"Casual" Workers Winning Permanent Entitlements: The Court Cases Changing Australian Law
Federal Court decisions have ruled that many so-called casual workers are actually permanent employees entitled to leave, redundancy, and back-entitlements. Learn about the landmark cases and your rights.
The problem: employers using casual status to avoid entitlements
For decades, some Australian employers have systematically classified workers as casual to avoid the cost of permanent employment entitlements — paid annual leave, personal/carer's leave, redundancy pay, notice of termination, and other benefits that add approximately 25-30% to the cost of employment. The strategy is simple: label someone a casual, pay a 25% casual loading, and avoid the obligations that come with permanent employment. The problem is that many of these so-called casual workers are casual in name only. They work regular, predictable hours — the same shifts every week, for months or years on end. They have a reasonable expectation of ongoing work. Their employment has all the hallmarks of permanent engagement: regularity, predictability, continuity, and mutual obligation. The 'casual' label on their contract does not reflect the reality of their working arrangement. This practice — sometimes called 'sham casual' employment — affects hundreds of thousands of Australian workers across industries including mining, labour hire, retail, hospitality, aged care, and manufacturing. The Australian Bureau of Statistics estimates approximately 2.7 million Australians are employed as casuals, but research by the Centre for Future Work suggests a significant proportion of these workers display employment patterns indistinguishable from permanent part-time or full-time employees. The courts have been steadily chipping away at employers' ability to maintain this fiction.
WorkPac v Skene (2018): the decision that changed everything
The Federal Court's decision in WorkPac Pty Ltd v Skene [2018] FCAFC 131 was a watershed moment for casual employment law in Australia. Paul Skene was a dump truck operator at a Queensland coal mine, employed through labour hire company WorkPac. He was engaged on a 'casual' basis but worked a regular 7-days-on, 7-days-off roster — the same pattern, at the same mine, for over two years. When his engagement ended, Skene claimed he was entitled to paid annual leave because, despite his contract label, he was not genuinely a casual employee. The Full Federal Court agreed. In a unanimous decision, the Court held that the term 'casual employee' in the Fair Work Act should be given its ordinary meaning — and that the defining characteristic of casual employment is the absence of a firm advance commitment as to the duration of the employee's employment, or the days or hours the employee will work. The Court found that WorkPac had made a firm advance commitment to Skene: he was assigned to a specific project, given a regular roster months in advance, and had a reasonable expectation of continuing work. The label 'casual' on his contract was not determinative — substance prevailed over form. Skene was entitled to paid annual leave, and WorkPac could not offset the casual loading it had paid against that entitlement. The decision sent shockwaves through industries reliant on labour hire and casual engagement, particularly mining and construction.
WorkPac v Rossato (2021): the High Court narrows the door
Following Skene, WorkPac faced a similar claim from Robert Rossato, another dump truck operator employed on a 'casual' basis with regular, predictable rosters. The Federal Court again found in favour of the employee, but WorkPac appealed to the High Court. In WorkPac Pty Ltd v Rossato [2021] HCA 23, the High Court delivered a decision that partially reversed the trajectory. The majority held that whether a person is a casual employee must be determined by reference to the terms of the written contract of employment at the time of entering into the contract — not by reference to the subsequent conduct of the parties or the way the employment relationship actually played out. Because Rossato's written contract gave WorkPac the right (not obligation) to offer shifts and gave Rossato the right to accept or refuse, the High Court found the contract was genuinely casual, even though in practice Rossato worked regular, predictable shifts for years. The decision was controversial. Critics argued it allowed employers to draft contracts that described the engagement as casual while operating it as permanent, effectively insulating the arrangement from scrutiny. However, Parliament responded quickly. The Fair Work Legislation Amendment (Secure Jobs, Better Pay) Act 2022 and subsequent reforms introduced a new statutory definition of casual employment that looks beyond the written contract to the real substance and practical reality of the employment relationship.
The 2021 casual definition reforms: s15A and practical reality
In response to the legal uncertainty created by Skene and Rossato, Parliament enacted a statutory definition of casual employment in s15A of the Fair Work Act 2009 (initially via the Fair Work Amendment (Supporting Australia's Jobs and Economic Recovery) Act 2021, and subsequently amended by the Closing Loopholes Act in 2024). The current s15A, which commenced on 26 August 2024, defines a casual employee by reference to the real substance, practical reality, and true nature of the employment relationship — not merely the written contract. An employee is a casual employee only if the employment relationship is characterised by an absence of a firm advance commitment to continuing and indefinite work according to an agreed pattern of work. The assessment must have regard to the real substance, practical reality, and true nature of the relationship, including but not limited to: whether there is an inability of the employer to elect to offer work, or an inability of the employee to elect to accept or reject work; whether the employee works a regular pattern of hours; whether there is a mutual expectation of continuing employment; and whether the employee is described as a casual in the contract (but this is not determinative). This reform effectively overrides the High Court's Rossato approach of looking only at the written contract. If you work regular, predictable hours for an extended period, with a mutual expectation of ongoing work, you may be a permanent employee regardless of what your contract says.
The casual conversion pathway: your right to become permanent
Beyond the question of whether you were always permanent, the Fair Work Act provides a specific mechanism for casual employees to convert to permanent employment. Under the casual conversion provisions in Division 4A of Part 2-2, employers with 15 or more employees must offer casual conversion to eligible employees. An employee is eligible if they have been employed for at least 12 months and, during the last 6 months of that period, have worked a regular pattern of hours on an ongoing basis that could continue to be worked as a full-time or part-time employee. The employer must assess each casual employee and make an offer within 21 days after the 12-month anniversary. If the employer does not make an offer, or if the employee was not offered conversion, the employee has the right to request conversion (an 'employee choice' notification under the amended provisions). The employer can only refuse on reasonable business grounds — and must provide written reasons. Reasonable grounds include: a significant change in the size or nature of the business, the employee's position ceasing to exist, or significant changes to the hours of work the position requires. 'We prefer casuals' is not a reasonable business ground. If your request is refused and you believe the refusal is not on reasonable business grounds, you can apply to the Fair Work Commission for a dispute resolution order. Our Casual Conversion Checker tool can help you assess whether you meet the eligibility criteria and draft a request to your employer.
Back-entitlements if reclassified: what you could be owed
If you are found to be (or convert to) a permanent employee, the question of back-entitlements arises. A genuinely permanent employee who was misclassified as casual may be entitled to: paid annual leave (4 weeks per year, or 5 weeks for shift workers), personal/carer's leave (10 days per year), compassionate leave, notice of termination and redundancy pay (if the employment has ended), and public holiday pay for public holidays on which they did not work. The potential value of these back-entitlements can be enormous. An employee misclassified as casual for 5 years who worked full-time could be owed approximately 20 weeks of annual leave (worth roughly $30,000-$50,000 at average wages), 50 days of personal leave, and redundancy pay of up to 12 weeks. However, there is an important offset. Section 545A of the Fair Work Act provides that a court must reduce any back-entitlement award by the amount of any identifiable casual loading that was paid. If the employee received a 25% casual loading, that loading can be offset against the back-entitlements — potentially reducing the net amount significantly. The offset does not completely eliminate the claim in most cases, particularly for long-serving employees where the accumulated leave entitlements exceed the casual loading paid. The calculation is complex and depends on the specific amounts paid and owed. Our Leave Entitlements Calculator can help you estimate your potential entitlements, and our Back Pay Calculator can estimate the total value of a back-entitlement claim.
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General information and estimates only — not legal, financial, or tax advice. Always verify with the Fair Work Ombudsman (13 13 94) or a qualified professional.
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