Diving into the latest changes in casual employment

The new ‘employee choice’ pathway for converting from casual to permanent employment is now in effect for many Australian employers, following the introduction of the Fair Work Legislation Amendment (Closing Loopholes No. 2) Act 2024.

This amendment represents a significant shift in responsibility—moving the onus from employers to employees when it comes to initiating casual conversion.

Until February 26, 2025, employers were responsible for offering conversion to casual employees who met the relevant criteria. However, under the new framework, casual employees who believe they no longer meet the definition of a casual under the Fair Work Act 2009 can now make a formal request to convert to permanent employment. For small businesses, this change comes into effect from 26 August 2025.

Let’s take a deeper dive into these changes.

Redefining casual employment

The revised definition of a ‘casual employee’ under the Fair Work Act 2009 (Cth) came into effect on 26 August 2024.

This update aims to capture the true substance, practical reality, and overall nature of the employment relationship—moving beyond what is stated in the employment contract alone.

The change reflects outcomes from recent Federal Court and High Court decisions, which previously leaned heavily on the contractual terms. In practice, this meant that if a contract stated an employee was casual, they were likely considered casual regardless of how the relationship operated day-to-day.

Under the new approach, the key consideration is whether there is an absence of a firm advance commitment to ongoing, indefinite work. A range of factors are considered in making this assessment, including:

• Whether the employer has the discretion to offer or withhold work
• Whether the employee can accept or decline work
• The likelihood of future, ongoing work being available
• Whether other employees (full-time or part-time) are doing similar work
• Whether the employee has a regular and consistent pattern of work

Importantly, no single factor is decisive. For example, a regular work pattern alone does not automatically indicate that an employee is not casual.

At the heart of this assessment remains one core question: is there a firm advance commitment to continuing and indefinite work?

The ‘Employee Choice’ casual conversion process

The changes also introduce a new process for employees to convert to permanent employment, replacing the previous process where an employer had to offer conversion in certain circumstances.

Under the ’employee choice about casual conversion’ provision, an employee can notify their employer in writing that they believe they are no longer a casual employee and seek to convert to permanent employment.

There are several conditions the employee must meet – e.g.

• not being in a current dispute with the employer about casual conversion,
• having been employed for six months (or 12 months for small businesses), and
• not having received a response from the employer regarding a previous conversion notification in the past six months.

If an employer receives a written conversion notification, they must respond in writing within 21 days, stating whether they accept or reject the conversion notification. A refusal to convert can only be based on reasonable business grounds. The Fair Work Commission will have the power to arbitrate disputes about this casual conversion process.

Casual Employment Information Statement (CEIS)

Another key change is the requirement for employers to issue a Casual Employment Information Statement. Employers must provide this statement to casual employees:

• before or as soon as practicable after the employment starts,
• at six months of employment, and
• at 12 months of employment.

For employers, the next steps include:

• reviewing casual employment agreements and relevant policies and procedures,
• considering the practical relationship between casual employees and the business, and
• including the issuance of a Casual Employment Information Statement as a checklist item when engaging casual employees.

What to do when you receive a request for casual conversion

If an employee submits a request to convert from casual to permanent employment, employers must follow a set process to ensure compliance with the Fair Work Act 2009. Here’s a simplified guide to responding appropriately:

• Review the request: Check that the employee meets the eligibility criteria—such as being employed for at least six months (or 12 months for small businesses) and not currently involved in a dispute about casual conversion.
• Assess the relationship: Consider whether the employee still meets the definition of a casual worker. This involves reviewing whether there is a firm advance commitment to ongoing, indefinite work.
• Respond in writing: Within 21 days, provide a clear written response. If you accept the request, outline the next steps. If you decline, you must give valid business reasons for the decision.
• Communicate respectfully: Make sure the outcome—whether approval or refusal—is communicated clearly and respectfully, along with any next steps or options available to the employee.
• Keep records: Maintain detailed records of the request, your assessment, and your written response. These may be important if a dispute arises later.

Following this process helps ensure casual conversion requests are handled fairly, transparently, and in line with legislative requirements.

Grounds for refusal of casual conversion

Employers can lawfully decline a casual conversion request, but only on reasonable and justifiable grounds. Common reasons for refusal include:

• Irregular or inconsistent work patterns: If the employee’s hours remain unpredictable, it may indicate that the role isn’t suited to a permanent arrangement.
• Upcoming operational changes: Planned restructuring, downsizing, or other significant changes that affect the role can justify a refusal.
• Financial or operational impact: If converting the employee would cause substantial cost or disruption—such as needing to significantly alter rosters or staffing levels—this can be a valid ground.
• Still meets the casual definition: If the employee continues to meet the criteria for casual employment (i.e. no firm advance commitment to ongoing work), conversion can be declined.
• Not eligible: If the employee hasn’t met the required minimum employment period, or is currently in dispute about casual conversion, their request may be rejected.

Employers must provide their reasons in writing within 21 days of receiving the request. This promotes transparency and helps employees understand the decision. Any disputes can be escalated to the Fair Work Commission for resolution.

Key Takeaways

The latest amendments to the Fair Work Act introduce important changes to how casual employment is defined and managed. With the shift toward an employee-led conversion process, it’s essential for employers to understand their obligations and respond appropriately. Reviewing current arrangements and ensuring your processes align with these new requirements will help your business stay compliant and minimise risk.

Need help navigating the new casual conversion requirements?

Get in touch with Akyra for an obligation-free discussion about how we can support your business in staying compliant and managing workforce transitions with confidence.