Cross-border arrangement leaves dismissed worker without recourse despite year of employment
A payroll company processed wages, paid taxes, and handled insurance for a worker - but a tribunal ruled it wasn't his employer when he got fired.
The Fair Work Commission dismissed Jason Erdes' unfair dismissal claim against Oncore Consulting on February 6, 2026, in a ruling that exposes how employer-of-record arrangements can leave workers in limbo and companies facing unexpected liability questions.
Erdes worked as an Account Executive for Bluesheets, a Singapore-based software company, from March 2024 to May 2025. But Bluesheets never put him on its Australian payroll. Instead, the company hired Oncore Consulting to handle what it called "Super payments and salary disbursements" for its Australian employee.
Oncore did everything that typically signals an employment relationship. It paid Erdes' wages, issued payslips with its name as employer, withheld tax, sent superannuation to his fund, arranged workers compensation and professional indemnity insurance, and reported his wages in its payroll tax returns. His tax office records listed Oncore as the payer.
When Bluesheets cut ties with Erdes in April 2025 over performance concerns, he turned to Oncore claiming unfair dismissal. The payroll provider argued it was just processing payments, not employing him.
Commissioner Matheson examined what the Fair Work Act describes as the "real substance, practical reality and true nature of the relationship" under section 15AA, which was introduced in 2024 to look past contractual paperwork.
The case turned on who actually controlled the work. Bluesheets ran the recruitment process, conducted interviews, defined the role, supplied the laptop and email, managed performance reviews, approved leave requests, and made the call to end things.
Oncore never told Erdes what to do, never set his schedule, never assessed his work, and wasn't even consulted before the termination. The company just sent invoices to Bluesheets and processed payments when the money came through.
The commissioner called the arrangement "novel" and the contracts "confusing." What mattered was that Oncore "did not source or provide work for the Applicant" and Erdes had already locked in his job with Bluesheets before Oncore entered the picture. The payroll provider "did not in practice determine what the Applicant was to be paid in respect of his work" since Erdes and Bluesheets had already settled on terms. Most importantly, Oncore "did not in practice direct the Applicant's work activities or when and where he worked."
The decision states: "Having considered the totality of the relationship having regard not only to the terms of the contract governing the relationship, but also to other factors relating to the totality of the relationship including, but not limited to, how the contract is performed in practice, I find that the real substance, practical reality and true nature of the relationship between the Respondent and Applicant is not one of employment and the Respondent was not the Applicant's employer."
The commissioner described Oncore's termination email as "clumsy in its drafting" but said it merely notified Erdes that the payment arrangement was ending after Bluesheets pulled the plug.
The outcome leaves Erdes without options since Bluesheets operates beyond Australian jurisdiction and Oncore isn't his employer under the law.
Those managing distributed teams or using employer-of-record platforms should note that handling payroll and compliance functions doesn't automatically create an employment relationship. The decision suggests organizations need clear answers about where legal responsibility lands when one entity manages the work and another processes the payments, especially across international borders.
