Offshoring talent, particularly through DIY offshoring, has long been seen as a cost-saving move for Australian businesses, but a growing string of legal developments is changing the landscape.
Eight months ago, a LinkedIn post circulated through the Australian business community with a clear warning:
“Independent contractors in the Philippines are no longer a safe haven from the Australian IR system.”
That warning referenced a Fair Work Commission decision where a home-based Filipino paralegal filed an unfair dismissal claim against an Australian employer despite working offshore and being labelled as an “independent contractor.”
Some business owners dismissed it as a one-off case.
But in June 2025, ABC News confirmed that the full bench of the Fair Work Commission had upheld the claim. It ruled that the Filipino paralegal was, in substance, an Australian employee and should be afforded the same protections.
The outcome?
- • She was paid AUD 18/hour, but should have been earning AUD 24.87/hour
- • She was awarded back pay, leave entitlements, and unfair dismissal protections
The Commission based its decision on the actual working relationship: fixed hours, KPIs, use of internal systems, and limited autonomy. In short, the worker looked and functioned like an employee, so Fair Work treated her as one.
The Hidden Risks of DIY Offshoring
Offshoring might seem simple at first: labour is cheaper, remote work is accessible, and hiring talent directly feels flexible.
But doing it without legal, compliance, and HR safeguards leaves your business wide open.
Here’s what you’re really risking:
- • Worker misclassification – Calling someone a contractor doesn’t hold if they function like an employee
- • Wage violations – The Filipino paralegal was underpaid by nearly AUD 7/hour under the Commission’s ruling
- • Legal liability – You could face back pay, penalties, or unfair dismissal claims
- • Operational issues – Payroll errors, benefits confusion, or poor retention
- • Reputational damage – No business wants to make headlines for mishandling offshore workers
Why Aussie Businesses Still Try to DIY
It’s not that business owners are reckless. Most DIY offshoring starts with good intentions:
“We just needed help fast.”
“We couldn’t afford another Aussie salary.”
“It was only supposed to be a trial.”
But intent doesn’t matter in employment law. The Fair Work Commission focuses on how the relationship works in practice: who sets the hours, who controls the work, and whether the worker relies economically on you.
Even informal or short-term setups can lead to long-term liabilities.
Real Costs Behind the “Savings”
DIY offshoring might feel cost-effective in the short term. But when things go wrong, the cost of fixing legal, operational, or reputational damage far outweighs the savings.
Here’s what it could cost you:
- • Legal exposure: Back pay, unpaid leave entitlements, penalties, or lawsuits
- • Compliance complexity: Navigating two sets of employment laws without support
- • Productivity risk: High churn and low engagement from unsupported remote workers
- • Brand damage: No one wants their business in the news for mishandling employment relationships
And worst of all? You carry the full weight of these risks alone.
In the case mentioned, a nearly AUD 7/hour underpayment added up quickly. And that’s before penalties and legal costs.
DIY Offshoring vs. A Trusted Workforce Partner
Rather than tackling offshoring blind, more Australian businesses are turning to managed service providers like PeoplePartners who handle offshore hiring legally, ethically, and end-to-end.
Let’s break it down:
| Aspect | DIY Offshoring | Trusted Offshoring Partner |
| Legal Compliance | High risk of misclassification | Built on local and international employment law |
| Payroll & HR | Manual and error-prone | Fully managed, compliant, and localised |
| Benefits | Often skipped | Provided in line with local standards |
| Worker Experience | Isolated and unsupported | Onboarded, engaged, and retained |
| Business Risk | You carry it all | Partner shares and manages risk |
Your offshore team doesn’t have to be a liability. With a partner like PeoplePartners, they become a growth asset.
How PeoplePartners Keeps You Protected
At PeoplePartners, we combine Australian business sensibility with deep expertise in Philippine employment law. Our fully managed solution takes the guesswork and the risk out of offshore hiring.
Here’s how we support your business:
- • Compliant hiring and employment contracts in both jurisdictions
- • Ongoing HR support: performance management, engagement, retention
- • Localised payroll and benefits administration
- • Legal and compliance oversight aligned with Australian standards
- • ISO/IEC 27001:2022 certification for data security and operational peace of mind
We don’t just help you hire. We help you scale with confidence.
Book a free discovery call to learn more.
Why Australian Businesses Choose PeoplePartners Over DIY Offshoring
When it comes to building offshore teams, trust matters. These business owners have been where you are: weighing cost, compliance, and risk. Here’s why they chose PeoplePartners, and how it’s helped them grow with confidence.
1. Compliance Without the Headache
“They’re basically our offshore HR department.”
Will Swayne – Broker Engine
“On the day-to-day, PeoplePartners manages all our payroll and HR matters, complying with Philippine law. The team there are very involved — from putting job ads out up to onboarding staff and managing payouts. It’s kind of like a pretty full-serviced operation.”
2. Affordable Without Compromise
“We got offshore support without the big fees.”
Matt Peachey – The Learning Resources Group
“Partnering with PeoplePartners takes a lot of pressure off… without having to pay a huge fee, because you can do that domestically, but the cost on that is ridiculous and prohibitive.”
3. True Partnership, Not Just Labour Supply
“They’re invested in our growth, not just the contract.”
Alexis Watt – Skilled Advisory
“It’s in PeoplePartners’ name, right? They’re partners, not just a labour supplier. They’re motivated by your business improving.”
4. Flexible Models That Fit Your Business
“They nailed the hybrid solution we needed.”
Julie Rice – Redmako Learning
“They’ve managed to find the perfect set of solutions to support small, medium and enterprise business by combining the best of both worlds – work from home AND off-shoring.”
5. Security and Support Where Others Fall Short
“Other BPOs couldn’t match their quality and care.”
Kieran Carrigan – TutisVreddo
“I had spoken to a number of BPOs, but they were either too expensive or didn’t have sufficient security and monitoring protocols. PeoplePartners have really delivered for us.”
See what our partners say about working with us.
What the Ruling Means for Your Business
This isn’t just a one-off case. It’s a sign of what’s coming. More offshore workers are aware of their rights, and more legal systems are recognising the reality of remote work arrangements.
Ask yourself:
- • Does your offshore worker report to you directly?
- • Do you control their tools, schedule, and deliverables?
- • Are they integrated into your operations like local staff?
If yes, then you may already have an employment relationship, whether you’ve formalised it or not.
Why It Matters Now More Than Ever
The offshore world is changing. Remote talent is no longer invisible to Australian regulators, and the line between contractor and employee is thinner than ever, especially when your team works full-time, uses your systems, and follows your direction.
What used to be a grey area is now under scrutiny.
Instead of scrambling when something goes wrong, build a future-proof solution from day one. With a partner like PeoplePartners, you’re not just hiring overseas. You’re building a compliant, ethical, and resilient global team.
Protect Your Business and Your People
Let this recent case serve as more than a headline. Let it be the cautionary tale that spares your business from costly mistakes.
You don’t have to navigate this alone. PeoplePartners is here to help you build remote teams the right way: with heart, with compliance, and with a structure built for growth.
