Casual conversion.

Casual conversion is the moment a casual employee stops being casual and becomes a permanent full-time or part-time employee. It matters more than any other status change in Australian employment law, because it is the day paid leave starts to build up. A casual accrues no paid annual leave and no paid personal/carer's leave at all. From the day a conversion takes effect, both start accruing. The rules for how that change happens were rewritten by the Closing Loopholes amendments and the old "employer offer" model is gone: since 26 August 2024 the pathway in the National Employment Standards (NES) is the employee choice pathway, and the last of the old transitional pathways closed on 26 August 2025. This guide sets out the current definition of a casual, exactly how the employee choice process works, the timeframes, and what you gain (and lose) on the day the change takes effect. The rules below were verified against the Fair Work Act 2009 compilation in force from 1 July 2026 and current Fair Work Ombudsman guidance on 26 July 2026. Conversion matters most in the high-casual industries: the Fast Food Award, Restaurant Award, Registered Clubs Award and Hair and Beauty Award pages show what a converting employee starts to accrue.

What changed, and when

Before 26 August 2024, larger employers had a positive obligation to offer conversion to eligible regular casuals after 12 months, and employees who missed out had a residual right to request it. That whole scheme has been repealed. Division 4A of Part 2-2 of the Fair Work Act now contains only three live subdivisions: the application provisions, employee choice about casual employment, and the dispute and protection provisions. There is no longer any employer duty to offer conversion at all. The initiative sits entirely with the employee.

The transition ran in stages. Employment before 26 August 2024 is not counted when working out eligibility for the new pathway, so a long-serving casual employed before that date could not use employee choice immediately. Instead, casuals employed before 26 August 2024 could first give an employee choice notice from 26 February 2025 (or from 26 August 2025 if employed by a small business). The old offer and request pathways ran alongside during that window and are now closed. If you are reading advice that tells you to wait for your employer to make you an offer after 12 months, that advice is out of date.

The current statutory definition of a casual

Everything about conversion turns on whether you still fit the definition of a casual employee. That definition is in section 15A of the Fair Work Act, and it was replaced on 26 August 2024. Under the current test, you are a casual employee only if both of the following are true:

• the employment relationship is characterised by an absence of a firm advance commitment to continuing and indefinite work; and
• you would be entitled to a casual loading or a specific casual rate of pay under a fair work instrument, or you are entitled to one under your contract.

The change that matters is how the first limb is assessed. Section 15A(2) requires it to be judged on the real substance, practical reality and true nature of the employment relationship, and expressly allows a firm advance commitment to be found in a mutual understanding or expectation between employer and employee that never became a term of the contract. Under the previous definition the assessment was made only on the terms of the contract at the point of engagement, so what actually happened afterwards was largely irrelevant. Now it is central: a mutual understanding can be inferred from the conduct of the parties after the contract was entered into, or from how the contract is performed.

Section 15A(2)(c) lists the considerations that must be weighed, all of which point towards the presence of a commitment: whether the employer cannot really elect to offer or not offer work, or you cannot really elect to accept or reject it; whether continuing work of the kind you usually do is reasonably likely in the business; whether full-time or part-time employees do the same kind of work; and whether you have a regular pattern of work. No single consideration decides it, and the Act contains an explicit note that a regular pattern of work does not by itself indicate a firm advance commitment. For the wider comparison between the two employment types, including the 25% loading, see our guide on casual versus permanent employment.

The employee choice pathway: who can use it

Section 66AAB sets the eligibility gate. You may give your employer a written notification if all of the following apply:

• having regard to s.15A and your current relationship with the employer, you believe you no longer meet the requirements to be a casual;
• you have been employed by that employer for at least 12 months if the employer is a small business employer when you give the notice, or at least 6 months if it is not;
• you do not currently have a Division 4A dispute being dealt with under s.66M (including arbitration under s.66MA) or s.739; and
• in the 6 months before the day you give the notice, you have not received a refusal of an earlier notice and have not had a Division 4A dispute resolved under s.66M or s.739.

A small business employer is one with fewer than 15 employees, counting employees of associated entities, and counting casuals only where they are engaged on a regular and systematic basis. So the qualifying period is not a fixed number: it doubles for small business staff. Note also that the test is a period of employment beginning the day the employment started, not a period of continuous permanent service, so a casual with gaps between shifts still clocks up the 6 or 12 months.

Separately from all of this, you and your employer can simply agree to change your status to full-time or part-time at any time. The employee choice pathway is a fallback for when agreement is not forthcoming, not the only route. What an employer cannot do is force you across: s.66L(2) says nothing in the Division requires an employee to change, permits an employer to require it, or requires an employer to increase your hours.

The process and the timeframes

The steps and deadlines are fixed by statute. The table below is the whole process, from qualifying period to the day your leave starts accruing.

If the employer accepts, the written response must state whether you are becoming full-time or part-time, what your hours of work will be after the change, and the day the change takes effect. Section 66K then puts the result beyond argument: from that day you are treated as a full-time or part-time employee for the purposes of the Fair Work Act and any other Commonwealth law, state and territory law, any applicable award or agreement, and your contract of employment.

When an employer can refuse, and what happens next

An employer cannot refuse a notice simply because it would prefer to keep you casual. Section 66AAC(4) closes the list to three grounds, and the written response must give reasons:

• You still meet the casual definition. Assessed against s.15A and your current relationship with the employer.
• Fair and reasonable operational grounds. Section 66AAC(5) says these include that substantial changes would be required to how work in the business is organised, that there would be significant impacts on the operation of the business, or that substantial changes to your terms and conditions would be reasonably necessary to avoid the employer breaching an award or agreement that would apply to you as a permanent employee.
• A legally required recruitment process. Accepting would mean the employer fails to comply with a recruitment or selection process required under Commonwealth, state or territory law. Merit-based public sector recruitment is the standard example.

After a refusal you cannot give another notice for 6 months. You can, however, dispute the refusal straight away. Section 66M requires the parties to try to resolve it at the workplace level first, and if that fails either party can refer the dispute to the Fair Work Commission using Form F10A. The Commission must first try to deal with it by means other than arbitration (mediation, conciliation, a recommendation or an opinion) unless there are exceptional circumstances, and can then arbitrate under s.66MA. On arbitration the Commission can order that you continue to be treated as a casual, or that you be treated as a full-time or part-time employee from the first day of your first full pay period after the order (or a later day it considers appropriate).

There are also anti-avoidance protections. Section 66L(1) prohibits an employer from reducing or varying your hours, changing your pattern of work, or terminating your employment in order to avoid an obligation or right under the Division. Giving a notice, receiving a response, being taken to be permanent under s.66AAD, and participating in a dispute are all workplace rights, so adverse action taken because of them is a general protections breach.

The Casual Employment Information Statement

The Casual Employment Information Statement (CEIS) is how the law is supposed to reach you without you going looking for it. Under ss.125A and 125B, the Fair Work Ombudsman prepares and publishes it and every employer must give it to every casual employee. The statement must explain the meaning of casual employee under s.15A, the fact that an employee can notify after 6 months (12 months for a small business employer), the grounds on which an employer may refuse, and the role of the Fair Work Commission in disputes.

The timing rules are specific, and they repeat:

• before, or as soon as practicable after, you start employment as a casual;
• as soon as practicable after 6 months of employment;
• as soon as practicable after 12 months of employment, and after the end of each subsequent 12 month period.

Small business employers are carved out of the 6 month issue and the repeating 12 month issues after the first, so in practice a small business must give the CEIS at the start and again after 12 months. Employers must give the version of the statement in force at the time it has to be issued. Note this is in addition to the Fair Work Information Statement that every new employee gets.

What changes the day you become permanent

This is the part that matters for your pay and your leave balance. On the day the change takes effect:

• Paid annual leave starts accruing. Section 87 gives 4 weeks of paid annual leave for each year of service (5 weeks for a defined shiftworker), accruing progressively according to your ordinary hours of work and accumulating from year to year. A part-timer gets the same 4 weeks, measured against their own shorter week. Work your balance on the annual leave calculator.
• Paid personal/carer's leave starts accruing. Section 96 gives 10 days a year, again accruing progressively according to ordinary hours. See personal leave and our explainer on personal leave versus sick leave.
• Paid compassionate leave replaces unpaid. Casuals get 2 days unpaid per occasion; permanents get it paid.
• Public holidays become paid. A permanent employee is paid at their base rate for a public holiday that falls on a day they would ordinarily work. See public holidays.
• Notice of termination and redundancy pay switch on. Section 123(1)(c) excludes casual employees from the notice and redundancy Division entirely. As a permanent you are covered, subject to the usual exclusions such as under 12 months of service and the small business exemption. See redundancy, termination pay and final pay.
• You lose the casual loading. The loading (commonly 25% under modern awards) exists precisely because casuals get none of the above. Once you are permanent your hourly rate drops to the base rate. Check yours through the awards pages.

Does your casual service count afterwards?

This is the single most misunderstood point, and the answer is mostly no. Converting does not backdate anything. The Fair Work Act repeatedly excludes casual periods from the service that generates paid leave and redundancy pay:

• Annual leave. Section 87(1) and (2) grant and accrue leave for each year of service other than periods of employment as a casual employee of the employer. Your accrual clock starts on the change date, at zero.
• Personal/carer's leave. Section 96(1) and (2) use exactly the same exclusion. Again, zero on day one.
• Redundancy pay. Section 119(3) states that a reference in that section to continuous service with the employer does not include periods of employment as a casual employee, and s.121(1)(a) applies the same exclusion to the 12 month qualifying threshold.

The Fair Work Ombudsman puts the practical position plainly: in most cases casual service does not count for redundancy pay and notice, and its worked example is of an employee with 9 years of employment whose entitlement is calculated on the 7 permanent years only. Exceptions exist, but they generally come from an award or enterprise agreement that expressly counts casual service, not from the NES.

There are two express exceptions in the Act, and they are worth knowing because they run the other way. Where an employee's status has changed under Division 4A, s.67(1A) says any period during which the employee was a regular casual employee is taken to be continuous service for the 12 month qualifying period for unpaid parental leave, and s.65(2A) does the same for the 12 month qualifying period for a request for flexible working arrangements. So your casual years can get you over the line for parental leave and flexible work, but they do not add a single hour to your annual leave or personal leave balance and they do not build redundancy pay.

Long service leave is a separate question again, because it comes from state and territory law rather than the NES, and several jurisdictions do count long-serving regular casual service. Our guide on whether casuals get long service leave works through it.

A worked example

Priya is a casual retail assistant at a chain that employs 60 people, so it is not a small business employer. She started on 3 March 2026 and is paid $28.00 an hour, which is a base rate of $22.40 plus a 25% casual loading. For months she has worked the same roster: 25 hours a week over five 5-hour days. The store has part-time staff doing identical work, and her manager has never been unable to offer her the shifts.

Frequently asked questions

Does my employer still have to offer me conversion after 12 months?

No. The employer offer obligation and the residual right to request were repealed and their transitional versions closed on 26 February 2025 for most employers and 26 August 2025 for small business employers. Under the current NES the only pathway is employee choice, and it is you who starts it by giving written notice under s.66AAB.

How long does my employer have to respond?

21 days from the day you give the notice, and the response must be in writing. Before responding, the employer must consult you, and if it is accepting it must discuss whether you will be full-time or part-time, what your hours will be, and when the change takes effect. If it refuses, the response must state the reasons.

My employer refused. Can I just send another notice?

Not for 6 months. Section 66AAB(d) blocks a further notice within 6 months of receiving a refusal or of resolving a Division 4A dispute. You can, though, dispute the refusal immediately: try to resolve it at the workplace first, then lodge Form F10A with the Fair Work Commission, which can mediate, conciliate or ultimately arbitrate and order that you be treated as permanent.

Do my casual years count once I convert?

Not for paid leave or redundancy. Annual leave (s.87) and personal/carer's leave (s.96) both accrue for service other than periods of employment as a casual, and s.119(3) excludes casual periods from continuous service for redundancy pay. Both balances start at zero on the change date. The exceptions run the other way: prior regular casual service does count towards the 12 month qualifying period for unpaid parental leave (s.67(1A)) and for a flexible working request (s.65(2A)).

Will I be worse off financially?

It depends on how much unpaid time you currently take. You give up the loading, commonly 25%, and gain 4 weeks of paid annual leave, 10 days of paid personal/carer's leave, paid compassionate leave, paid public holidays, and notice and redundancy protection. If you rarely take time off, the loading may be worth more in cash. If you lose income to illness, holidays or quiet periods, permanent employment usually wins. Model both on the annual leave and personal leave calculators before you decide.

Can my employer cut my hours so I stop qualifying?

No. Section 66L(1) prohibits reducing or varying your hours, changing your pattern of work, or terminating your employment in order to avoid an obligation or right under the Division. Giving a notice and participating in a dispute are workplace rights, so adverse action taken because of them is also a general protections contravention.

Where do the underlying rules come from?

The casual definition is s.15A of the Fair Work Act 2009 and the employee choice pathway is ss.66AAB to 66AAD, sitting inside the National Employment Standards. Our Fair Work Act guide explains how the pieces fit together, the glossary defines the terms used here, and if you are unsure whether you are an employee at all, start with contractor versus employee. You can also browse all our guides, the general FAQ or the sitemap.

Author & reviewer

Sarah Reid, CAHRI

Certified Australian HR Practitioner · Cert IV Payroll · 12 years Fair Work compliance

Sarah has spent over a decade advising Australian SMBs on Fair Work, NES compliance, and payroll. Based in Sydney, she has worked across hospitality, retail and professional services.

Other articles by SarahContact