By Natasha Silveira | 4 October 2026 | 9 min read
Here is the first thing to know about casual conversion rules in 2026: there is probably nothing for you to offer. The duty on larger employers to offer conversion at the 12-month mark was repealed, and the last version of it closed on 26 August 2025. What replaced it puts the first move with the employee, and gives you 21 days to answer. This guide covers who qualifies, what a notice obliges you to do, when you can say no, and what happens if you get it wrong.
Key takeaways
- The old duty to offer casual conversion is gone. Casuals now start the process themselves.
- Eligibility is 6 months of service, or 12 months if you employ fewer than 15 people.
- You must consult, then respond in writing within 21 days of the notice.
- There are only three lawful grounds to refuse, and your written reasons must name one.
- Larger employers reissue the Casual Employment Information Statement at 6 months, 12 months, then yearly.
Casual conversion rules now run on employee choice
Under the Closing Loopholes changes, the pathway from casual to permanent is called the employee choice pathway. It sits in the National Employment Standards at sections 66A to 66M of the Fair Work Act. A casual who meets the service test and believes they no longer fit the legal definition of a casual gives you written notice. Until that notice arrives, you have no conversion duty at all.
The old system worked the other way around. Employers with 15 or more staff had to review eligible casuals at 12 months and put an offer in writing (Fair Work Ombudsman). If you still have that diary reminder running, it is doing nothing useful.
The old offer duty vs the employee choice pathway
Before: employer offer (repealed)
You started it - Larger employers assessed eligible casuals at 12 months and made a written offer.
Based on work pattern - A regular pattern over the previous 6 months triggered the duty.
Small business exempt - Fewer than 15 employees meant no offer duty, only a residual right to request.
Closed for good - The last transitional version ended on 26 August 2025.
Now: employee choice
The employee starts it - Nothing is required of you until written notice arrives.
Based on the definition - The employee must believe they no longer fit the casual definition in section 15A.
Small business included - Fewer than 15 employees means a 12-month qualifying period, not an exemption.
A clock you can miss - 21 days to consult and reply in writing, with reasons if you decline.
Who Qualifies to Give Notice
Two tests, both of which must be met:
- Service. At least 6 months with you, or 12 months if you are a small business employer with fewer than 15 employees. Service before 26 August 2024 does not count.
- Belief. The employee believes they no longer meet the casual definition in section 15A, which turns on whether there is a firm advance commitment to continuing and indefinite work.
Some casuals are locked out for a period. A casual cannot give notice while a conversion dispute with you is on foot, or if in the past 6 months you refused a notice from them or a dispute about one was resolved. That gives you breathing room after a decision, not a way to reset the clock each time.
What you must do in 21 days
The notice starts a clock, and the sequence is fixed:
- Consult first. Talk to the employee about what changes if you accept: full-time or part-time, what the hours would be, and when it starts.
- Respond in writing within 21 days of the notice, accepting or not accepting.
- If you accept, the response states the new status, the new hours, and the date the change takes effect.
- If you decline, the response states your reasons.
A change takes effect from the first day of the first full pay period starting after you give your response, unless you both agree on another date. Tell payroll that day. Once someone is permanent, casual loading stops and leave starts accruing.
When you can refuse, and on what grounds
You can refuse, but only for one of three reasons. Commercial inconvenience on its own is not one of them.
- The employee still meets the casual definition.
- There are fair and reasonable operational grounds, such as substantial changes to how work is organised, significant impacts on the business, or changes to conditions that would put you in breach of an award or agreement.
- Accepting would mean failing to follow a recruitment or selection process required by law, which mainly affects public sector and some funded roles.
Write the reasons out properly. A one-line refusal is the kind that ends up in front of the Fair Work Commission, which can arbitrate the dispute if you cannot sort it out at work.
One more trap. You cannot cut someone’s hours, change their roster pattern or end their employment to dodge a notice. That is both an avoidance breach and likely adverse action, because giving notice is a workplace right.
The numbers that run the process
6 months
Service before a casual can give notice, if you employ 15 or more people
12 months
Service required if you are a small business employer, under 15 people
21 days
To consult and give a written response after the notice arrives
3 grounds
The only lawful reasons to decline, and you must name one in writing
Source: Fair Work Act 2009, sections 66A to 66M; Fair Work Ombudsman
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The Casual Employment Information Statement
Separate obligation, and the one most often missed. Every casual gets the Casual Employment Information Statement before they start or as soon as possible after, alongside the Fair Work Information Statement. Then you reissue it:
- Small business, under 15 employees: again after 12 months of employment.
- 15 or more employees: again after 6 months, after 12 months, and after every further 12 months.
Set the reminders in your payroll system rather than someone’s calendar. If a casual has been with you three years and you employ 20 people, that is five issues on file by now.
Records: what to keep and for how long
Employee records run for 7 years and must be legible, in English, and available to a Fair Work Inspector. For casuals the basics matter more than usual: the basis of employment, and the hours worked each day, since casuals have no exemption from hour-by-hour records.
On top of that, keep a file for anything conversion related: the notice itself with the date you received it, notes from the consultation, your written response, and the date each information statement went out. If a decision is challenged two years later, that file is your evidence. Nothing else will do the job.
What happens if you get it wrong
Missing the 21-day response, refusing on a ground that isn’t in the Act, or never issuing the statement are all breaches of the National Employment Standards. Court-ordered penalties currently reach $21,840 per contravention for an individual, $109,200 for a company with fewer than 15 employees, and $546,000 for a larger company, with far higher figures for serious contraventions (Fair Work Ombudsman).
The bigger cost is usually the misclassification sitting underneath. A long-term casual found to have been permanent brings a claim for annual leave, personal leave and public holidays across the whole period. Loading already paid can often be offset, which softens the number without making it go away.
Most of this is systems, not law. Reminders that fire, contracts that match the roster, and one named person who knows what a notice looks like. VeiraMal HR support services put those in place, and our outsourced HR services handle the consultation and the written response when a notice lands. Our Fair Work compliance checklist covers the wider obligations that sit alongside this one. For a quick read on your casual workforce, send a message through the contact form.
How VeiraMal works
Step one
We advise
We review your casual roster against the definition and tell you where the real exposure sits.
Step two
You approve
You see the recommended response and what it means for cost and rostering before anything is sent.
Step three
We execute
We draft the consultation, the written response and the records that back the decision up.
Frequently Asked Questions
1. Do employers still have to offer casual conversion after 12 months?
No. That duty was repealed. Employers with 15 or more staff once had to assess eligible casuals at 12 months and make a written offer, and the transitional version of it closed on 26 August 2025. Today you respond to notices rather than initiating anything. The practical risk has moved from missing an anniversary to mishandling a notice, or to rostering a casual like a permanent and leaving the gap open.
2. Can a casual give notice if they have only been with us a few months?
Not under the employee choice pathway. They need 6 months of service, or 12 months if you employ fewer than 15 people. Service before 26 August 2024 doesn’t count. A casual also can’t give notice if you refused one in the previous 6 months, or if a dispute about an earlier notice was resolved in that time. You can still agree to make someone permanent at any point.
3.What if we miss the 21-day deadline?
You have breached the National Employment Standards, and that is a civil remedy provision the Fair Work Ombudsman can act on. The employee can also take the dispute to the Fair Work Commission, which can arbitrate if you cannot resolve it at work. The safest fix is to respond as soon as you notice, in writing, with reasons if you are declining, and to record why the delay happened.
4.Does paying casual loading mean we are safe?
Not on its own. Loading is part of the test, but the other part is whether there is a firm advance commitment to continuing and indefinite work. If someone has worked the same shifts for a year and you keep offering them, a tribunal may find the relationship stopped being casual whatever the contract says. Loading already paid can usually be offset against permanent entitlements, which limits the damage without removing the risk.
5.How often do we have to give out the Casual Employment Information Statement?
Every casual gets it before they start, or as soon as possible after. If you employ fewer than 15 people, you give it again after 12 months. If you employ 15 or more, you give it again at 6 months, at 12 months, and after each further 12 months. Record the date each time, because proving you sent it is the part most businesses cannot do.
Get your casual workforce on solid ground
VeiraMal reviews your headcount, contracts, policies and termination process against the obligations that actually apply to your size. Businesses in Melbourne, Sydney and Hobart.
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