March 2021 – What you need to know

Entitlement for casuals to convert to permanent employment after 12-months of employment.

Small business (this is businesses with less than 15 employees)

  • no obligation to offer casual conversion.
  • obligation to consider any requests for casual conversion.

 Business with more than 15 employees

  • Transitional period of 6 months (ending 26 September 2021)
  • Requirement to assess existing casual workforce before 27th September 2021 and where it is appropriate to do so offer casual conversion.


 New Definition of a casual

 15A – Meaning of a casual

  • A person is a casual employee of an employer if;
    1. An offer of employment made by the employer to the person is made on the basis that the employer makes no firm advance commitment to continuing and indefinite work according to an agreed pattern of work for the person; and
    2. The person accepts the offer on that basis; and
    3. The person is an employee as a result of that acceptance.
  • For the purpose of subsection (1), in determining whether, at the time the offer is made, the employer makes no firm advance commitment to continuing and indefinite work according to an agreed pattern of work for the person, regards must be had only to the following consideration.
    1. Whether the employer can elect to offer work and whether the person can elect to accept or reject the work.
    2. Whether the person will work as required according to the needs of the employer.
    3. Whether the employment is described as casual employment
    4. Whether the person will be entitled to a casual loading or a specific rate of pay for casual employees under the terms of the offer or a fair work instrument.
  • To avoid doubt, a regular pattern of hours does not of itself indicate a firm advance commitment to continuing and indefinite work according to an agreed pattern of work.
  • To avoid doubt, the question of whether a person is a casual employee of an employer is to be assessed on the basis of the offer of employment and the acceptance of that offer, not on the basis of any subsequent conduct of either party.
  • A person who commences employment as a result of acceptance of an offer of employment in accordance with subsection (1) remains a casual employee of the employer until.
    1. The employee’s employment is converted to full-time or part-time under division 4A of part 2-2; or
    2. The employee accepts an alternative offer of employment (other than as a casual employee) by the employer and commences work on that basis.


Important Considerations
  • Newly engaged casual need to have contracts that reflect the new definition.
  • New definition applied from the time employment commences. Existing casual employers or casuals cannot simply bring them in line with the new definition by providing a new contract. They need to follow the process.
  • Recommended so that employers can take advantage of the off-set rule to provide all existing and new casual employees with new contracts.


  • Where an employee is engaged as a casual, but it is later determined that they are in reality a perm employee an employer will be able to off-set any causal loading paid to the employees against any permanent entitlements that arise (e.g., Annual Leave etc)
  • In order to have the benefit of this offset arrangement, the following requirements must be followed.
    • The employment must be described and identified as casual employment.
    • The casual loading paid must have had components that can be identified as being paid to the employee instead of one or more perm employee entitlements.


Employment contracts for casuals should contain the following.
  •  Employment type – casual
  • Work will be offered on an as and when needed basis.
  • Employee may accept or decline work offered by the employer.
  • Casual rates of pay and entitlements are in satisfaction of Award/EA rates including casual loading.
  • Casual loading is expressed as a separately identifiable amount, paid in compensation for the employee not having at least one of more of the following entitlement;
    • Paid annual leave;
    • Paid personal/ carers leave;
    • Paid compassionate leave;
    • Payment for absence on a public holiday;
    • Payment in lieu of notice of termination; or
    • Redundancy pay.


What you need to do
  • Non-small business;
    • Need to assess and notify all existing casuals before 27th September 2021.
    • Going forward, need to offer conversion after 12-months service – make a note of when this is coming up.
  • Small business
    • Need to respond to conversion requests as they arise.

Make sure offers of employment reflect the new arrangement and that this is reflected in the wording of contracts.

If you need help or support in your casual employment arrangements then please book in a 30-minute FREE discovery session with our team using the below button.