Casual vs. Permanent Employment: Legal Rights Under Australia’s Changing Workplace Laws

Understanding Casual vs. Permanent Employment in Australia

Understanding the differences between casual and permanent employment in the Australian workforce is increasingly important, particularly in light of the changes to the provisions of the Fair Work Act 2009 (Cth). The Fair Work Act 2009 (Cth) Act provides specific definitions and entitlements for both types of employment, which have significant implications for employers and employees alike.

Casual employees, as defined under section 15A of the Fair Work Act 2009 (Cth), are typically engaged on an irregular basis and do not have the same entitlements as permanent employees. This distinction is crucial because it affects the rights and obligations of both parties in the employment relationship. For instance, section 123 of the Fair Work Act 2009 (Cth) explicitly states that casual employees, even those employed on a regular and systematic basis, are not entitled to redundancy pay.

The growing importance of understanding these differences is driven by the need for compliance with legal standards and the potential financial implications for businesses. Employers must accurately classify employees to ensure they are providing the correct entitlements and to avoid potential legal disputes.

The evolving workplace laws in Australia have significant implications for both casual and permanent employees, particularly in the context of the Fair Work Act 2009 (Cth) and recent legislative changes. For casual employees, the recent changes and impacts include:

• Casual Conversion Rights: Amendments to the Fair Work Act 2009 (Cth) have introduced provisions for casual conversion, allowing eligible casual employees to request a transition to permanent employment. This change aims to provide greater job security for casual workers who have been employed on a regular and systematic basis.
• Definition: The definition of a casual employee has been clarified, focusing on the absence of a firm advance commitment to continuing and indefinite work.

Employment lawyers play a crucial role in helping employees navigate the complexities of the changing landscape regarding casual and full-time employment. Here are several ways which Chamberlains Law Firm can assist:

• Understanding Rights and Entitlements: Chamberlains Law Firm can provide clarity on the rights and entitlements of casual and full-time employees under the Fair Work Act 2009 (Cth).
• Casual Conversion: With recent changes allowing casual employees to convert to permanent positions, the Workplace Team at Chamberlains can guide employees through the process, ensuring they meet eligibility criteria and understand the implications of conversion.
• Contract Review and Negotiation: The Workplace Team can review employment contracts to ensure they comply with current laws and accurately reflect the employee’s status. We can also assist in negotiating terms that are more favourable or in line with the employee’s needs.
• Dispute Resolution: In cases of disputes over employment status or entitlements, Chamberlains Law Firm can represent employees in negotiations or legal proceedings, helping to resolve issues effectively.
• Advising on Legal Changes: As workplace laws evolve, Chamberlains Law Firm can advise employees on how these changes impact their employment status and rights.

By providing expert legal advice and representation, Chamberlains Law Firm’s Workplace Team assists both employees and employers in making informed decisions and protecting their interests in a dynamic employment environment.

Casual & Permanent Employment

These are some key distinctions between casual and full-time employment contracts and their contents:

Casual Employees

1. Contracts: Casual employment contracts typically do not guarantee regular hours of work or a firm advancement to continuing work. They are often flexible, allowing employers to adjust hours based on business needs.
2. Entitlements:

1. • Casual Loading: Casual employees receive a loading (usually 25%) on their hourly wage to compensate for the lack of paid leave and other entitlements.
   • No Paid Leave: Casual employees are not entitled to paid annual leave or personal/carer’s leave.
   • No Redundancy Pay: Under section 123 of the Fair Work Act 2009 (Cth), casual employees, even those employed on a regular and systematic basis, are not entitled to redundancy pay.
   • Flexible Work Hours: Casual employees may have varying work hours and are not guaranteed a set number of hours each week.

Permanent Employees

1. Contracts: Permanent employment contracts typically include a set number of hours per week and provide job security with ongoing employment.
2. Entitlements:

1. • Paid Leave: Permanent employees are entitled to paid annual leave, personal/carer’s leave, and other types of leave as specified in the National Employment Standards.
   • Redundancy Pay: Permanent employees are entitled to redundancy pay if their position is made redundant, subject to certain conditions.
   • Notice of Termination: Permanent employees are entitled to a notice period or payment in lieu of notice upon termination of employment.

These differences highlight the importance of correctly classifying employees. Correctly classification is crucial for several reasons. Misclassification can lead to breaches of legal requirements and the Fair Work Act 2009 (Cth), resulting in penalties and legal action. Incorrect classification can also result in significant financial liabilities for employers, including back payment of wages, entitlements, and potential fines. For example, if a casual employee is misclassified as a permanent employee, the employer may be liable for unpaid leave entitlements. Misclassification can also lead to disputes between employers and employees over entitlements and working conditions. These disputes can escalate to legal proceedings, which are costly and time-consuming.

Key Benefits and Disadvantages of Casual & Permanent Employment

 

	Casual Employment	Full-Time Employment
Flexibility	Offers flexible work hours, allowing for work-life balance.	Provides job security with regular, predictable hours.
Remuneration	Includes a casual loading, often resulting in a higher hourly rate.	Entitled to a stable salary with potential for added benefits.
Variety	Opportunity to work in different roles and industries. Potential to work for more than one employer.	Consistent role and responsibilities. Generally unable to engage in secondary employment.
Immediate Income	Paid for each hour worked, with no deductions for leave.	Regular income with paid leave entitlements.
Job Security	No guarantee of ongoing work or regular hours.	Less flexibility in work hours and location. Greater job security.
Paid Leave	Not entitled to paid leave (annual, sick, etc.)	Entitled to various types of paid leave including annual leave and sick leave.
Income	Income can vary significantly from week to week depending on hours worked.	Stable income with predictable pay periods.
Redundancy	Not entitled to redundancy pay.	Eligible for redundancy pay.
Career Development	Fewer opportunities for career advancement and training.	More opportunities for career growth and professional development.

Legal Protections for Casual Employees

Casual employees are not protected from unfair dismissal unless they are able to prove that they are a regular and systematic employee. However, casual employees are protected from adverse action and if they experience adverse action for exercising their workplace rights, they are entitled to bring a general protections claim before the Fair Work Commission.

If you believe you have been subject to adverse action or are a regular and systematic casual employee who has been unfairly dismissed, please reach out to Chamberlains Law Firm Workplace Law Team to discuss your next steps.

Rights to Convert From Casual to Permanent Employment

Employees and Employers should be aware that the casual conversion pathways have changed. From 26 February 2025 (and from 26 August 2025 for small businesses) eligible casuals can issue a notice to convert to permanent employment through the employee choice pathway under the National Employment Standards.

Employees who have been employed for at least 6 months (or 12 months if employed by a small business) will be able to notify their employer of their intention to change to permanent employment. These employees may also request casual conversion if they believe they no longer meet the requirements of the casual employee definition. The request for conversion must be made in writing to the employer.

Employers must note that employees cannot request to become a permanent employee if they:

• Are currently engaged in an ongoing dispute with their employer about casual conversion: or
• In the last six months:
  • Their employer refused a previous notification; or
  • They have resolved a dispute with their employer about casual conversion

Employers in response to a request for casual conversion must:

• Begin consultation with the employee and inform them of the changes that will occur once becoming a permanent employee; and
• Respond in 21 days to the request either accepting or rejecting the change.

If a dispute arises regarding converting from casual to full-time employment and this dispute has not been resolved at the workplace level, an application can be made to the Fair Work Commission to deal with the dispute. Chamberlains Law Firm are experienced advocates and can assist you in the Fair Work Commission and with the casual conversion process.

Conclusion

Understanding the differences between casual and permanent employment in the Australian workforce is increasingly important, particularly in light of the provisions of the Fair Work Act 2009 (Cth). The growing importance of understanding these differences is driven by the need for compliance with the law in order to best protect both the employer and employee. In a forever shifting employment landscape, Chamberlains Law Firm is with you. The Workplace Team are available to advise, represent and protect your rights and interests. Reach out to the Workplace Team today!