The recent Fair Work Commission (FWC) decision in Pascua v Doessel Group Pty Ltd [2024] FWC 2669 is unambiguously good news for the BPO industry, for Australian and Filipino workers, and for Australian businesses.
This is despite the case being questioned in commentary around the definition of a contractor and, most importantly, Pascua’s status as a Filipino national who worked from the Philippines and has never visited Australia, let alone worked there. How can a Filipino-based employee be eligible to the protections of the Australian Fair Work Commission?
So, why is it good news for each stakeholder?
1) The Business Process Outsourcing Industry: Pascua v Doessel helps close the door on what is effectively a black market. Currently, an unknown number of Australian (and other) firms hire Filipinos directly and pay via wire transfer, avoiding a bunch of “costs” but also regulations.
This is a black market because it is informal and unregulated. Often, workers are exploited. For example, they are paid a minimal amount, have to provide their own IT systems, and are denied any access to regulated workplace rights or other protections. There is a strong suspicion that they don’t pay any tax to anyone, but in this way are also denied access to any social safety net such as SSS, PhilHealth, or PagIbig.
The IMF estimates that around 31.9% of the Philippine economy is ‘informal’, from which you could extrapolate that there are about 750,000 Filipinos working under these conditions.
The Fair Work Commission decision significantly disincentivises the black market option for Australian businesses. Not only are such employees now able to appeal for protection around an issue like unfair dismissal, but also potentially around minimum wage. What this decision potentially means is that Australian firms wanting to employ workers anywhere else in the world need to do so legally and ensure their staff are on proper employment contracts. In essence, if you are a direct employee of an Australian firm, then you are entitled to Fair Work Commission protection regardless of where you live
It is worth noting that if Pascua had been employed legally by a Filipino firm under Filipino law subject to Filipino regulations, then she would have had zero pathway to approach the Australian Fair Work Commission. It was the fact that she ‘contracted’ directly with the Australian firm as an individual (employee) that opened the door.
2) Filipino Workers: Pascua v Doessel creates a pathway whereby low-paid Filipino workers can have more certainty around access to workplace rights and regulatory protections. It has to be remembered that the main reason businesses choose the black market pathway is to cut costs by avoiding complications such as industrial relations rules, tax, and the like.
However, it is highly doubtful that very much of this ‘saving’ ends up in the pocket of the worker. It would be reasonable to assume that the ‘saving’ ends up in the pocket of the employer. This is despite the fact that it is the worker paying the price. It is the worker who is denied access to workplace regulations and process, it is the worker who has to provide their own IT, and it is the worker who, should they decide not to pay tax, misses out on inclusion in the Filipino social safety net.
This decision incentivises Australian employers to NOT take the black market pathway and to instead hire workers legally on proper contracts with proper Filipino-based employers, giving such workers access to proper protections and inclusions but also protecting the Australian business from the reach of the Fair Work Commission.
3) Australian Workers: Clearly Australian workers are winners with this decision. This decision closes a loophole that had effectively given employers an end-game run around where they could avoid any accountability to their employees by just paying offshore via wire transfer, still using pro forma invoices so as to claim a business tax deduction. Sure, Australian firms can still place jobs offshore, but now they are being told they have to do so legally and they need to include respect for workplace regulations when they do so.
4) Australian Business: Australia is the Lucky Country… but there is a reason we keep getting lucky. It is because we are a nation built on values and a sense of fairness. Everybody in Australia benefits from being in a society where there is a basic sense of goodwill, decency and fair play – whether they recognise it or not. If a cohort of businesses was to emerge where they gained sustainable competitive advantage by dodging something as fundamental as basic workplace relations regulations, then no Australian business could afford to be a part of a system that offered those protections. The law has to apply equally to everyone for it to be fair and sustainable.
I own and operate a firm that provides Australian businesses with access to Filipino talent, as well as Vietnamese and Malaysian, so you might be surprised this is my perspective. However, just because I live and work in South East Asia doesn’t mean I am not a proud Australian.
Australian businesses should engage with the South East Asian workforce. It is great for business, great for cultural exchange and great fun also. But, when we operate in South East Asia we need to remember the values that make us who we are as Australians.
We need to engage lawfully and respectfully, we need to ensure our workforce has a sense of personal dignity in the workplace, we need to remember we are neighbours and we are all in this together.
Pascua v Doessel is a great decision that sets everybody up for a win. Joanna Pascua is a hero and should be applauded.
About Flat Planet:
Established in 2010, Flat Planet® is a family-owned, Australian-operated leading provider of high-value outsourced staffing solutions. Connecting businesses worldwide with skilled talent in Southeast Asia, offering a competitive edge through cost-effective, high-quality staffing solutions. With offices in the Philippines, Vietnam, and Malaysia, we employ over 400 staff serving global clients. Our state-of-the-art infrastructure and blend of local and Australian management practices ensure excellence in service delivery. At Flat Planet, we’re committed to creating pathways to a brighter future – not only by providing businesses access to a globally competitive workforce but also by supporting initiatives like our Gift of Life project, which funds critical heart surgeries for children in need.
For more information on how Flat Planet can empower your business while making a positive impact, visit flatplanet.com.au or email us on info@flatplanet.com.
