Can the Fair Work Act apply to foreign companies?

The Fair Work Act 2009 (Cth) (FW Act) creates rights and obligations for national system employers. A national system employer includes a foreign corporation provided it has sufficient connection with Australia. That connection can be established so far as the company or its employees are concerned.

How to determine whether there is sufficient connection

In determining whether there is sufficient connection, the focus is on the employment relationship and whether there is an appropriate connection linking the employment relationship sufficiently with Australia.

Relevant factors include:

where the employment contract was made;
where the payment of wages is made;
what laws govern tax, social security and other liabilities; and
where the work is performed.

Fair Work Commission considers the issue of sufficient connection

In Shehzad v WorleyParsons Engineering Consultancies Co (2025), the Fair Work Commission (FWC) had to consider whether an employee of a Saudi company, which was a subsidiary of an Australian company, was a national system employee.

To make its determination, the FWC took into account the following:

The employee required a visa to perform work in Saudi Arabia.
The employee agreed to perform work in Saudi Arabia, with his employment contract to be governed by the laws of Saudi Arabia.
The employee was paid in the local currency into his bank account, with relevant deduction of local taxes.
The employee resided in Saudi Arabia and was paid a living allowance to ensure he had adequate accommodation in the locality he was required to work. The living allowance also provided adequate payment for personal expenses, e.g. for the employee to travel and to eat.
The employee sometimes worked with Australian citizens in Saudi Arabia and did a small portion of work on Australian bids.
The employee was not entitled to superannuation, which is paid in Australia to workers performing work in Australia. He would also be unable to nominate in which state or territory jurisdiction he would have been employed for the purposes of workers’ compensation insurance and payroll tax.

On this basis, the FWC ruled the employee had failed to demonstrate an appropriate connection linking the employment relationship with Australia. Therefore, the employer was not a national system employer of the purposes of the FW Act.

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