You have decided to hire casually — or you are already running a casual workforce and want to make sure the arrangement still holds up. Either way, there is a defined legal path from the moment a casual employee starts through to the point where the question of permanency has to be addressed. That path changed materially on 26 August 2024, when the Fair Work Legislation Amendment (Closing Loopholes No. 2) Act 2024 (Cth) replaced the old casual conversion framework with a new "employee choice" pathway and introduced an updated statutory definition of casual employment.
At the end of that path, you will have either a well-documented casual arrangement that withstands scrutiny, or a permanent employment relationship that has been properly transitioned. What you want to avoid is ending up somewhere in between — a casual label over what is functionally a permanent role — because that is where liability for back-pay and entitlements accumulates.
This guide walks each stage in the order the law imposes it. It does not cover termination of casual employees, which is addressed separately.
Before you start: prerequisites
Before engaging a casual employee, have the following in place:
- A clear understanding of the s 15A definition. Under
s 15Aof the Fair Work Act 2009 (Cth), a person is a casual employee only if two conditions are met: (1) the employment relationship is characterised by an absence of a firm advance commitment to continuing and indefinite work, assessed on the real substance, practical reality, and true nature of the relationship; and (2) the employee is entitled to a casual loading or a specific casual rate of pay under an award, enterprise agreement, or the contract of employment. - The relevant modern award identified. Check whether a modern award covers the role. Awards set the minimum base rate, casual loading, penalty rates, overtime, allowances, minimum shift lengths, and break requirements. Where no award applies, the National Minimum Wage sets the floor.
- A written casual employment contract drafted. Not legally mandatory, but the strongest protection against a later dispute about the nature of the arrangement.
- The Casual Employment Information Statement downloaded. The Fair Work Ombudsman publishes this document. You must give it to every casual employee before, or as soon as practicable after, they start work. This is a National Employment Standards obligation.
- Payroll records systems ready. You must keep accurate time and wage records for all employees, including casuals.
- Superannuation fund details. Most casual employees are entitled to superannuation guarantee contributions at the current rate of 12% of ordinary time earnings, regardless of how many hours they work or how much they earn (with limited exceptions for employees under 18 not working more than 30 hours per week).
The two things that most commonly trip employers up before day one: failing to give the Casual Employment Information Statement (it is a legal requirement, not optional paperwork), and not checking whether a modern award applies to the role.
Step 1: Engage the employee correctly from day one
Issue the offer in writing
The offer should set out:
- that the engagement is casual
- that there is no guarantee of ongoing work or minimum hours
- how shifts will be offered and accepted
- the base rate and casual loading
- any award or enterprise agreement that applies
The written contract is where you establish, in documented form, the "no firm advance commitment" that underpins casual status under s 15A. Courts and tribunals look at the real substance of the arrangement — not just the label — so the contract language needs to match how work will actually be offered and accepted.
Give the Casual Employment Information Statement
Under the National Employment Standards (s 125A of the Fair Work Act 2009 (Cth)), the Fair Work Ombudsman prepares and publishes the Casual Employment Information Statement (CEIS). You must give a copy to each new casual employee before or as soon as practicable after they start work. The CEIS explains:
- what casual employment means
- the employee's rights regarding permanency
- the employee choice pathway
- the role of the Fair Work Commission in resolving disputes
You will also need to give the CEIS again at later intervals — after 12 months of employment, and again after 24 months. Small business employers have slightly different timing obligations.
Pay correctly from the first shift
Casuals are not a cheaper alternative to permanent staff — they attract a casual loading in lieu of paid annual leave, paid personal/carer's leave, and notice of termination. The loading is typically 25% above the base rate, though you need to confirm the exact rate under the relevant award or agreement because it can vary.
Beyond the loading, depending on the applicable award, casuals may also be entitled to:
- penalty rates for evenings, weekends, and public holidays
- overtime where they work beyond the hours specified in the award
- allowances for uniforms, tools, or travel
- minimum shift lengths (a shift below the award minimum must still be paid at the minimum)
Step 2: Manage the ongoing arrangement
Rostering and shift cancellations
Casual flexibility does not mean you can roster without structure. Modern awards commonly impose:
- minimum shift lengths (for example, a minimum of two or three hours per shift in many awards)
- minimum break requirements between shifts
- advance notice requirements for rosters
Cancelling a shift at short notice can trigger a minimum payment obligation. Before you pull a casual off a shift, check the relevant award rule — some require payment for the full minimum shift length if the cancellation occurs after the employee has been notified, or after a specified period before the shift.
Avoid creating a pattern that undermines casual status
The 2024 amendments introduced an objective test: a casual employee who no longer meets the s 15A definition — because the real substance of the relationship has become one of ongoing committed work — can notify you that they wish to convert. A regular, predictable pattern of the same shifts week after week is exactly the kind of pattern that can support such a notification.
That does not mean you cannot roster a casual consistently. It means:
- document that shifts are offered and accepted each time (not assumed)
- avoid making statements that promise future work
- review the arrangement when it has been running consistently for several months
Step 3: Recognise the conversion trigger
Under the employee choice pathway introduced on 26 August 2024, an eligible casual employee can notify you in writing that they believe they no longer meet the s 15A casual definition and want to convert to permanent (full-time or part-time) employment.
Eligibility
A casual employee can issue a conversion notice if:
- they have been employed for at least 6 months (or 12 months if you are a small business employer); and
- they believe they no longer meet the requirements of the casual definition having regard to their current employment relationship.
Note: employment before 26 August 2024 does not count toward the eligibility period for the employee choice pathway. The clock started on 26 August 2024 for existing casuals.
Step 4: Respond to a conversion notice
Consult before responding
Before issuing your written response, you must consult with the employee. That consultation should cover:
- whether the employee would be full-time or part-time
- what their hours of work would be
- when the change would take effect
Respond in writing within 21 days
You must give a written response within 21 days of receiving the notice. The response must either:
- accept the notice, setting out the agreed terms of the permanent employment; or
- refuse the notice, setting out your reasons.
Grounds for refusal
You can only refuse on specific grounds. Verified grounds from the Fair Work Act framework include that:
- accepting the change would require significant adjustment to the employee's hours of work that cannot reasonably be accommodated
- the employee's position is expected to cease to exist within the next 12 months
- the employee's hours of work are expected to be significantly reduced within the next 12 months
- the days or times on which the employee is required to work are expected to change significantly and the employee cannot reasonably be accommodated
- accepting the change would mean you would not comply with a recruitment or selection process required by law
The grounds must be based on facts that are known, or reasonably foreseeable, at the time of refusing. A vague preference for maintaining casual flexibility is not a valid ground.
Where people get held up
- Missing the 21-day window. No response is not a refusal — it creates a dispute. Set a calendar reminder the day the notice lands.
- Refusal without documented grounds. If you refuse, document the factual basis for the ground you rely on at the time of the decision. Reconstructed reasoning after a dispute is much harder to defend.
- Confusing the old casual conversion rules with the new pathway. The pre-26 August 2024 rules (employer obligation to offer conversion after 12 months) applied until 26 August 2025. Since that date, only the employee choice pathway applies. If you are still operating under old procedures, update your processes.
- Small business timing errors. The eligibility threshold for small business employers is 12 months, not 6 months. Make sure your HR systems reflect the correct trigger point.
Step 5: Resolve disputes through the Fair Work Commission
If the employee disputes your refusal — or if no response is given within 21 days — the employee can apply to the Fair Work Commission for dispute resolution. The Commission can deal with the dispute and, where appropriate, make orders.
Having a documented consultation record, a written response issued within time, and a factual basis for any refusal is what protects you at this stage.
How Artificer Legal can assist
Casual employment looks straightforward until something goes wrong. The areas where legal help makes a practical difference include:
- Drafting or reviewing casual employment contracts to ensure the "no firm advance commitment" is properly documented and the contract reflects how work will actually be offered — not just what sounds right.
- Reviewing your workforce to identify casuals who may be approaching the eligibility threshold, so you are not caught flat-footed when a notice arrives.
- Responding to a conversion notice — advising on whether valid grounds for refusal exist, drafting the written response, and documenting the consultation.
- Representing you at the Fair Work Commission if a conversion dispute proceeds to conciliation or arbitration.
- Auditing pay practices to identify casual loading gaps, underpaid penalties, or superannuation shortfalls before they become a complaint.
If you are setting up casual employment arrangements or working through a conversion notice, contact Artificer Legal to discuss your situation.
The thing most likely to determine whether this goes smoothly
The conversion notice is the moment most employers are unprepared for — but the outcome is usually decided by what happened in the months before it arrived. A casual who has been working identical shifts every week for over a year, without documented shift-by-shift offers and acceptances, and without any evidence that work was genuinely offered rather than assumed, is in a strong position to argue the arrangement was never truly casual. By the time the notice arrives, the employment history is already set.
The practical priority is managing the arrangement continuously — not just reacting when conversion becomes an issue. That means written contracts, documented shift records, the Casual Employment Information Statement given on time, and a review process triggered when a consistent pattern has been running for several months. An employer who has maintained those practices has a defensible position; one who has not is negotiating from a weak hand regardless of what the contract says.
Key points to remember: the s 15A definition of a casual employee is an objective test based on the real nature of the relationship, not just the label on the contract; the employee choice pathway has applied since 26 August 2024 with a 6-month eligibility threshold (12 months for small businesses); employers must respond in writing within 21 days and can only refuse on specified grounds; and the Casual Employment Information Statement must be given before or as soon as practicable after the employee starts, and again at 12 and 24 months.