Following 2024 amendments to the Fair Work Act (Act), the definition of a casual employee and the entitlement to become a permanent employee have changed.

Previously, if certain conditions were met, an employer had an obligation to offer a casual employee conversion to full-time or part-time employment (Permanent Employment), which the employee could accept or reject. 

The terms “casual conversion” and “employer offer” are no longer strictly relevant, although a casual employee now has a “choice” to change to Permanent Employment under the Act.

Casual employment is now generally defined by the commencement of employment without a firm advance commitment for continuing and indefinite employment and an entitlement to a casual loading or a specified additional rate of casual pay (Casual Loading).

An employer and employee may agree to change from casual employment to Permanent Employment at any time during the employment. 

However, an employer no longer has an obligation to offer casual conversion to the employee during their employment.

Now, a casual employee has an entitlement after 6 months’ employment to notify their employer that they want to change their employment from casual to permanent (Change Notification), if the employee believes that the pattern of work they have been performing demonstrates that they no longer meet the definition of casual employee under the Act.

An employer must accept or not accept the Change Notification in writing within 21 days.

Process for Change Notification 

1. Notification – the employee gives the employer notification.
2. Acknowledgement / Assessment – the employer acknowledges receipt of the notification, arranges a meeting with the employee and makes an initial assessment of both the employee’s eligibility to give notification and whether the notification should be accepted or not be accepted.
3. Consultation Meeting – the Act requires that the employer must consult with the employee regarding the notification. It is also important that the employee understands that the Casual Loading will not be paid if they change to Permanent Employment.
4. Response – An employer must respond to the employee’s notification, in writing within 21 days, either accepting that the employment has changed to permanent or not accepting the change. A new employment contract should be executed that reflects the change in remuneration and benefits, since the casual employee is no longer entitled to a Casual Loading.

There should be no need to substantially or materially change the pattern of work that the employee has been performing, as it is this pattern that the employee should be relying upon to justify their belief that “real substance, practical reality and true nature of the employment relationship” has changed from casual to permanent. There may be a reason not to accept a Change Notification if a substantial change in the pattern of work is required and has not already occurred.

Why Change Notification May Be Not Accepted

1. An employer may validly not accept the change to Permanent Employment if any of these apply: The employee is not eligible because they have not been employed for at least 6 months or have made a previous Casual Notification that was not accepted or a dispute was not resolved in the previous 6 months.
2. The Employer believes there remains an absence of a firm advance commitment to continuing and indefinite employment.
3. There are fair and reasonable operational grounds for not accepting the notification, including substantial changes would be required to the way in which work in the employer’s enterprise is organised; there would be significant impact to the operation of the employer’s enterprise; substantial changes would be reasonably necessary to the employee’s terms and conditions to ensure that a relevant fair work instrument term that applies to a permanent employee is not contravened.
4. Accepting the notification would not comply with a recruitment or selection process required by or under a law of the Commonwealth or a State or a Territory.

Disputes

If the employer does not accept the change to Permanent Employment, the employee and employer must attempt to resolve any dispute, either through the employer’s procedures or a dispute resolution process in the relevant modern award or enterprise agreement. If the dispute remains unresolved, the employee or employer may refer the dispute to the Fair Work Commission.

Further Notifications

If an employee has given a notification that has not been accepted by the employer, they cannot make a further notification until after a period of six months has passed since the previous notification was not accepted or that dispute relating to the previous notification was resolved under the Act, 

Conclusion

Although employers no longer have an obligation to offer conversion to casual employees, they must properly respond to a Change Notification within 21 days, and follow the necessary process, if they do not want the employment of a casual employee changed to Permanent Employment.