Casual employees convert to permanent – What does the “Employee Choice Pathway” mean for business in Australia

Fair Work has brought new rules into place from the 26 August 2024 that gives eligible casual employees the right to notify their employer in writing of their intention to change to permanent employment. An employer can only refuse the notice for certain reasons.

It is important to note; this does not have to be a big deal and worry for employers. Many employees prefer to stay on, as casuals because of the higher rate of pay. Further, as an employer you do have the right to decline a request on reasonable grounds.

What does this mean for casual employees to convert to permanent?

Under the new Fair Work rules, casual employees can request to convert to permanent after working with the same employer for either 6 or 12 months, depending on the size of the business. Employers must offer casual conversion unless they have valid business reasons to refuse. For casuals hired before 26 August 2024, there’s a limited time to request conversion under older rules. It’s important to understand your rights and have a conversation with your employer if you’re looking to secure more stable, permanent work.

Fair Work’s page Changing from casual to full-time or part-time employment (casual conversion) outlines all the information you need to know about the process, employee eligibility, responding to a notification, and disputes arising over casual conversion.

Can every casual employee convert to permanent?

Casual employees who’ve been with the same employer for at least 6 months (for larger businesses) or 12 months (for smaller businesses) now have the right to request conversion to permanent part-time or full-time employment. Employers must respond to this request within 21 days, and any refusal must be based on reasonable business grounds, like changes in demand or foreseeable role reductions.

It is not dissimilar to the right to request flexible working hours introduced with the National Employment Standards and has similar requirements for both employees and employers.

What employers need to know when they receive a request from their casual employees to convert to permanent?

The casual employee must put the request in writing to the employer for consideration. Then the employer and employee must discuss and document their agreement. This document must detail whether the employee is converting to permanent part-time or full-time. Further, the agreement must document the hours of work, roster and any other items agreed to in accordance with the Modern Award most relevant to them.

Reasons for refusing the request

An employer can only refuse the request based on the following factors:

- the employee still qualifies as casual under the law.
- There are valid operational reasons, such as:
  - Major changes to business operations would be needed.
  - Significant impacts on the business’s function.
  - Adjusting employee conditions would breach existing rules (e.g., awards or agreements).
- Accepting the request would break legal recruitment or selection processes required for the role.

If an employer wants to decline to convert a casual employee to permanent they must do so in writing. The grounds for declining the request must be reasonable, discussed with the employee and then documented, This document must be provided to the employee within 21 days of the request.

The current casual conversion pathways (that apply before 26 August 2024) continue to apply for employers and their casuals employed before 26 August 2024 for a transitional period. See more at Becoming a Permanent Employee

In Conclusion:

If you are still uncertain of any aspect of this change of casual employees convert to permanent, seek professional assistance. Speak to a qualified practitioner in human resources or employment law in Australia. Remember, every country is different, and each has its own employment law requirements. Therefore, do not rely on knowledge you gained from another country.

Everything is evolving and quite rapidly in many areas. The employment law landscape is constantly evolving due to Case Law Wins and Losses. Consequently, make sure you keep up-to-date with the legislation in the country in which your business operates. Keep safe and if in doubt seek guidance from an accredited professional.

Part of this article originally appeared on the King Consulting HR blog.

King Consulting HR are accredited professionals in Australian Human Resources. Consequently, we are across and familiar with the Law as it relates to employment. Please do not hesitate to contact us with any questions.
Fair Work Commission Decision Summary

Australian Council of Trade Unions