A casual just asked to go permanent. Now what?
One of your long-standing casuals hands you a letter. They want to become permanent. If your first reaction is "can they even do that?", you're not alone. Since the Fair Work rules changed in August 2024, casuals have a clear pathway to ask for permanent work, and small businesses are now fully in the frame. The pathway is called employee choice, and it puts the ball in the employee's court in a way the old rules didn't.
Here's the thing. You don't have to say yes automatically. But you do have to follow a process, respond in writing, and only refuse for specific reasons. Get the process wrong and you're exposed, not because you made the wrong call, but because you skipped a step. So let's walk through it the way it actually plays out.
What changed, and why it matters for small business
From 26 August 2024, the way someone becomes a casual, and the way they stop being one, both shifted under the Fair Work Act.
The old "right to request" and employer-offer conversion rules are gone. In their place sits the employee choice pathway, where an eligible casual notifies you in writing that they believe they no longer fit the casual definition and want to convert.
For small businesses, the timing was staggered. If you employ fewer than 15 people, a casual you had on the books before 26 August 2024 could start using this pathway from 26 August 2025. Casuals hired after that date reach eligibility once they've clocked up 12 months. So through 2026, more and more of your long-term casuals are hitting that mark. This isn't a future problem. It's a now problem.
Are you actually a "small business" here?
It matters, because small businesses get a longer eligibility window and slightly different obligations. A small business employer is one with fewer than 15 employees at the relevant time. When you count heads, include employees of associated entities, and include casuals only if they work on a regular and systematic basis. Occasional, here-and-there casuals don't count toward the 15.
Who can give you a notice
A casual can give you written notice to convert if they:
- have been employed for at least 12 months (that's the small business figure; it's 6 months for larger employers), and
- believe they no longer meet the definition of a casual employee.
One quirk worth knowing: employment before 26 August 2024 doesn't count toward that eligibility clock. So the 12 months runs from the new rules starting, not from the day they first walked in.
There are also times a casual can't give notice. They can't if they're already in an unresolved dispute with you about converting, or if in the last 6 months you refused an earlier notice or a conversion dispute between you was resolved. For casuals you employed before 26 August 2024, they also can't give notice if, in the last 6 months, they knocked back a conversion offer, you told them in writing you wouldn't be making one, or you refused an earlier request.
What "no longer a casual" really means
This is where a lot of managers get stuck, so it's worth slowing down.
Since August 2024, someone is a casual if there's no firm advance commitment to ongoing work and they get a casual loading or a specific casual pay rate. The test isn't just what the contract says. Fair Work looks at the real substance, practical reality and true nature of the working relationship.
A few things they weigh up:
- Whether it's reasonably likely there'll be ongoing work of the kind the person usually does, given how your business runs.
- Whether you've got full-time or part-time staff doing the same work.
- Whether the person works a regular pattern, even one that shifts a bit around leave or quiet periods.
No single factor decides it. A regular roster on its own doesn't make someone permanent. But if you've had the same person working set shifts for a year, with work that's clearly going to keep coming, you can see how the "casual" label starts to wobble.
The process, step by step
Once a valid notice lands, the clock starts. Here's what you actually have to do.
1. Consult first
Before you decide anything, you have to talk to the employee. That means a genuine conversation about what would change if they convert: whether they'd be full-time or part-time, what their hours would look like, and when the change would kick in. This isn't a tick-box. It's meant to be a real discussion.
2. Respond in writing within 21 days
You've got 21 days from the date of the notice to give a written response, either accepting or not accepting the change. Miss that window and you're offside, full stop.
3a. If you accept
Your written response needs to spell out their new status (full-time or part-time), their new hours, and when the change takes effect. By default, the change starts from the first day of their first full pay period after you give your response, unless you both agree on a different day.
3b. If you say no
You can refuse, but only for specific reasons, and you have to put those reasons in writing. The allowed grounds are:
- the person still meets the casual definition
- there are fair and reasonable operational grounds, for example, you'd have to substantially reorganise how the work gets done, it would significantly hit your operations, or you'd have to substantially change their conditions to keep complying with an award or agreement, or
- accepting would mean you couldn't comply with a recruitment or selection process required by law.
"I'd just rather keep them casual" isn't on that list. The reason has to be real, and it has to be one of these.
What you absolutely can't do
This part trips people up, so read it twice. You can't dodge your obligations by quietly changing the goalposts. That means you can't cut or vary someone's hours, change their work pattern, or terminate them to get around the conversion rules. Casuals are also protected from adverse action for using this pathway at all, whether that's giving notice, asking for your written response, or raising a dispute.
If a disagreement can't be sorted at the workplace, it can go to the Fair Work Commission. They'll usually try mediation or conciliation first, and if that doesn't land, they can arbitrate and make a binding decision. Far better to get the process right at your end than to end up there.
One easy obligation people forget
While we're here: the Casual Employment Information Statement. You have to give it to every new casual before they start, or as soon as possible after. And if you're a small business, you have to give it to them again after 12 months. Larger employers do it at 6 months, 12 months, and every 12 months after. It's a small thing that's easy to let slip, and it's exactly the kind of detail that comes up if a dispute ever does.
The short version
A casual can now tell you in writing they want to go permanent. If they've been with you 12 months (for small business) and reckon they no longer fit the casual definition, you have to consult, then respond in writing within 21 days, and you can only knock it back for set reasons. You can't reshuffle their hours or end their job to avoid it. Handle it calmly and on paper, and most of these are straightforward.
This is general information, not legal advice. The rules can change and every situation is different, so if you're unsure about a specific case, check the current guidance at fairwork.gov.au or get advice that fits your circumstances.
Need the conversation on paper?
Most of getting this right comes down to documenting the discussion and your decision properly. If you'd rather not start from a blank page, our editable HR templates are built for exactly these moments, written in plain English and grounded in Fair Work principles. If you're also managing a casual whose performance is part of the picture, the Performance Improvement Plan Template Pack gives you a clear, fair structure to work from. Download, edit, done.