How casual employment is legally defined
Under the Fair Work Act 2009 (Cth), a person is a casual employee if, when they start employment, two conditions are met: the employment relationship has no firm advance commitment to ongoing work, and the employee is entitled to a casual loading or specific casual pay rate.
Whether there is a “firm advance commitment” is assessed on the real substance, practical reality, and true nature of the relationship. No single factor is decisive. The Fair Work Ombudsman lists the following factors to consider:
- Whether the employer can offer or not offer work to the employee
- Whether the employee can accept or reject work
- Whether it is reasonably likely there will be future work available
- Whether full-time or part-time employees perform the same kind of work
- Whether the employee has a regular pattern of work (note: a regular pattern alone does not make someone permanent)
An employee who works the same shifts every week can still be a casual if there is no firm advance commitment to ongoing work. The label on the contract matters, but so does the practical reality of the arrangement.
Fair Work Ombudsman, Casual employees (updated December 2025). Legislative reference: Fair Work Act 2009 (Cth) s.15A.
What casuals do and do not get
Casual and permanent employees receive different entitlements under the NES. The comparison below is sourced directly from the Fair Work Ombudsman:
| Entitlement | Full-time / Part-time | Casual |
|---|---|---|
| Paid annual leave | 4 weeks per year (s.87) | No |
| Paid personal/carer's leave | 10 days per year (s.96) | No |
| Unpaid carer's leave | Yes | 2 days per occasion |
| Unpaid compassionate leave | Yes (2 days/occasion, paid) | 2 days per occasion (unpaid) |
| Paid family and domestic violence leave | 10 days per year | 10 days per year |
| Unpaid community service leave | Yes | Yes |
| Notice of termination | Yes (ss.117) | No |
| Redundancy pay | Yes (after 1 yr, ss.119-121) | No |
| Long service leave | Yes (state law) | Varies by state |
Casual employees can also request flexible working arrangements and take unpaid parental leave if they have been employed on a regular and systematic basis for at least 12 months and reasonably expect to continue on that basis.
Fair Work Ombudsman, Casual employees. Legislative references: Fair Work Act 2009 (Cth) ss.15A, 65, 66A-66K, 67, 102, 104, 106, 108.
The casual loading
In lieu of paid leave and notice entitlements, casual employees receive a casual loading: a higher hourly pay rate. The most common rate under modern awards is 25% on top of the ordinary time rate. The loading compensates for the absence of paid annual leave, paid personal leave, notice of termination, and redundancy entitlements.
The exact loading depends on your award or registered agreement. Award-free casuals are entitled to a casual loading under the national minimum wage order. Use the Fair Work Ombudsman's Pay and Conditions Tool to check the minimum casual rate for your award.
Josh works as a casual bartender. His award base rate is $24.00/hr. With the 25% casual loading, he is paid $30.00/hr. He does not accrue annual leave or personal leave, but he does receive the higher hourly rate to compensate for those missing entitlements.
Converting to permanent employment
From 26 August 2024, the pathway for casuals to convert to permanent employment changed from “casual conversion” to the employee choice pathway (Fair Work Act 2009 ss.66A-66M).
Under the employee choice pathway, a casual can give their employer a written notice of intention to change to permanent (full-time or part-time) employment if they:
- Have been employed for at least 6 months (or 12 months for small business employees), and
- Believe they no longer meet the definition of a casual employee.
The employer must respond in writing within 21 days, either accepting the change or refusing it. Refusal is only permitted on limited grounds: the employee still meets the casual definition, there are fair and reasonable operational grounds for refusal, or accepting would require the employer to breach another legal obligation.
An employer cannot reduce or vary an employee's hours, change their pattern of work, or terminate their employment to avoid their obligations under the employee choice pathway.
Fair Work Ombudsman, Becoming a permanent employee (updated October 2025). Legislative reference: Fair Work Act 2009 (Cth) ss.66A-66M.
Sham casual arrangements
A sham arrangement occurs when an employer engages a worker as a casual to avoid paying the entitlements that would apply to a permanent employee. It is illegal for an employer to:
- Knowingly make a false statement to convince a current or former permanent employee to enter into a casual contract to perform the same (or mostly the same) work, or
- Dismiss or threaten to dismiss an employee in order to re-engage them as a casual to do the same work.
Courts can impose civil penalties for sham arrangements. If you believe you are in a sham casual arrangement, contact the Fair Work Infoline on 13 13 94 between 8am and 5:30pm Monday to Friday.
Key takeaways
- A casual employee has no firm advance commitment to ongoing work. Regular hours alone do not make someone permanent under the Fair Work Act (s.15A).
- Casuals do not accrue paid annual leave or personal leave. They receive a casual loading (typically 25%) to compensate.
- Casuals do get paid family and domestic violence leave (10 days per year), unpaid carer's leave, and unpaid community service leave.
- After 6 months employment (12 months in small business), casuals can use the employee choice pathway to notify their employer of their intention to convert to permanent status.
- Sham casual arrangements are illegal under ss.359B-359C of the Fair Work Act 2009.
Author & reviewer
Sarah has spent over a decade advising Australian SMBs on Fair Work, NES compliance, and payroll. Based in Sydney, she has worked across hospitality, retail and professional services.