Converting From Casual to Permanent Employment
In 2024, the federal government passed the Fair Work Legislation Amendment (Closing Loopholes No 2.) Act 2024. This Act made various changes to employment laws that affect casual workers, principally, how casual workers can convert to permanent employment. This page outlines those changes.
Who is a casual employee?
A person is a casual employee if:
- They are in an employment relationship characterised by an absence of firm commitment to continuing and indefinite employment
- They would be entitled to casual loading or casual rates of pay under the terms of a fair work instrument if they were a casual employee, or they under entitled to loading or casual rates of pay under a contract.
In assessing whether a worker is a casual worker, the following matters may be considered:
- The practical reality of the employment relationship
- Whether there is a mutual understanding or expectation between the parties of ongoing work
- Whether the employer can choose to offer or not to offer work, and whether the employee can choose to accept or not to accept work
- Whether it is likely that there will continuing work available in the future
- Whether there are full time or part time employees performing the same type of work
- Whether there is a regular work pattern.
Casual employees may give notification
Under section 66AAB of the Fair Work Act 2009, if casual employee believes that their work arrangements no longer meet the definition of casual employment, they may give their employer a written notification to this effect. A casual employee is eligible to use this process if they have been employed for at least six months (or if they are employed by a small business, for at least 12 months).
The employer must respond to the notification within 21 days. The employer may accept the notification or refuse to accept the notification.
If the employer accepts the notification, it must inform the employee of:
- whether they are changing to full-time or part-time work
- their hours of work after the change takes effect
- the day the change takes effect.
An employer may refuse to accept a notification on one or more of the following grounds:
- The employee still meets the definition of a casual employee
- There are fair and reasonable operational grounds for not accepting the notification
- Accepting the notification would result in the employer not complying with a selection process required by law.
Consultation
Before responding to a notification, an employer must consult with the employee and discuss any arrangements that are being considered as to full-time or part-time work, the hours of work, and the date the change would take effect.
Where no agreement is reached
If parties cannot agree as to whether it is appropriate for a casual employee to convert to permanent employment, either party may apply to the Fair Work Commission (FWC). The FWC will try to resolve the dispute informally and if this is not successful, it may arbitrate the dispute and make a binding decision.
What has changed?
Before the Fair Work Act 2009 was amended, employers were required to offer casual workers the option of converting to permanent employment after 12 months of service provided certain criteria were fulfilled.
The new system introduces an employee choice pathway, where casual employees may initiate the conversion to permanent employment. Employers may still initiate a conversion to permanent employment by offering an employee this option if they choose to do so.
The change came into effect for most employers on 26 February 2025. It comes into effect for small businesses on 26 August 2025.
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