Casual conversion is a provision under Australia’s National Employment Standards (NES) that allows casual employees to transition to permanent full-time or part-time roles. This mechanism offers employees greater job security and access to benefits such as paid leave, while employers benefit from a more stable workforce.
Pre-26 February 2025 Framework
Prior to 26 February 2025, employers (excluding small businesses) were obligated to proactively offer eligible casual employees the opportunity to convert to permanent employment. This offer had to be made in writing within 21 days after the employee’s 12-month anniversary, provided the employee had:
- Been employed for at least 12 months.
- Worked a regular pattern of hours on an ongoing basis for at least the last six months.
- The capacity to continue working these hours as a permanent employee without significant changes.
Employers could decline the conversion request only on reasonable grounds, such as significant changes to the employee’s hours or the position ceasing to exist in the near future.
Post-26 February 2025 Changes
Effective from 26 February 2025, the responsibility shifts from employers to employees through the introduction of the Employee Choice Pathway. Under this new system, eligible casual employees can initiate the conversion process by notifying their employer in writing of their intention to transition to permanent employment. Employers are then required to respond in writing within 21 days, either accepting the request or providing valid reasons for refusal. This change empowers employees to take charge of their employment status, while employers are relieved from the obligation to make unsolicited offers of conversion.
Legal Precedents and Implications
The danger of failing to properly consider the casual conversion pathway is evident in landmark legal cases that have shaped the understanding of systematic and regular employment as opposed to true casual employment.
In the 2018 case of WorkPac Pty Ltd v Skene[1], the Federal Court found that despite being classified as a casual employee, Mr. Skene was entitled to annual leave payments under the NES. The court determined that his regular and predictable work schedule indicated a “firm advance commitment” to ongoing work, a key factor distinguishing permanent employment from casual.
Conversely, in the 2021 High Court case of WorkPac Pty Ltd v Rossato & ORS[2], the court held that Mr. Rossato was a casual employee, emphasising the importance of the employment contract’s terms. The decision underscored that without a firm advance commitment to ongoing work, as outlined in the contract, an employee remains classified as casual, even if the work pattern is regular.
These legal precedents highlight the critical importance of clearly defined employment contracts and the actual nature of work arrangements. Employers must ensure that their employment agreements accurately reflect the intended nature of the employment relationship and remain vigilant in reviewing work patterns to ensure they align with the employee’s classification.
For employees, the shift to the Employee Choice Pathway provides greater autonomy in determining their employment status. However, it also necessitates a thorough understanding of eligibility criteria and the implications of transitioning to permanent employment.
As the landscape of casual employment continues to evolve, both employers and employees must stay informed and proactive to navigate these changes effectively. For tailored advice on casual conversion obligations and compliance, contact Daniel Morgan (daniel@morganegnlish.com.au) and our Workplace + Conduct team at M+E today.
[1] [2018] FCAFC 131
[2] [2021] HCA 23
