What Rights Do I Owe My Full-Time Casual Employees?

In Short

• Full-time casual employees have the right to request conversion to permanent employment.
• Employers must offer conversion after 12 months if certain conditions are met.
• Casual employees have access to entitlements like annual leave if they convert to permanent status.

Tips for Businesses

Ensure you are aware of your legal obligations regarding full-time casual employees. If an employee has been with you for 12 months, review their eligibility for conversion to permanent employment and communicate the process clearly. Staying compliant helps avoid disputes and supports employee retention.

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Table of Contents

• What is a Casual Employee?
• What Are Casual Employees Entitled To?
• When Does an Employee’s Status as a Casual Change?
• Casual Conversion Obligations
• Key Takeaways

As an employer, it is crucial to understand the differences between each type of employee. Casual employees are workers who accept their job offer knowing that there is no solid commitment to continued employment with an agreed-upon work pattern. If you hire someone as a casual, their schedule may vary each week to meet your demands, and they will have the option to decline or exchange shifts. This article explores the rights given to casual employees to help you better meet your business obligations. 

What is a Casual Employee?

A worker will be a casual employee under the Fair Work Act if they: 

• are given a job, but the offer does not contain a guarantee that the work would continue on an ongoing basis with an agreed-upon pattern of work; 
• accept the offer despite the lack of a firm advance commitment; and 
•  begin to work as an employee.

You can identify a casual employee by the terms of their contract. 

What Are Casual Employees Entitled To?

Under the National Employment Standards (NES), you owe your casual employees:

• access to a career path that leads to permanent employment; 
• two days of unpaid carer’s leave and two days of unpaid compassionate leave per permissible occurrence; 
•  five days of unpaid leave for family and domestic violence (in 12 months); and
• a period of unpaid community service leave. 

Additionally, casual employees can request flexible working arrangements and unpaid parental leave if they:

• have been engaged as a casual employee by you on a regular and systematic basis for at least 12 months; and 
• anticipate that you will hire them regularly in the future. 

You must pay a casual employee casual loading, which is a higher rate of pay for being a casual employee, under their award or agreement. However, even if a casual employee works on a regular and systemic basis, you do not have to provide them with paid leave, such as annual leave or sick leave. Casual employees may have rights to long service leave in some states and territories. 

When Does an Employee’s Status as a Casual Change?

If you hire a worker on a casual basis, they will remain a casual employee until: 

• they become a permanent employee by converting to full-time or part-time work; or 
• the employment relationship ends through termination or resignation.

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Casual Conversion Obligations

If both you and your casual employee agree, they can switch to full-time or part-time work at any time.

Casual employees have the right, under the NES, to access a pathway to becoming a permanent full-time or part-time employee in certain conditions. This is referred to as ‘casual conversion’. The Fair Work Commission has evaluated award terms on casual conversion to ensure they are compatible with the NES. 

Typically, you must give your casual employees a choice to transition to full-time or part-time permanent employment after they have worked for you for 12 months. This should be in the form of a written offer of conversion, which you must give to your employee within 21 days of their 12-month anniversary of employment. However, this is subject to the conditions that the employee: 

• has been working for you for at least the previous six months on an ongoing basis; 
• has a regular pattern of hours;  and 
• will continue to work these hours as a full-time or part-time employee without significant changes. 

Key Takeaways

In general, you do not owe your casual employees the same rights and entitlements as permanent employees. Casual employees do not have access to annual leave or sick leave. However, they are entitled to casual loading and some forms of unpaid leave, including carer and compassionate leave. You must also provide your casuals with a pathway to permanent employment through conversion, given that they meet certain criteria.

If you have any questions regarding your obligations, our experienced employment lawyers can assist as part of our LegalVision membership. For a low monthly fee, you will have unlimited access to lawyers to answer your questions and draft and review your documents. Call us today on 1300 544 755 or visit our membership page.