Casual to Permanent Conversion 2026: New Rules, How to Request, and Employer Obligations

For the casual conversion rules were significantly reformed by the Fair Work Legislation Amendment (Closing Loopholes No. 2) Act 2024. The key change is the introduction of the 'Employee Choice' pathway. Previously, employers with 15+ employees had to offer conversion after 12 months.

Now, the focus has shifted: a casual employee can notify their employer that they wish to convert to permanent employment if they believe they no longer meet the definition of a casual employee. The new definition of casual focuses on the real substance, nature, and practical reality of the employment relationship — not just the contract label.

If a casual employee has a regular pattern of hours, a firm advance commitment of ongoing work, and their engagement lacks the characteristics of casual employment, they may have grounds to convert.

Since 26 August 2024, the definition of a casual employee focuses on the real nature of the relationship, not just the contract. An employee is casual only if: there's no firm advance commitment to continuing and indefinite work according to an agreed pattern, AND the employee is entitled to a casual loading or specific casual rate of pay. The 'real substance, practical reality, and true nature' test means the FWC or a court will look at: whether there's a regular pattern of work, whether the employee can accept or reject shifts, whether the roster is set well in advance, whether the employer has a reasonable expectation the employee will be available, and the overall nature of the relationship.

If the reality is that you work regular, predictable hours week after week, you may not truly be a casual — regardless of what your contract says.

Under the Employee Choice pathway, you can give your employer written notification that you believe you aren't a casual employee and wish to convert to full-time or part-time employment. You must have been employed for at least 6 months (or 12 months for small business employees). Your employer then has 21 days to respond.

They must either accept the notification and change your employment status, or they can refuse — but only on one of the following grounds: the employee still meets the casual definition, there are fair and reasonable operational grounds (not to be confused with simply not wanting to convert), or the conversion would not comply with a recruitment or selection process required by law. If you dispute the refusal, you can apply to the Fair Work Commission to resolve it.

Converting from casual to permanent means you gain: paid annual leave (4 weeks per year), paid personal/carer's leave (10 days per year), paid compassionate leave, notice of termination rights, redundancy pay entitlements, and access to flexible work requests and parental leave. You lose: the 25% casual loading, which is designed to compensate for the absence of these entitlements. Your new base rate will typically be your previous hourly rate minus the 25% loading.

For example, if you were paid $31.25/hour as a casual (including loading), your permanent rate would be approximately $25/hour. However, when you factor in the value of paid leave and job security, most employees are financially better off as permanent employees — especially those working regular, full-time hours.