When the Fair Work Act Follows Your Offshore Team: The Sanderson Decision Explained

A salesman based in New Zealand. An Australian employer. An offer letter signed at his kitchen table and emailed back to head office. None of it happened on Australian soil — except the one detail that ended up deciding everything.

In Sanderson v Brightest Australia Pty Ltd [2026] FWC 1633, the Fair Work Commission found that David Sanderson — who lived in New Zealand, worked in New Zealand, and sold to New Zealand customers — could bring an unfair dismissal claim under Australia’s Fair Work Act 2009. Brightest had let him go for missing sales targets. He said he had never been told his job was at risk. The Commission agreed, found the dismissal harsh, unjust and unreasonable, and held that Australian workplace law applied to him.

If you are an Australian business with people working overseas — and that includes founders quietly building teams in the Philippines — this is worth understanding properly.

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Why a New Zealand Worker Ended Up Under Australian Law

Brightest probably assumed the obvious: their worker lived and worked in New Zealand, so New Zealand rules applied. Reasonable assumption. Wrong one.

Deputy President Farouque found Sanderson was an “Australian-based employee” under the Fair Work Act for two reasons. First, he was employed by an Australian employer. Second — and this is the part that catches people out — his employment contract was formed in Victoria.

How does a contract signed in New Zealand get formed in Victoria? Because of where the acceptance was received. When an employee signs an offer and emails it back, the contract is formed where that acceptance lands, not where the person was sitting when they signed it. Sanderson signed in New Zealand and emailed it to Brightest in Australia. In the eyes of the law, he was engaged in Australia.

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The Two Ways Australian Law Can Reach an Offshore Worker

The Fair Work Act has two doors through which it can apply to someone working abroad.

Door 1: The National System Employer Test

Is the employment relationship, taken as a whole, sufficiently connected to Australia? This is a holistic look at the arrangement — including whether the overseas worker is doing work tied to the employer’s Australian operations. Foreign companies can also be caught under this test.

Door 2: The Australian-Based Employee Test

This is the door Sanderson walked through. Under this test, some parts of the Act can apply. There is a carve-out for offshore workers, but it only applies if both of these conditions are true:

• the employee is engaged outside Australia; and
• the employee is engaged to perform duties outside Australia

Both limbs must be satisfied. Miss one and the carve-out does not apply. Sanderson clearly performed his duties in New Zealand — the second limb was met. But because his contract was formed in Australia, the first limb failed. One missing limb was enough to pull him inside the Act.

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“But Our Worker Is in the Philippines”

Here is why this matters well beyond one New Zealand salesman.

The Commission was not reasoning about New Zealand specifically. It was reasoning about where a worker is engaged and how connected the relationship is to Australia. Swap New Zealand for the Philippines and nothing in the logic changes.

Picture the standard setup. An Australian business finds a Filipino professional, sends through an offer, the candidate signs it in Manila and emails it back, and the acceptance is received in Australia. On the Sanderson reasoning, that contract may well have been formed in Australia — which means the “engaged outside Australia” limb fails, the carve-out falls away, and your Manila-based hire may be an Australian-based employee with access to Australian workplace protections.

A line in the contract saying “Philippine law applies” does not fix this. The Commission’s point is direct: the Act’s coverage turns on technical legal tests, not on what the parties assumed or wrote down about which country’s laws govern the relationship.

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What This Puts at Risk

For an Australian business engaging Filipino staff directly, getting this wrong is not a paperwork problem. Where the Fair Work Act applies — in whole or in part — you can be exposed to:

• Unfair dismissal claims
• General protections (adverse action) applications
• Underpayment claims measured against Australian minimum standards
• Under-accrual of paid leave entitlements

Brightest learned this the expensive way. They were a small business, which should have let them rely on the Small Business Fair Dismissal Code. They could not — because they had not given Sanderson a clear warning that his job was at risk, and had not given him a real chance to respond before letting him go. The protection was there; they had failed the basic steps to earn it.

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Where a Proper EOR Structure Changes the Equation

This is the exact risk an Employer of Record arrangement is built to manage.

Instead of an Australian business reaching across the border to engage a worker directly — and tripping over where the contract was formed — the worker is employed through a Philippine entity, under Philippine law, with local compliance handled properly: statutory contributions, leave, the right termination process.

It does not make the Sanderson reasoning irrelevant. It changes who the employer is and where the engagement sits, so the relationship is structured deliberately rather than by accident of which inbox an email landed in.

The difference between “we will sort out the contract later” and a clean, intentional structure is the difference between managing this risk and discovering it in a Commission hearing.

This is also why the ethical, compliance-led model matters more than the cheapest-rate one. The businesses most exposed here are usually the ones who treated an overseas hire as a casual side arrangement.

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A Quick Gut-Check for Founders

If you have people working for you offshore, run through this:

Know that the Act can reach offshore workers. Distance is not a shield.

Look at how you onboard. Where are your offers issued and accepted? Where is the signed contract received? Those steps can decide everything.

Treat each relationship on its own facts. Coverage turns on the specifics of the arrangement, not a template.

If the Act applies, run terminations properly. That means complying with both Australian process and the law where your worker lives.

Get advice early — when you are setting up the engagement, and well before you make any decision to end one.

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The Bottom Line

Sanderson v Brightest is a reminder that the border you think protects you might not be where you think it is. For Australian businesses building teams in the Philippines, the safest position is not hoping the Fair Work Act stays home. It is structuring your offshore engagements on purpose — so you know exactly which laws apply, and you are meeting them.

If you are unsure whether your current arrangements are properly structured, book a call with our team. We work with Australian businesses every day to set up compliant, ethical offshore engagements that hold up under scrutiny.

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This article is general information, not legal advice. The Sanderson decision is recent and single-member Commission decisions can be subject to appeal. If you engage staff overseas, get advice tailored to your specific arrangements before relying on any of the above. Case analysis drawn from Hall and Wilcox, “Beyond borders: when the Fair Work Act follows your employees overseas” (10 June 2026).