship, not just the written contract. Digo applies that same thinking to someone offshore.

If your offshore setup has any of these, it’s worth a closer look:

• They work set hours, or hours you decide.
• You tell them what to work on day to day.
• They do performance reviews with you.
• They ask you for leave.
• They invoice the same hours every week, based on a timesheet.
• They only work for you, and have for years.
• The contract was sent from Australia, or says Australian law applies.

What an EOR changes

The fix isn’t to manage your offshore team less. You hired them to be part of your team. The fix is to make sure the right entity is actually the employer.

Under an Employer of Record arrangement, your team member is employed by a registered Philippine entity. At Team Up Now, that’s Team Up Now OPC. The employment contract is made in the Philippines, under Philippine law, with SSS, PhilHealth, Pag-IBIG, 13th month pay and leave handled properly. Your business pays a service invoice to an Australian company.

You still direct the work day to day. A properly structured EOR removes the direct employment relationship with your Australian business and significantly reduces exposure; it is not a guarantee that every possible claim is prevented.

One honest caveat. The Digo decision only settles jurisdiction, meaning the claim can go ahead. Whether the dismissal was unfair hasn’t been decided yet. Every setup is different, and this post isn’t legal advice. If you have long-term offshore contractors, talk to an employment lawyer about your own arrangement.

If you’d like to move an existing offshore contractor onto a proper employment arrangement, get in touch and we’ll walk you through how it works. You can also estimate your employment costs with our EOR calculator.

Sources

• Accountants Daily report on the decision, 8 October 2026.
• Sheena Digo v The Trustee for Bicycles Online Unit Trust t/a BikesOnline Australia (C2025/11633), Fair Work Commission, Deputy President Boyce, reported October 2026.
• Doessel Group Pty Ltd v Pascua [2025] FWCFB 43, Fair Work Commission Full Bench, February 2025.