Casual to permanent: how the employee choice pathway actually works

If your idea of casual conversion is still "after twelve months I have to write to the worker and offer them a permanent job," it's out of date. That system was replaced almost two years ago, and the replacement flips who starts the conversation. Most employers we talk to haven't clocked the change, because the day-to-day feel of it is quiet — until a casual hands you a notice and the 21-day clock starts.

Here's the honest version of how casual-to-permanent works now, what actually triggers it, and — the part that matters if you use labour hire — who owns the obligation when the worker is on your site through an agency.

What changed in August 2024

Two things changed together on 26 August 2024, and they're connected.

First, the definition of a casual employee changed. Under the current rule, someone is a casual only if, when they start, there's no firm advance commitment to ongoing work, and they're entitled to a casual loading or specific casual pay rate. The important word is firm: whether that commitment exists is judged on the real substance and practical reality of the working relationship, not just what the contract says. A contract can call someone casual, but if they've settled into fixed, regular shifts with an obvious expectation the work keeps coming, the label starts to wobble.

Second, the pathway to permanent employment was renamed and rebuilt. "Casual conversion" — where the employer had to proactively offer permanency — became the employee choice pathway. The onus moved. You're no longer required to make the offer. Instead, an eligible casual can notify you, in writing, that they want to change to permanent, and you can only say no for specific reasons.

Who can trigger it

A casual can give written notice to change to permanent (full-time or part-time) under the employee choice pathway if they:

• have been employed for at least 6 months — or 12 months if they work for a small business employer (an employer with fewer than 15 employees), and
• believe they no longer meet the requirements of the casual employee definition.

That second point is the real trigger, and it ties straight back to the definition change. The pathway is built for the worker who was hired as a genuine casual but whose job has quietly become a permanent one in everything but name — same shifts, same roster, week after week, with a clear expectation it continues.

There are a couple of guardrails. A casual can't give notice while they're in an ongoing dispute with you about changing to permanent, or if in the last 6 months you refused a previous notice from them or a dispute about it was resolved. And time worked before 26 August 2024 doesn't count toward the eligibility period.

The 21-day clock

Once a notice lands, the sequence is fixed:

1. Consult first. Before you respond, you have to actually talk to the employee about what would change — whether they'd be full-time or part-time, what their hours would be, and when it would take effect. It's a genuine discussion, not a formality.
2. Respond in writing within 21 days. You either accept the change or you don't, and it has to be in writing within 21 days of the notice.
3. If you accept, the response spells out the new status, the new hours, and when it starts. The change takes effect from the first day of the first full pay period after you give your response, unless you both agree on another day.

You can only refuse for one of a short list of reasons: the employee still meets the casual definition, or there are fair and reasonable operational grounds — for example, accepting would require substantial changes to how the work is organised, would significantly affect how your business runs, or would force substantial changes to the person's conditions to avoid breaking an award or the law. "We'd rather keep them casual" is not on the list. If you refuse, the reason has to be real and you have to explain it.

One related housekeeping change: the Casual Employment Information Statement now goes out more often. Small business employers give it at the start of employment and again after 12 months; other employers give it at the start, after 6 and 12 months, and then every 12 months after that. It's a small admin item that's easy to let slip.

Where labour hire changes who owns this

This is the part worth being plain about, because it trips people up.

When you take on workers through a labour hire provider, the provider is the legal employer of those workers — not you. So if an on-hired casual decides to use the employee choice pathway, their notice goes to the provider, and it's the provider who has to consult, weigh it up, and respond inside 21 days. For the casuals on your site through an agency, this obligation isn't yours to manage. It's ours, in our case.

That has a practical upside for a host business. The compliance load of tracking eligibility, handling notices and getting the response right sits with the provider who is set up to carry it. A provider doing the job properly already knows which of their on-hired casuals are approaching the point where the casual label doesn't really fit, and manages it — rather than being surprised by a notice. It's a fair thing to ask any agency you use: how do you handle employee choice for the people you place with us?

Where it lands back on you is your own direct casuals — the people on your own books. For them, the employee choice pathway is your obligation, full stop, and the 21-day clock is yours to answer.

And there's a familiar trap in the middle. If you've engaged someone directly as a "casual" but they work like a permanent — fixed roster, indefinite, no real ability to knock back shifts — the substance-over-form definition means that label may not hold, and that's exactly the situation employee choice is built to fix. It's the same theme as getting worker classification right in the first place, which we walk through in our piece on ABN vs TFN and sham contracting.

The short version

• Casual conversion by employer offer is gone; since 26 August 2024 the casual initiates, in writing, under the employee choice pathway.
• Eligibility: 6 months employed (12 for a small business), and the worker believes they no longer meet the casual definition.
• You must consult, then respond in writing within 21 days, and can only refuse for the specific reasons in the law.
• For on-hired casuals, the notice and the response are the provider's job, not the host's. For your own direct casuals, they're yours.

If you're weighing up direct casual hiring against labour hire and want to see how the numbers and the obligations actually compare, our breakdown of what casual, labour hire and permanent staff really cost sets it out side by side.

This is general information, not legal advice — the specifics of your workforce, your award and each worker's arrangement matter, so get advice on your own situation before you act on a notice. If you'd rather the employee choice obligations sat with a provider instead of on your desk, get in touch and we'll talk you through how a labour hire arrangement handles it.