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Meaning of Australian based employer and Australian based employee

11 January 2020

The meaning of Australian employer and Australian based employee is important because it determines whether an employee can make a claim under employment legislation.

Jurisdictional claims

Specifically, the meaning of Australian based is important for a jurisdictional claim.

For example, whether a court has jurisdiction (the authority) to deal with a particular matter. 

Employee claim

For example, an employee may claim they are an employee for Fair Work purposes like an unfair dismissal claim and because of this, Fair Work has jurisdiction to deal with the employee's claim.

Employer response

On the other hand, an employer may claim an employee is not Australian based and is not eligible to make a claim about their employment with the Fair Work Commission. By doing this, the employer is raising a jurisdictional objection.

Below is the definition of Australian based employer and employee.

FAIR WORK ACT 2009 - SECT 35

Meanings of Australian employer and Australian-based employee

(1)  An Australian employer is an employer that:

(a)  is a trading corporation formed within the limits of the Commonwealth (within the meaning of paragraph 51(xx) of the Constitution); or

(b)  is a financial corporation formed within the limits of the Commonwealth (within the meaning of paragraph 51(xx) of the Constitution); or

(c)  is the Commonwealth; or

(d)  is a Commonwealth authority; or

(e)  is a body corporate incorporated in a Territory; or

(f)  carries on in Australia, in the exclusive economic zone or in the waters above the continental shelf an activity (whether of a commercial, governmental or other nature), and whose central management and control is in Australia; or

(g)  is prescribed by the regulations.

(2)  An Australian-based employee is an employee:

(a)  whose primary place of work is in Australia; or

(b)  who is employed by an Australian employer (whether the employee is located in Australia or elsewhere); or

(c)  who is prescribed by the regulations.

(3)  However, paragraph (2)(b) does not apply to an employee who is engaged outside Australia and the external Territories to perform duties outside Australia and the external Territories.

Case study

Application of section 35 - Meanings of Australian employer and Australian-based employee

In the case of Mr Nabor Fuentes v Department of Foreign Affairs and Trade (U2017/13595), Fair Work found that Mr Fuentes was not an Australian based employee so unfair dismissal provisions in the Fair Work did not apply. 

Below are the key points in the case: 

  • It does not matter if a person is located in Australia or elsewhere, an employee that’s employed by an Australian employer is an “Australian-based employee’. 
  • Mr Fuentes falls within section 35(2)(b) below but is caught by the exception in section 35(3) below, that is, he was an employee ‘engaged outside Australia and the external Territories to perform duties outside Australia and the external Territories.’

Section 35(2) and (3) Fair Work Act 2009 (Cth):

(2)  An Australian-based employee is an employee:

(b)  who is employed by an Australian employer (whether the employee is located in Australia or elsewhere); or               

[3)  However, paragraph (2)(b) does not apply to an employee who is engaged outside Australia and the external Territories to perform duties outside Australia and the external Territories.

  • Mr Fuentes was hired in Canada to perform the duties associated with his role at the Australian High Commission in Ottawa. Also, Mr Fuentes’ employment agreement was signed in Ottawa. And, subsequent renewals of his contract occurred in Ottawa. And Mr Fuentes in fact performed his duties in Canada.

The finding meant that the unfair dismissal provisions in the Fair Work Act did not apply to Mr Fuentes and he was not able to bring an unfair dismissal application under the Act.

From the example above you can see that the meaning of 'Australian based' is important for employment claims in the Fair Work Commission.

Do you have questions or comments about whether an employee is Australian based? Be sure to leave them below. 


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Vivian Michael
 

Vivian Michael is a lawyer and founder of Michael Law Group. Vivian's mission is to deliver the best quality business legal services to entrepreneurs launching an Australian business, wherever they are in the globe.

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