Casual Conversion:
The New Rules

What changed

Before the Closing Loopholes Act 2024, casual conversion worked on an employer offer model: after 12 months, the employer had to offer conversion to eligible casuals. Many employers simply didn't make the offer — and faced minimal consequences.

The new model flips this. It's now an employee choice pathway:

• The employee can notify their employer that they're electing to convert — it's not a request, it's a notification
• The employer must respond within 21 days
• The employer can only refuse on specific, limited grounds
• If the employer doesn't respond within 21 days, the conversion happens automatically

Who can convert

A casual employee can elect to convert if:

1. They've been employed for at least 6 months (or 12 months for small businesses with fewer than 15 employees)
2. They believe they no longer meet the definition of a casual employee — meaning their employment is no longer characterised by an absence of a firm advance commitment to continuing and indefinite work according to an agreed pattern

Your notification obligations

Employers must give every casual employee a Casual Employment Information Statement (CEIS):

• Before or as soon as practicable after they start employment
• After 6 months of employment (or 12 months for small businesses)
• After 12 months of employment (all employers)

The CEIS must be the Fair Work Ombudsman's current version. It explains the employee's right to elect to convert. Failure to provide the CEIS is a civil contravention.

Responding to a conversion request

When a casual employee gives you a written notification electing to convert:

1. You have 21 days to respond in writing
2. If you accept, discuss and agree on whether the role is full-time or part-time, based on their regular pattern of hours
3. If you want to refuse, you must have fair and reasonable business grounds and consult with the employee before refusing
4. If you don't respond within 21 days, the employee is deemed to have converted automatically

When you can refuse

You can only refuse a casual conversion election on fair and reasonable business grounds. The Act provides examples:

• The employee's position will cease to exist within 12 months
• The employee's hours will be significantly reduced within 12 months
• There will be a significant change in the days or times the employee works that cannot be accommodated as a permanent employee

You cannot refuse simply because you prefer casual arrangements, because it's more expensive to employ someone permanently, or because you haven't budgeted for leave entitlements.

Risks of getting it wrong

• Back-pay exposure — if a casual is found to have been permanent all along, you may owe annual leave, personal leave, and redundancy pay from day one (offset by casual loading paid)
• Civil penalties — up to $18,780 per contravention (individual) or $93,900 (body corporate) for failing to provide the CEIS or failing to respond to a conversion election
• Unfair dismissal claims — a converted permanent employee gains unfair dismissal protections after the minimum employment period
• Workers compensation — permanent employees have broader workers compensation entitlements in some states