The Pascua Wake-Up Call: This Outsourcing Mistake Could Cost You Thousands
In a decision that’s sending shockwaves through Australian business circles, the Fair Work Commission has ruled in favour of Joanna Pascua, a Filipino virtual paralegal who successfully challenged her termination under Australian workplace laws — despite never having set foot in the country.
The ruling is a wake-up call for financial advisers and SMEs that hire offshore staff as “contractors,” assuming that distance equals protection. It doesn’t.
According to the ABC’s report, Pascua’s working conditions mirrored that of a typical employee: fixed hours, core tasks, and close supervision. That was enough for the Commission to declare her eligible for the same workplace protections as an Australian worker. But she was hired as an independent contractor — a setup the Commission found resembled sham contracting.
If you’re outsourcing — or planning to — the message is clear: you need a compliant structure, or you’re at risk.
Misclassification Risk: Why Pascua's Case Matters to You
Many firms hire offshore staff under the assumption that “they’re overseas, so Australian laws don’t apply.” But the Pascua decision dismantles that idea completely.
If your offshore team:
- Works set hours
- Performs core functions
- Reports directly to you
… then legally, they might be your employee — no matter where they are.
Engaging them as independent contractors under these conditions may constitute sham contracting, a breach of the Fair Work Act that carries serious penalties. The law looks at the nature of the relationship, not the label you apply — and misclassifying employees can expose your firm to significant legal and financial risks.
That opens you up to:
- Unfair dismissal claims
- Superannuation obligations
- Penalties for misclassification
- ATO and international tax complications
ASIC Is Watching Too: Regulatory Pressure on Outsourcing
This case lands alongside rising regulatory concern. ASIC’s 2024–25 Corporate Plan highlights outsourcing, data risk, and third-party governance as core focus areas.
As Professional Planner explains in “Why Outsourcing Is on ASIC’s Agenda This Year”, licensees are still fully responsible for the compliance, conduct, and risk controls of their offshore providers.
And according to Adviser Ratings, offshoring is accelerating — with more advisers delegating admin and paraplanning roles. But that increase in volume comes with increased accountability.
Solution: Employer of Record (EOR)
So how do you get the benefits of offshore support without the legal and regulatory risks?
By working with an Employer of Record (EOR).
An EOR becomes the legal employer of your offshore team. You manage their day-to-day work. They manage:
- Payroll and tax
- Contracts and compliance
- Statutory benefits
- Labor law obligations
The result?
- You reduce legal exposure
- You meet Fair Work expectations
- You align with ASIC’s third-party governance guidelines
You protect your business from misclassification claims
What About Data Security?
If your offshore team handles sensitive client information, your outsourcing model must be secure by design.
That’s why best practice is to choose an EOR that follows ISO 27001 — the global standard for information security. It helps ensure
- Data is protected against breaches
- Systems are independently audited
- You remain compliant with OAIC and ASIC standards
Advice2Talent: The EOR Built for Financial Advisers, Accounting Firms, and Mortgage Broking Practices
At Advice2Talent, we specialise in helping Australian financial advice firms scale through compliant, secure, and professional offshore staffing.
We are an Employer of Record based in the Philippines — but built around Australian legal, compliance, and data expectations.
- We hire and legally employ your offshore team
- We offer fixed, transparent fees — no surprises
- We follow ISO-aligned security practices
- We support admin, paraplanning, and client service roles
- We handle the red tape — you manage the work
Whether you’re hiring your first VA or replacing a risky contractor arrangement, Advice2Talent helps you do it the right way.
Final Thoughts: Offshoring Isn’t Over — But the Old Way of Doing It Is
The Pascua case makes one thing crystal clear: distance doesn’t protect you from legal responsibility.
Outsourcing is still one of the most powerful tools for growth in advice firms — but only when it’s backed by structure, compliance, and proper governance.
With an EOR like Advice2Talent, you get everything you want from outsourcing — without the stress, legal exposure, or guesswork.
Ready to build your offshore team without the compliance risk? Book a free discovery call with Advice2Talent today and let’s explore how we can help you grow safely, legally, and confidently.
Sources:
- ABC News, “This Filipino woman struck a blow against Australian businesses ‘exploiting’ offshore workers”, June 2025.
- Professional Planner, “Why Outsourcing Is on ASIC’s Agenda This Year”, November 2024.
- Adviser Ratings, “A Hard Day’s Plight: Financial Advisers Face Outsourcing Dilemma”, May 2024.