Changes to Casual Employment
a. Changes to the definition of Casual Employment
From 26 August 2024, a new definition of casual employment will be introduced into the Fair Work Act 2009 (the Act). Under these new changes, an employee is only a casual employee if:
1. there is an absence of a ‘firm advance commitment’ to continuing and indefinite work; and
2. the employee would be entitled to a casual loading, or specific rate of pay for casual employees under a relevant industrial instrument.
Prior to these changes, an employee is considered a casual employee if they accept an offer from an employer on the basis that the employer makes no firm advance commitment to continuing and indefinite work according to an agreed pattern of work.
Under the new changes, in determining whether there is an absence of a ‘firm advance commitment’, there must now be consideration of the real substance, practical reality and true nature of the employment relationship instead of sole consideration of the contractual terms at the time the offer of casual employment is made. The assessment of whether there is a ‘firm advance commitment’ can be complex and needs to consider various factors, some of which are provided by law.
MGAIBA considers these changes could make it more difficult to determine whether an employee is a true casual employee and places greater importance on comprehensive contracts of employment which can be considered in making an assessment as well as the conduct of the employee and employer once employment has commenced.
b. Changes to offers of casual conversion (changing from casual to permanent employment)
Casual employees will soon have a new pathway to convert to permanent employment. This new pathway will replace the existing ‘casual conversion’ rules.
The new casual conversation pathway will become available to different employees over time:
| Business type | Commencement date |
| Small business employers* | 26 August 2025 |
| Other businesses | 26 February 2025 |
*A small business employer is one which employs 14 or less employees by headcount. When counting the number of employees, employees of associated entities of the employer are included. Casual employees are not included unless engaged on a regular and systematic basis.
Until the applicable commencement date, the current requirements will continue to apply before being replaced on the commencement date.
Under the current requirements, an employer (except for small businesses) is required to make a written offer to casual employee to convert to permanent employment if they have been employed for 12 months and have worked a regular pattern of hours on an ongoing basis for the previous 6-month period of employment, which, without significant adjustment, could continue working as permanent employee.
However, under the new laws, the onus will be on the casual employee to provide written notice to their employer of their intention to convert to permanent employment if they:
- want to convert to permanent (part-time or full-time) employment;
- believe their employment arrangements no longer meet the new casual employee definition above;
- have been employed for at least 6 months (12 months for a small business employer); and
- are not currently engaged in a dispute with their employer regarding their employment status.
A casual employee will only be able to give notice of their intention to convert to permanent employment once every six months. After receiving the notice, the employer must firstly consult with the employee and provide a written response to the notice within 21 days. An employer which refuses the request must have a valid reason for doing so, including if the employee still meets the definition of a casual employee, or if there are reasonable operational grounds to refuse such request. Each request must be considered on its own merits and circumstances.
An employee can challenge an employer’s decision in the Fair Work Commission and seek a legally binding order to overturn the decision.
These changes will give casual employees the right to give notice of their intention to convert to permanent employment. As such, this means members will no longer need to monitor and offer casual conversion to casual employees after they have reached their 12-month employment anniversary in the future, after the commencement date.
