What are the rules about casual employees vs permanent employees

In March 2021, the Fair Work Act 2009 (FW Act) was amended to change workplace rights and obligations for casual employees and when they might become permanent employees.

Summary of changes at a glance

Where a company has more than 15 employees and uses casuals in a regular, ongoing way, employers will need to offer casual employees the chance to become permanent.

Specifically:

  • Effective immediately, employers that have 15 or more employees, have casuals that have worked for more than 12 months; who have worked regular hours for the last 6 months, and are expected to continue doing so will need to make an offer to make them a permanent (full-time or part-time) employee
  • Going forward, employers that have 15 or more employees, will also need to make an offer in the same circumstances to eligible employees within 21 days of the employees anniversary date.
  • Employers need to provide all current and new casuals a Casual Employee Information Sheet (CEIS) 

See more details below including links to the Fair Work website.

Employers making an offer to convert from casual to permanent

Employers that have 15 or more employees, need to make a written offer to convert their casual employee to permanent employment within 21 days of the employee’s 12-month anniversary, if the employee meets the below criteria:

  • has been employed by the employer for 12 months
  • has worked a regular pattern of hours on an ongoing basis for at least the last 6 months
  • could continue working these hours as a full-time or part-time employee without significant changes.

The offer needs to be for the employee to convert to:

  • Full-time employment - if the employee’s hours worked for at least the last 6 months have been the same as full-time hours, or
  • Part-time employment - if the employee’s hours worked for at least the last 6 months have been less than full-time hours.  Part-time employment hours should be the same as the regular pattern of hours worked as a casual employee for the last 6 months.

Employers can choose NOT to offer conversion in limited circumstances

If an employer that has 15 or more employeesd ecides not to offer casual conversion, the employer needs to write to the employee within 21 days of the employee’s 12 month anniversary, telling them:

  • that they aren’t making an offer of casual conversion
  • the reasons for not making the offer.

The only reasons for not making an offer are:

  • the employee hasn’t worked a regular pattern of hours:
  • on an ongoing basis for at least the last 6 months 
  • which they could continue working as a full-time or part-time employee without significant changes
  • the business has reasonable grounds for not making an offer.

Reasonable grounds for deciding not to make an offer can include that, in the next 12 months:

  • the employee’s position won’t exist
  • the employee’s hours of work will significantly reduce
  • the employee’s days or times of work will significantly change, and that can’t be accommodated within the employee’s available days or times for work.

Reasonable grounds can also include:

  • making the offer would not comply with a recruitment or selection process required by or under a Commonwealth, State or Territory law
  • the employer would have to make a significant adjustment to the employee’s work hours for them to be employed full-time or part-time.

Employees responding to an offer

To accept an offer to convert, employees need to respond to their employer in writing within 21 days after getting the offer. If they don’t respond, their employer can assume that they’ve declined the offer.

When a casual conversion offer is accepted

Before a casual employee converts to permanent employment, their employer has to discuss with the employee their:

  • type of employment (full-time or part-time)
  • hours of work as a permanent employee
  • start date as a permanent employee.

If a casual employee accepts an employer’s offer to convert, the employer needs to then confirm this information in writing to their employee within 21 days after the employee accepts their offer. 

The start date for the permanent hours is on the first day of the first full pay period after the employer has written to their employee, unless the employer and employee agree to another day. 

  • For example, if an employee’s pay period ends on Tuesday and the employer writes to the employee on Friday, then the start date for their permanent hours would be the following Wednesday.

If a casual employee converts to permanent employment, they will be a full-time or part-time employee, even if a contract or other agreement entered into when their employment started says they are casual.

More information