[EP 022] Out of Sight, Out of Mind? The agreements you need for your offshore staff

Hi there. It's Joanna here and welcome back to talking law! Today I'm answering a listener question. The listener question today comes in from George. George says, "I have a question about putting together contracts for Filipino and offshore workers. I've been reading about grants and I believe that I need to have a contract in place. For me I see contract as being more about a formality than something that needs to be acted upon if breached. I wouldn't really go down that route. What do you suggest for me in terms of contracts?" says George. Great question, George!


Why do I need contracts in place for offshore workers?

Let’s talk today then about the concept of having contracts in place for offshore workers. It’s a really good question because many organisations engage in contracts with onshore and offshore workers.

There’s many good reasons why you need solid contracts in place when you’re dealing with onshore staff whether or not that’s employees or contractors. But there’s also just many good reasons for having in place agreements with offshore staff.


Today we’ll talk about that concept and why you should have offshore staff agreements in place in the first place even though it isn’t necessarily needed to protect you in the regulatory environment that you have to deal with for onshore staff in Australia and in many other jurisdictions as well.

Firstly, WHY? Why should we have offshore staff agreements?

To set out the terms of the relationship

Offshore staff essentially are part of your team and if you view contracts as I do, then you view contracts as the opportunity for you to set out the terms of the relationship from the beginning rather than contracts being this document that you’re only using as a tick-a-box exercise for the purposes of government grants if that’s what it relates to or for the purposes of stopping someone from doing something that is contrary to the agreement. So I see documents particularly with staff as the opportunity for you to set the terms of your relationship from the beginning and talk about things that relate to your relationship in working together that you may not always think of to discuss if it wasn’t for the fact of putting together a contract.

The other reasons that I think that these agreements are particularly important is essentially because offshore staff are as much a part of your team as staff you sit with in the office. So you should use the same protocols for offshore staff as you do for your onshore staff.

Often businesses treat employing and onboarding offshore staff with less rigor than they do apply to onshore staff. And the problem with this is that you have a divided approach. You have an approach where often business owners spend a lot of time onboarding onshore staff but not the same amount of time onboarding their offshore staff and wonder why they get different results from onshore versus offshore teams.

I think often this comes back to the amount of time that is spent in developing that relationship and setting up these contracts from the beginning really help to get very clear when you’re sitting in the role of setting up these staff members who are offshore and getting really clear about what your expectations are of how it is that you work together with these staff members and what you expect from them from the role so that they also have an understanding of the expectations of the business from them. So contracts help you to spend time getting clear about these expectations which I think is a great thing.

To assign intellectual property upon creation

Having agreements in place with offshore staff also helps for other reasons. If for example you’re a creative type agency or if you create things for clients, often intellectual property will end up being transferred to clients or other parties on the basis of what’s created. If you don’t have the right chain of ownership in place then you might be committing to transferring intellectual property to clients that you actually don’t own. Because remember, as I’ve talked about in podcasts before, the baseline line position is that staff that are employed or engaged as employees the underlying position is that intellectual property assigns upon creation if the creation is part of the role.

But when you’re dealing with contractors, there has to be an actual assignment for that to happen and whether or not you’re calling your staff employees, contractors, personnel, staff (whatever you’re calling them) it’s very important that you have in place something that specifically assigns the intellectual property from what they are creating to your organization if you are on transferring that intellectual property to clients or third parties.

It also helps keep you compliant with obligations you have with your clients. It also helps if the business is ever sold so often when buyers are coming in to purchase business. They will be very interested to see what things you have in place to protect that organisation and what documents you have in place to protect the organization and agreements with all of the personnel is really a factor that they will take into consideration.

To protect the business from risks

And finally, generally agreements help protect against business risk agreements with offshore staff are exactly the same. We have these agreements in place to protect against risk as well as all of the other great reasons we talked about before. Let’s get on to them talking about what it is I think should be covering off in these agreements.

The first thing to think about is getting clear in this agreement about the roles responsibilities and expectations, what are the accountabilities that you have for the staff member that you are putting in place and what are the standards of the company that are important to communicate to this staff member.

Often businesses will have these sorts of standards contained within organisational policies and procedures. But if you don’t have that in place then the contracting agreement is a great place to put these sorts of things.

Another area that you want to look at considering is intellectual property assignment. As I spoke about before in an organisation where you are passing over intellectual property, either to clients or to other third parties. It’s absolutely critical that you have an IP assignment clause in place and even if you don’t think that you’ll be providing intellectual property to third parties it’s a very good idea to have this clause in place just in case things that are being created for that organisation do have an intellectual property background.

Make sure to have moral rights release and confidentiality clauses

The other thing that you want to have a think about in terms of intellectual property is making sure that you have a moral rights release clause. That’s something that should be added there for abundant caution in case you have staff who are creating copyright based materials.

The other thing that you want to think about including is confidentiality. So you want to have a confidentiality provision that relates to dealing with any client information in a confidential way. And you need to be really clear about what that information comprises of and what they can’t do in relation to that information. And you also need to make sure that these confidentiality clauses a broad enough so that they extend to the information of the business as well as the information of the clients. Confidentiality is something you need to make sure you have ticked off in the agreement with these staff members.

Non-solicitation clauses are a must

Another area you should consider including is non-solicitation clauses so non-solicitation clauses are essentially clauses that say they won’t take clients when they leave or during the period that they’re engaged with your organization and that they won’t take other staff members because we’ve all heard of situations of staff leaving an organization only to take then a number of other staff members along with them at a later date. So if you have these non-solicitation provisions that restrain the taking of other staff members for a period of time after the exit of that particular staff member then you’re protecting yourself.

What about issues with jurisdiction?

And of course I guess the one thing that I should add to all of this is that it can be quite difficult to enforce agreements across jurisdictions. Many people say to me “Look I can’t see any point in putting together an agreement with an organization in another jurisdiction or with staff members in other jurisdictions because it’s difficult to enforce and, in any event I wouldn’t bother taking them to court or litigating.”

My answer is that even if you don’t intend to sue them in their jurisdiction it’s really a great idea to be clear from the outset about what your expectations are about what staff members will and won’t do within your organization. I believe it doesn’t matter where your staff members reside. It doesn’t matter the jurisdiction issues that apply. That’s not a reason for not being clear from the outset about the expectations the obligations and the standards that you expect.

Set up agreements on termination

And one other thing I guess that we should always make sure we add to these agreements is termination.

Be really clear so that it’s fair for your staff members so that they understand what period of termination is required within your organization both in terms of notice that they have to provide to you. And on the flip side notice that you agree to provide to them.

What if you’re in a hurry and you can’t be bothered. You just don’t have the time. You’re really trying to recruit quickly and you don’t have the time to put an agreement in place because this is something that I hear many times.

I think that this is a reality for all businesses. Yes, we’re all busy. We’re all running as quickly as possible. And yes it can take time sometimes put these agreements in place. So what you can do about that is make sure you have your template in place before you go about the hiring process so that you have a quick and easy way to create an agreement each time you engage a new staff member. You simply go to your templates recreate it add in the role responsibility and expectations of the staff member before you engage them and hey presto here’s your agreement.

Of course that does require knowing at the outset the role responsibility and expectations this sometimes can be fluid and can change over time which is fine. The agreements can be built to enable this fluidity. And indeed I would encourage a review period to be added into the agreements so that you can build on the roles and responsibilities over time. But forcing yourself to go through the process of thinking through clearly the roles and responsibilities that you want to assign to this new staff member I think is an important step before engaging a new staff member whether they are onshore or offshore. So I think the fact that they’re offshore doesn’t at all change the fact that you need to ensure that you are getting what you require out of the relationship with your staff member. And they need to be able to understand what it is that you require out of that relationship. So it’s only fair from both perspectives that you have clearly thought about this and then added it to your agreement before you engage them or before they start.

How about admin staff?

What if as I’ve heard many times your contractors are administrative and so therefore some of the things that I’ve talked about are less relevant. Yes, that’s true. Perhaps from an admin perspective they may be less relevant of IP assignment clauses or moral rights release clauses. But things like confidentiality, non-solicitation, termination, roles, responsibilities and expectations, standards of the company.

All of these things will still be applicable no matter what the role is that you’re filling. And you may very well find that a staff member who is engaged in an admin capacity initially might move to other areas of the business in the future and a trip for businesses is forgetting to update agreements accordingly. So the best thing is to have an agreement in place in the beginning that covers off the options for how the role may expand into the future in terms of the sort of protections you want in place like for example IP assignment clauses.

What if English is not their first language?

What if your contractors don’t have English as their first language which can often happen if we’re dealing with contractors who are offshore. I think the most important thing in agreements is to ensure that the agreements are understood readily by the parties that you give them to.

So in this case if you think that you’re dealing with staff who may not understand the information in contracts if it’s complicated then just ensure that it’s simple make sure it’s written in a plain English manner so that it’s simple and easy to understand because there is no point having a contract in place that you send over that your staff members simply sign without reading because then that takes away the whole point of the agreement as I’m talking about it.

Action Steps

  1. Firstly, get clear about the roles, accountabilities, responsibilities and your expectations before you hire.
  2. Then make sure you put in place a clear document that sets out and covers these areas and all of the other important areas that I talked about today.
  3. And then finally make sure you get it signed and you get a copy on file and if you have an employee that exits the business then your last action step is to ensure that you have some sort of exit interview with that staff member in which you remind them of any obligations that are important post termination of their engagement with you.

That’s it. That’s a very quick synopsis of the reasons why we might want to have agreements in place with all staff no matter where they’re located whether they’re in your business office or outside of your business office and the sorts of things that we should have in these agreements with our staff.

So if you would like more information about this topic head over to our website at www.talkinglaw.com.au for a free download of this transcript. There you’ll also find details of how to contact our lawyers at Aspect Legal. If you’d like help with any of the items we covered today. And finally if you enjoyed what you heard today please pop over to iTunes and leave us a review. Thanks again for listening in! You’ve been listening to Joanna Oakey on Talking Law and we’ll talk to you next time. Thanks. Bye.