Fair Work Case Highlights the Risks withth Offshoring: A VBP Perspective
If you're considering outsourcing or already doing so, this recent Fair Work Commission decision is a wake-up call, one you’ll want to pay close attention to.
You’re likely aware of the appeal: lower costs, expanded talent pools, and the chance to offload administrative burden via back-office or remote support. But what happens when outsourcing doesn’t just create efficiencies, but introduces legal, ethical, or reputational risk?
In November 2024, the Fair Work Commission delivered a ruling that brings those risks sharply into focus. In the case of Joanna Pascua, a legal assistant in the Philippines, the Commission found in favour of unfair dismissal even though she had been engaged via contract as an “independent contractor.” (Professional Planner) Tasks labelled as administrative or “ad hoc duties” were deemed sufficient to establish an employment relationship under Australian law. That’s a big deal. (Professional Planner)
What this means for advice practices and other Australian businesses is that the offshore model, so often promoted for its savings, cannot sidestep certain obligations. You might save on hourly rates, but without care, you may also take on legal exposures, ethical responsibilities, and hidden costs.
Here are what we at VBP see as the main take-aways from this case, and how you can protect your business while still benefiting from outsourcing.
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Risk Area |
What the Fair Work Case Reveals |
How to Manage / Mitigate |
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Employment status |
Even if someone is contracted “offshore,” the nature of work (e.g. administrative, “as required” work) can tip them into being considered an employee. (Professional Planner) |
Make sure contracts are precise, roles are clearly defined, and both parties understand expectations. When in doubt, consult legal. |
|
Legal & tax obligations |
There may be obligations under Australian employment law even if the worker is located overseas. Also, risk that offshore contractors may not be meeting their local tax or regulatory obligations. (Professional Planner) |
Use partners who provide oversight of compliance, or establish processes to verify tax, labour, and legal compliance in the contracting party’s location. |
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Ethical & worker welfare considerations |
The case emphasises that ethical treatment, safety, health, workplace conditions even for remote workers matter. (Professional Planner) |
Ensure that remote/offshore staff have safe working conditions, fair treatment, and clarity around benefits or support if needed. If using a partner, make sure they audit or provide transparency. |
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Data, privacy & cyber-risk |
Managing remote work introduces cyber-security risks, privacy obligations, data protection issues. Broken contracts or weak oversight can lead to breaches. (Professional Planner) |
Define privacy and information security standards. Include clauses in contracts about data protection. Use secure systems. Regularly review and test controls. |
We believe outsourcing done well remains a powerful lever for growth. But “done well” means being diligent, not just about cost, but about structure, values, and compliance. Here’s what partnering with a company like VBP can help you achieve:
Offshoring remains a compelling option. But the Fair Work Commission’s ruling reminds us: cutting costs doesn’t absolve you of responsibility. As you weigh outsourcing, think beyond the price tag. Think structure. Think employee vs contractor classifications. Think ethics. Think security.
At VBP, we’re here to help you navigate those trade-offs confidently. With the right frameworks, partner or internal strategy, you can gain the benefits, without falling prey to risks you didn’t see coming.
This article originally appeared in Professional Planner
Fair Work case highlights the risks with offshoring - Professional Planner