Genuine casuals and eligibility for casual conversion

What exactly is a casual employee?

Casual employees are a vital element of Australia’s workforce but up until recently, there has been no clear definition of what a casual employee really is.

However, after recent changes to the Fair Work Act 2009, casual employment is now clearly defined and there are also clear circumstances where a ‘regular’ casual employee can be eligible to ‘convert’ to permanent employment.

While most modern awards already contained casual conversion provisions, a harmonised approach to casual conversion now exists under the Act.

What is the true definition of a casual employee?

The definition of a casual employee is now provided in the Fair Work Act 2009.

Specifically, an individual is a casual employee if an offer of employment is made on the basis that the employer makes no firm advance commitment to continuing and indefinite work according to an agreed pattern of work and employment is accepted on that basis.

As such, an employer will offer work on an as-needs basis, but the employee can also accept or decline any work that is offered.

Casual employees lack the assurance of regular and ongoing work that permanent employees enjoy.

However, they are entitled to receive a 25 per cent casual loading, which is intended to compensate them for this as well as for the paid annual and sick leave entitlements they do not receive.

Casual conversion

Recently, the most significant change to casual employment laws involves the addition of offers and requests for casual conversion within the Act, through which a casual employee may convert to permanent employment if they satisfy certain criteria.

An employee eligible for casual conversion:

• has been engaged for at least 12 months of continuous service


• has worked a regular pattern of hours on an ongoing basis for the most recent six months


• could, without significant changes to their work pattern, continue to perform these hours on a permanent part-time or full-time basis.

What employers should consider

For all business owners (other than small business owners), there is an obligation to offer casual conversion to your employees after they have performed 12 months of service.

Otherwise, you must outline the reasons why you are declining to offer casual conversion.

This must be done formally, in writing, and take place within 21 days of their 12-month anniversary of work.

If you decide not to make an offer, this needs to be justified either by outlining that the employee has not worked a regular pattern of hours on an ongoing basis for the past six months that they could continue as a permanent employee without significant changes or that the business has reasonable business grounds to decline to make an offer.

These reasonable business grounds include:

• that in the next 12 months the employee’s position will not exist, the employee’s hours of work will significantly reduce or the employee’s days or time of work will significantly change and this cannot be accommodated within their available days and hours to perform work


• that the employer would have to make significant changes to the employee’s hours of work for them to be engaged on a permanent part-time or full-time basis (ie, they are not performing a regular pattern of hours).

A note for small business employers

Under the recent changes, there is no obligation to offer casual conversion to your casual employees when operating a small business with fewer than 15 employees.

However, all casual employees retain the right to request casual conversion to permanent employment if they believe they meet the eligibility requirements for doing so.

What happens if an employee wants to request casual conversion?

In some situations, an employee can request casual conversion if they believe they meet the requirements and they can make this request every six months.

If they were told by their employer in the previous six months that no casual conversion offer will be made since they had not worked a regular pattern of work for six months, they can still request casual conversion if they have now reached the six-month threshold of performing regular work.

How these changes fit real-world scenarios

To give an example, a casual employee regularly performs work on Monday, Tuesday and Thursday, performing four to six hours each day.

While the hours they work each day or the shift commencement and finish times are not exactly the same, there is certainly an argument that they are engaged to perform a regular pattern of hours on an ongoing basis. As such, they would likely be eligible for casual conversion once they have completed 12 months of service.

Final thoughts

In summary, it is important for members to be aware of how a genuine casual employee should be engaged.

Periodically reviewing employment contracts, payroll systems and patterns of work will enable both employees and employers to keep on top of their casual conversion obligations.

The HR in Practice specialist workplace relations and work (occupational) health and safety advisory service is operated by Wentworth Advantage. APA Business Group Premium Principal members can contact the HR in Practice service on 1300 138 954 or hrinpractice@australian.physio or click here to access the full suite of online resources, including those dedicated to wellbeing. For more information about joining the APA Business Group, click here, email info@australian.physio or call 1300 306 622.