EVERY weekday for nearly two years, Joanna Pascua worked from her home in the Philippines at ‘times that matched business hours in Australia.’ She logged into a company ‘pbx phone unit which made it appear when she used her phone that she was in Australia,’ and signed her emails with a signature block that ‘identified her as a paralegal for MyCRA Lawyers.’ She also chased the same daily Key Performance Indicators (KPIs) any employee would: to ‘Complete a minimum of 20 productive tasks per day… OR 4 hours per day billable.’
On paper, though, Pascua wasn’t an employee at all. The contract she signed in July 2022 was headed ‘Independent Contractor’s Agreement,’ and the company noted that the agreement used the term ‘independent contractor’ 52 times against just five mentions of the word ’employee’. To her employer, MyCRA Lawyers-which is owned by the Doessel Group Pty Ltd-she was an independent contractor providing services.
That distinction mattered enormously in March 2024, when Doessel Group’s founder summarily terminated her over a Skype call and a follow-up email, asserting that she had breached her contract by ‘unlawfully copying company information and client information to her personal drive’.
Pascua denied the allegation and filed an application for an unfair dismissal remedy with the Fair Work Commission (FWC). Doessel Group fought to have the case thrown out, raising a ‘jurisdictional objection on the basis that Pascua was an independent contractor under a contract for services and not an employee’.
The FWC disagreed. Deputy President Tony Slevin, guided by recent High Court precedents, found that the contract’s label was not determinative; instead, the assessment must evaluate ‘the legal rights and obligations established by the contract’.
He ruled that ‘the nature of the work required under the contract was subordinate to the business of MyCRA Lawyers such that it can be seen to have been performed as an employee of that business rather than as part of an independent enterprise’.
Her pay was a major indicator of this dynamic.
She was paid ‘AUD$18 (Php 680) per hour Salary all inclusive as a Full Time Employee,’ which Slevin noted was ‘less than the minimum rates payable under the relevant award’.
The casual rate for her level of work was $30.95 (Php 1,170) per hour. As the commission noted, ‘Remuneration for persons engaged in their own business, as contractors, is usually in excess, and often well in excess, of wages paid to employees who may perform the same work’.
Doessel Group appealed, arguing she was a Philippine national who had never worked in Australia.
In February 2025, the FWC Full Bench dismissed the appeal, declaring that ‘the fact that Pascua in fact performed work in the Philippines is irrelevant to the character of the relationship created by the Independent Contractor’s Agreement’.
Regarding jurisdiction, the Full Bench explored whether Pascua was ‘engaged outside Australia’ under the law.
The tribunal pointed out that ‘a contract is formed upon receipt by the offeror of communication of its acceptance by the offeree.’
‘Where a contract is formed by means of email communications, the position that appears to have been adopted is that the contract is made where the electronic communication is received,’ the FWC said in its ruling.
For an Australian company, this means the contract is legally ‘formed in Australia’ and brings the offshore worker under Australian protection. (Note: The tribunal stopped short of a final jurisdictional ruling purely on this point because the exact evidence of how Pascua returned her contract was incomplete, but the legal pathway was clearly established.)
The FWC ultimately ruled Pascua’s dismissal was ‘harsh, unjust, and unreasonable,’ and awarded her ‘A$10,800 (P408,200) in compensation for unfair dismissal’ (equivalent to 15 weeks of pay), along with back-payments to Australian minimum wage standards.
Pascua’s case is now the reference point for a question far bigger than one law firm, serving as ‘the most consequential Australian employment law decision affecting offshore staffing arrangements in recent memory’.
Based on industry data, ‘more than 300 Australian organizations directly employ or contract approximately 44,000 Filipino professionals who work from the Philippines’.
The stakes for these arrangements have recently risen dramatically.
Under Australia’s new wage theft laws effective January 2025, ‘intentional underpayment can result in fines or imprisonment,’ turning a misclassification issue into a ‘criminal compliance problem’ where company directors can face personal liability.
Additionally, new ‘Payday Super’ rules taking effect on July 1, 2026, require that a 12 percent superannuation contribution ‘must be paid simultaneously with wages,’ increasing the financial risk of these arrangements being scrutinized.
With these overlapping reforms, the ‘compliance cost of misclassification has moved from administrative to criminal’.
Taken together, employment advisers say the reforms make misclassifying a Filipino remote worker as a contractor a far costlier gamble than it used to be.
Many expect, and some are already seeing, a shift away from direct hiring altogether, with Australian firms routing their Philippine hires through employer-of-record providers or traditional business process outsourcing agencies instead.
Those intermediaries formally employ the worker in the Philippines, handle local statutory obligations such as SSS and PhilHealth contributions, and absorb the compliance risk that direct engagement now carries.
For Pascua, the case closed with a payout and public vindication of the years she spent proving her work was never really freelance at all.
For the Philippine outsourcing industry, it left something bigger: fewer direct-hire arrangements, perhaps, but a stronger case for the tens of thousands of Filipinos still doing this work to insist they be treated – and paid – like the employees they actually are.
Legal ‘loophole’ for Filipino remote workers
Philippine labor laws have a ‘loophole’ that limits protection for Filipinos directly hired by foreign companies with no physical presence in the country, according to National Labor Relations Commission (NLRC) Commissioner Herman Nicdao.
‘This is sort of a loophole in our laws because it’s very difficult now to protect our workers from direct hiring,’ Nicdao said.
The issue has become more pressing with the rise of freelancers, virtual assistants and other Filipinos working remotely for overseas companies that have no branch or office in the Philippines.
This leaves labor authorities facing an immediate jurisdictional hurdle, particularly in determining how legal processes may be served on an employer located entirely abroad.
‘The first question is, how do we get jurisdiction over that company?’ Nicdao said.
The commission is studying whether service through email could be used as an alternative means of acquiring jurisdiction over foreign employers.
However, securing jurisdiction would only address part of the problem since a favorable ruling may still be difficult to enforce against a company with no property or presence in the country.
‘The next question is that, assuming that we acquired jurisdiction over the employer and the employee won in the case, how are we going to enforce the decision?’ Nicdao said.
To address the enforcement gap, he proposed requiring foreign companies that directly hire Filipino remote workers to maintain a bond or bank account in the Philippines that could be garnished in cases of illegal dismissal or other labor violations.