Philippines: Navigating Employment Dynamics Across Borders

Authors: Lawrence Ivan Manalo and Danella Diane D. Dimapilis

The rise of virtual work continues to transform the landscape of modern employment.

While Filipino workers are no strangers to global integration, the increasing availability of digital and remote work opportunities has afforded them entry to newer lines of work. Filipinos now provide services in information technology, finance, creative design, marketing, customer support, legal assistance, and engineering.

This borderless employment offers remarkable flexibility and opportunities for income generation, allowing workers to participate in the global economy, even without leaving their homes. These advancements have enabled virtual workers to now contract with foreign clients without the involvement of local intermediaries.

This, however, also entails the spillover of risks across borders. While the walls of the workplace have been blurred, issues like jurisdictional limits, conflicts of law, and industrial relations disputes, at their core, remain. It also results in cross jurisdiction challenges as labour standards, control tests, and dispute resolution mechanisms vary across different legal systems, but remain anchored therein.

Relevantly, with respect to claims, a virtual worker may encounter significant challenges in commencing and enforcing claims before a foreign client, especially those with no local presence.

These realities may explain why some workers choose to assert their rights directly before foreign agencies. The decisions in Joanna Pascua v Doessel Group Pty Ltd and Doessel Group Pty Ltd v Joanna Pascua before the Australian Fair Work Commission (the “Commission”) provide a useful illustration. Ms Pascua, who is based in the Philippines, formerly rendered work remotely as a paralegal for an Australian entity. Following her dismissal, she commenced actions before the Commission to assert her status as an employee and challenge the validity of her dismissal. Both the single-member panel and the Full Bench of the Commission, applying Australian law, ruled in her favour and recognized that she was an employee, not an independent contractor, and that she had been unfairly dismissed.[1]

Philippine tribunals have also taken jurisdiction of claims filed by foreign employees against local employers. In Pacific Consultants International Asia, Inc. vs. Schonfeld, the Philippine Supreme Court recognized that the commencement by Mr. Jens Peter Henrichsen of his claims against his local employer was proper. In rejecting his employer’s challenge to venue of suit based on forum non conveniens, the Decision ruled that the bare fact that Mr. Henrichsen is Canadian does not support  the application of the principle, and that Philippine courts may assume jurisdiction over the case if it chooses to do so; provided, that: a) that the Philippine Court is one to which the parties may conveniently resort to; b) that the Philippine Court is in a position to make an intelligent decision as to the law and the facts; and, c) that the Philippine Court has or is likely to have power to enforce its decision. [2]

These developments demonstrate that cross-border employment engagements create exposure in more than one legal system. Faced with jurisdictional challenges attached to commencing and enforcing claims locally, workers now are also empowered to initiate claims in the country where the establishment is based. A foreign tribunal may apply its own standards on employment status, control, and termination which, while sometimes overlapping with Philippine requirements, may result in a ruling that differs from the Philippine interpretation.

This risk of exposure in multiple territories makes it essential for establishments to ensure that the structure of the engagement complies with both Philippine rules and the legal requirements of the foreign jurisdiction. Compliance with the requirements of only one system leaves significant residual risk because workers may pursue their claims in the other.

Global employment now requires a more holistic approach which recognizes that rights, obligations, and risks transcend geographic boundaries.

The complexity of these matters underscores the need for coordinated advice from Philippine and foreign counsel. Establishments and workers who participate in cross-border engagements need, among others, clear documentation and properly defined control mechanisms, that comply with the legal standards of both jurisdictions. These measures support lawful engagement and reduce misclassification risks.

Such collaborative legal guidance enhances operational stability by helping establishments align their compliance posture and also ensure that risks are kept to a minimum across relevant jurisdictions, ultimately fostering smoother and more predictable operations across jurisdictions.

[1]        Joanna Pascua vs. Doessel Group Pty Ltd, (FWC, U2024/3881, 2024); Doessel Group Pty Ltd v Joanna Pascua, (FWC Full Bench, C2024/7389, 2024).

[2]        Pacific Consultants International Asia, Inc. v. Schonfeld, 545 Phil 116-137 (2007).