Last reviewed: August 2026

What actually changed under the Closing Loopholes No. 2 reforms, and does it still apply to your business? The rules affecting casual employment took effect on 26 August 2024 and remain in force today. Here's what you need to know.

For businesses wanting, or needing, casual employees as part of their workforce, these changes reshaped how you define and manage casual employment. Here's what changed and what you still need to have in place.

What’s Changing?

The changes included:

1. A new definition of ‘casual employee’
2. A new pathway for casual conversion
3. New protections for casual employees

Definition of a Casual Employee

An employee counts as casual if:

• The employment relationship lacks a firm advance commitment to ongoing and indefinite work.
• The employee gets a casual loading or specific rate under a Fair Work instrument or employment contract.

Consideration will be given to the ‘real substance, practical reality and true nature’ of the employment relationship. Some of the factors that will form part of the considerations will include whether:

• The employer can choose to offer or not offer the employee work.
• The employee can choose to accept or reject an offer of work.
• The employee has a regular pattern of work.
• There are full-time or part-time employees within the business delivering the same work.
• It is reasonably likely that there will be future work available similar to what the employee usually performs.

What this essentially means is that when determining whether an employee meets the definition of a casual employee or not, a casual contract is simply not enough to make a decision with. Multiple factors now come into play, including how things are really playing out on a week to week basis, with a regular pattern of work likely to weigh heavily in determining whether employment is permanent or casual.

A well crafted and legal employment contract should still be provided to your employees as best practice, with specific clauses explicit to casual employment status. This change ultimately represents a major shift from a contract only assessment towards a practical reality and pattern based assessment.

For a deeper look at what counts as a regular pattern of work, see our companion piece, What Is Regular and Systematic?.

The New Pathway for Casual Conversion

Before this change, the law required employers to offer all casual employees the opportunity to convert to permanent employment after 12 months of regular and systematic employment.

The change moves the onus for initiating a casual conversion request from the employer to the employee. The employee must now notify their employer in writing that their employment no longer satisfies the definition of casual employment (after 6 months in a medium or large business, or 12 months in a small business of fewer than 15 employees), and request to convert to either permanent part time or permanent full time employment.

How Employers Must Respond

• The employer must genuinely consult with the employee to discuss their request and then provide a written response to the employee within 21 days.  The employer can either:
  • Accept the notification – the employee will then shift to permanent full time or part time employment.
  • Refuse the request based on one or more of the following reasons:
    • The employee still meets the definition of a casual employee.
    • There are ‘fair and reasonable operational grounds’ for refusal. (E.g. Significant changes to the work is conducted or the way business is organised would be required to accommodate the change).
    • Acceptance of the change would contravene a recruitment or selection process required by law.

Employees cannot submit a notification to change to permanent employment if:

• They are already involved in a dispute with their employer regarding casual conversion, or
• In the last 6 months:   
  • They had a notification refused by an employer.
  • A dispute with an employer about casual conversion was resolved.

The New Protections for Casual Employees

Employers must also be aware that they must not take certain actions to avoid their obligations under the employee choice pathway. This includes:

• Dismiss or threaten to dismiss a permanent employee with the plan to re-engage them as casual.
• Make any false claims regarding casual employment, for example telling someone they would be better off financially if they choose casual.
• Reducing or varying the casual employee's hours of work where there is no genuine business need to do so.

Changing the casual employee's hours of work simply to avoid their rights under the employee choice pathway.

Casual Employment Information Statement

Prior to the change in August 2024, the Casual Employment Information Statement (CEIS) needed to be provided to a new casual employee when they commenced working with you. This obligation has now increased, and employers are now required to provide the CEIS again at these points:

Make sure you diarise this obligation so it isn't overlooked. We recommend posting a physical CEIS in your lunchroom to help meet your obligations here.

What You Need to Do

If you do employ casual workers, you will need to review their patterns of work and make sure they meet the new definition. Be across the new pathway to casual conversion and be aware of the 21 day response time should you receive a notification from an employee. You will also need to comply with award requirements when it comes to remuneration and casual loadings.

The changes also brought with them the potential for hefty civil penalties for breaching the rules, so if you are unsure of what changes you need to make or how to communicate with employees, please contact the HR Staff n’ Stuff team to discuss.

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