When a “Contractor” May Really Be an Employee
Doessel Group Pty Ltd v Joanna Pascua [2025] FWCFB 52
Modern businesses increasingly rely on remote and offshore workers. In many cases, those arrangements are documented as independent contracting relationships. But as a recent Fair Work Commission appeal demonstrates, the contractual label is only the starting point. Where the substance of the arrangement points to employment, jurisdictional objections raised by employers may not succeed.
Background: Remote Work and the Jurisdictional Challenge
In the recent decision of Doessel Group Pty Ltd v Joanna Pascua (C2024/7389, 21 February 2025) (the Appeal), the Fair Work Commission Full Bench refused permission to appeal from an earlier decision dismissing a jurisdictional objection in an unfair dismissal matter.
Ms Pascua performed legal assistant and paralegal work for MyCRA Lawyers, a Queensland-based business, from her home in the Philippines. She commenced work under a written agreement dated 21 July 2022, titled “Independent Contractor’s Agreement”. The work involved legal research, drafting documents, case preparation, and following up clients by email and SMS during Australian business hours.
The relationship ended on 20 March 2024, when Ms Pascua was sent an email asserting breach of contract and termination. The employer’s jurisdictional objection was straightforward: if Ms Pascua was not an employee, she had not been “dismissed” for the purposes of an unfair dismissal application under section 394 of the Fair Work Act 2009 (Cth) (FWA).
The Arguments: Label vs. Substance
The Employer argued that the work was to be performed “solely as an independent contractor” and that no employment relationship was created. The contract contained provisions dealing with matters such as tax, workers’ compensation, and social security being borne by Ms Pascua, as well as indemnity provisions common in contractor drafting.
The Commission’s Analysis focused on the legal rights and obligations created by the written contract, rather than simply the label chosen by the parties. Key factors included:
- Nature of the Work: The duties involved administration and following up clients as part of another business, rather than work involving a profession, trade, or distinct calling associated with an independent enterprise.
- Control and Performance: Annexure A to the contract imposed detailed KPIs, including billable hour targets and completion of all assigned tasks on the same day. This indicated a significant degree of control and subordination.
- Integration: The use of the business’s phone systems, email domain, and paralegal designation supported the conclusion that Ms Pascua was working within the business.
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Personal Service: Ms Pascua was required to be available to perform the work personally. Any change to the nominated “key employee” required prior written approval, a strong indicator of a contract of service.
- Remuneration: The rate was described as “AUD$18 per hour Salary all inclusive as a Full Time Employee,” with weekly invoicing on an hourly basis regarded as more consistent with wages.
The Decision: Why the "Contractor" Label Failed
The Commission rejected the employer’s argument, treating the "independent contractor" label as carrying limited weight compared to the substantive rights and obligations. On appeal, the Full Bench affirmed several key principles:
- Written Contract Focus: Where rights and duties are comprehensively committed to a written contract, the characterisation task focuses on that contract.
- Labels are Not Determinative: The Full Bench expressly rejected the proposition that the repeated use of the term “independent contractor” resolved the issue.
- Substance of Enterprise: The question is whether the worker is, in substance, working in the business of the putative employer rather than carrying on their own enterprise.
- Two Separate Issues: The case is a reminder that offshore disputes raise two issues: whether the worker was truly an employee, and whether, if they were, the FWA applied to that relationship.
Key Takeaway for Employers
The Full Bench held there was no sufficiently arguable case of appealable error. The decision confirms that contractual control, subordination, remuneration structure, and the absence of genuine independent enterprise remain highly significant. For employers engaging remote workers outside Australia, the substance of the arrangement will always outweigh the chosen label.