In our conversations with business owners lately, one thing keeps coming up: many are not aware that the rules around casual employment changed back in 2024, and that the way they engage and document their casuals may no longer hold up.
It is an easy one to miss. The change was not loud, but it was significant. Since 26 August 2024, calling someone a casual is no longer enough to make them one.
The Closing Loopholes reforms changed the definition of casual employment, and with it the way employers need to think about casual contracts. A written contract that says “casual” still matters, but on its own it no longer settles the question. What now governs casual status is the real substance and practical reality of the working relationship. If it has been a while since you looked at your casual arrangements, now is a good time.
What “casual” now means
Under the current definition, a person is a casual employee only if two things are true at the start of employment. First, the employment relationship has no firm advance commitment to continuing and indefinite work. Second, the employee is entitled to a casual loading or a specific casual rate of pay under an award, enterprise agreement or their contract.
The phrase that carries the weight is “no firm advance commitment”. Whether that commitment exists is assessed on the real substance of the relationship, not just the words in the contract. The Fair Work Act points to several considerations: whether the employer can choose to offer work and the employee can choose to accept or reject it, whether continuing work is likely to be available in the kind of work the employee does, whether permanent employees are doing the same work, and whether there is a regular pattern of work. A regular pattern does not, by itself, make someone permanent, but a settled, predictable and ongoing arrangement can point away from genuine casual employment.
The practical consequence is simple to state. If you engage someone as a casual, pay the loading and paper it correctly, but roster them on the same fixed shifts week after week with an evident mutual expectation that the work continues, the label may not hold. The relationship, not the paperwork alone, is what a court or the Fair Work Commission will look at.
What a casual contract still needs to do
None of this makes the written contract less important. It makes it more important, because it is your first line of evidence and the place you set the terms clearly. A sound casual contract should:
- state plainly that the person is engaged as a casual employee;
- identify the casual loading, commonly 25 percent, but check the relevant award or agreement, and state that it is paid in lieu of the entitlements casuals do not receive, such as paid annual and personal leave, notice of termination and redundancy pay;
- make clear there is no firm advance commitment to ongoing work, that each engagement is a separate engagement, and that hours are not guaranteed and may be offered and declined; and
- reflect how you actually intend to engage the person, so the document and the day-to-day reality line up.
That last point is the one that has changed in emphasis. The contract needs to match the working arrangement, not paper over it.
The casual loading, and why the wording matters
The casual loading is not just a number on a payslip. If a casual is later found to have been, in truth, a permanent employee, the loading you have already paid can generally be set off against claims for the entitlements they would have received, but usually only where the contract has identified the loading as compensating for those specific entitlements. Loose wording here can cost you the offset. Precise wording protects it.
The Casual Employment Information Statement
Every casual must be given the Casual Employment Information Statement, before they start or as soon as practicable afterwards. You then need to give it again during their employment: for most employers after six months, after twelve months, and every twelve months after that; for small business employers, after twelve months. It is a small administrative step that is easy to miss and easy to get right, and the Fair Work Ombudsman does look for it.
The employee choice pathway to permanent work
The old casual conversion process has been replaced by an employee choice model. A casual who has been employed for at least six months, or twelve months in a small business, and who believes they no longer meet the casual definition, can notify you in writing that they want to become permanent. You must consult with them and respond in writing within twenty one days, either accepting the change or refusing it. You can only refuse on limited grounds, for example that the employee still meets the casual definition, or for genuine operational reasons, and your written response has to explain the basis for a refusal. Getting that response right, and on time, matters.
The net observation
Casual employment is still a legitimate and useful arrangement, and nothing here suggests avoiding it. What has changed is that the label now has to be earned by the substance of the relationship, not just asserted in the contract. The employers who stay on the right side of this do three things together: they use a properly drafted casual contract, they give the Casual Employment Information Statement on time, and they make sure the way they actually engage their casuals matches the casual description. Where those three line up, casual employment remains straightforward. Where they drift apart, the risk sits with the employer.
If you would like your casual contracts reviewed against the current definition, or you are weighing up whether a long-standing casual is still genuinely casual, that is exactly the kind of question worth getting a second set of eyes on before it becomes a dispute. I am happy to help: emilie@hrautomate.au.
This article is general information current as at August 2026 and is not legal advice. The rules for casual employment are set by the Fair Work Act and the applicable award or enterprise agreement, and how they apply depends on your circumstances. For a specific matter, obtain advice.
Principal, HR Automate. Senior HR and industrial relations practitioner.