Australian-based COO sues overseas employer for dismissal claim

Commission settles dispute if executive is protected under FW Act

Australian-based COO sues overseas employer for dismissal claim

The Fair Work Commission (FWC) recently dealt with a dismissal claim from a company COO who was employed by an overseas employer.

The worker filed an application to the FWC, alleging that his dismissal violated the general protection provisions of the FW Act. His employer is a law firm that was incorporated in Papua New Guinea (PNG).

His position asserted that the Commission has jurisdiction over his application due to several factors:

  • He resided and primarily conducted his work in Australia during his employment;
  • He engaged in business activities and networking on behalf of the employer within Australia, representing the company at conferences held in the country;
  • The employment relationship was substantially linked to Australia, signifying a significant connection.

Worker resides and performs corporate functions in Australia

He argued that, given these circumstances, he was considered “a national system employee,” adding that the employer was “a national system employer” governed by Australian labour laws.

The employer operates in the insurance sector, providing insurance products across various Pacific markets. While the company is headquartered in PNG, some of its senior management resides in Australia.

Additionally, its CEO is an Australian citizen based in PNG. Several board members are also based in Australian cities like Cairns and Brisbane.

The worker, a Queensland-based Australian citizen, initiated discussions with a recruiting agency around November 2020.

The worker was interested in the Chief Operating Officer (COO) position but informed the management that he was unwilling to relocate to PNG.

Around August 2021, the recruiter reapproached the worker, indicating that the COO position was open for recruitment. He then had discussions with the employer to negotiate the terms of his employment contract.

Acceptance of employment offer

He made it clear that his acceptance of the employment offer was contingent on his ability to work predominantly in Brisbane, with occasional travel to PNG as required.

In addition to his routine responsibilities, he performed various activities, including:

  • Meetings with board members in Brisbane;
  • Interactions with the CEO during his visits to Brisbane;
  • Consultations with external consultants and suppliers of the employer;
  • Meetings with Brisbane-based clients to bolster business referrals;
  • Attendance at educational forums in Brisbane on behalf of the employer;
  • Participation in conventions; and
  • Interactions with potential clients and local insurance brokers.

Is the COO protected from dismissal under the FW Act?

According to records, the worker said that there is “a sufficient connection” between him and the employer’s employment relationship and Australia, considering:

  • He was recruited in Australia by Australian recruiters;
  • The employment relationship was negotiated while he lived in Australia, was ‘formed in Australia and was terminated while he was in Australia;
  • His primary place of work was at his home office in Australia;
  • He spent only 89 days working at the PNG office and 149 days working in Brisbane;
  • The employer employed, paid and authorised him to conduct business and represent its interests in Australia, in addition to PNG and other Pacific markets.

Worker’s ‘personal circumstances’ vs. ‘contractual arrangement’ with employer

The FWC said that “while it ultimately eventuated that the worker spent more time in Australia than he did in PNG, this was largely due to personal circumstances.”

“It was not reflective of the contractual arrangement entered into at the commencement of the employment,” it added.

It said that there is no “appropriate connection linking the employment relationship with Australia,” basing it on the following grounds:

  • He agreed to perform 50% of the work from PNG, later increasing to 70%;
  • He was not paid in Australian currency;
  • He agreed that he would not be entitled to superannuation in Australia;
  • He understood that a workers’ compensation policy in Queensland would not be taken out by the [employer] and that any workplace health and safety matter would be covered by an international policy taken out by the employer;
  • He never pressed for the provision of a motor vehicle in accordance with the employment agreement because he knew that one was not provided by the employer in Australia; it was only provided in PNG;
  • The work performed by him in Australia relating to Australian contacts and insurance opportunities was incidental to the work he performed in Australia and PNG in respect of PNG contacts and insurance opportunities. That is the principal purpose of his employment was the generation of PNG opportunities; and
  • His communication (via PNG lawyers) to [the employer] prior to his dismissal threatened actions in a PNG court, citing reliance on particular PNG statute–an avenue not available to employees performing work in Australia unless they consider they have a right to protection from relevant PNG court.

Ultimately, the Commission said their employment relationship has no "sufficient connection" with Australia, and therefore, it ruled that the firm is not a national system employer.

It consequently dismissed the worker's application.

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