Employee Choice Pathway - Conversion from Casual to Permanent Employment

Introduction.

The casual conversion provisions in the Fair Work Act 2009 commenced on 27 August 2021. The latest amendment called Employee Choice Pathway commences on 26 August, 2025 for a small business.

What is Employee Choice Pathway?

Employee choice pathways allows an eligible casual employee to choose to convert from casual to full-time or part-time permanent employment or choose to remain as a casual employee.

Who is eligible?

A casual employee who:

o   Has been engaged for 12 months from the 26 August 2025

o   Believe they no longer meet the definition of a casual employee

o   Engaged immediately before 26 August 2024

Definition

A person is a casual employee if, when they start employment:

o    The employment relationship has no firm advance commitment to ongoing work, considering several factors, and

o    They’re entitled to a casual loading or specific casual pay rate under an award, registered agreement, or employment contract.

Making a Notice

A casual can provide written notice to their employer to change to permanent (full-time or part-time) employment under the employee choice pathway if they:

o    Have been employed for at least 12 months for a small business, and

o    Believe they no longer meet the Fair Work definition for a casual employment

Responding to a Notice

The employer must respond in writing to the employee within 21 days of the employee giving the notice, either:

o    Accepting the change, or

o    Not accepting the change

Agreement

If the employer accepts the change, the written response must include information about:

o    The casual employee’s new employment status - full-time or part-time

o    The employee’s new hours of work

o    When the change to a permanent role will take effect

Changes must take effect from the first day of the employee’s first full pay period starting after the employer gives their response, unless the parties have reached a different agreement.

Non-agreement

If the employer doesn’t accept the change, the written response must include the reasons for the decision.

Reasons can only be any of the following:

o    The employee still meets the definition of a casual employee

o    There are fair and reasonable operational grounds for not accepting the notification, such as:

·         Substantial changes would be required to the way work in the employer’s business is organised

·         There would be significant impacts on the operation of the employer’s business, or

·         Substantial changes to the employee’s employment conditions would be necessary to ensure the employer doesn’t break rules such as in the award that applied to the employee.

o    Accepting the change would mean the employer won’t comply with a recruitment or selection process required by law.

Protections at Work

An employer can’t take certain actions to avoid their obligations or an employee’s right to change to permanent employment including:

o    Reducing or varying an employee’s hours of work

o    Changing an employee’s pattern of work, or

o    Terminating an employee’s employment

Casual employees are also protected against adverse action by an employer because they have a workplace right, including their right to:

o    Notify their employer that they believe they no longer meet the definition of a casual employee

o    Receive a written response from their employer about their notice

o    Participate in a dispute about changing to permanent employment

Disputes

Currently, the Fair Work Commission can only deal with disputes about Casual Conversion by arbitration if both sides agree to it.

In summary.

o   From 26 August 2025 provisions for Employees Choice Pathway (casual conversion) commences for small businesses

o   The employee may submit a notice to their employer requesting a change in employment status from casual to permanent full-time or part-time employment

o   The employer has 21 days to provide a written response to the employee

o   If the employer agrees the change in employment status may commence at the beginning of the next pay cycle - unless the parties have reached another agreement

o   The employer may under certain criteria disagree with the notice

o   If the parties cannot agree a dispute may be lodged to be heard by a Fair Work Commission member– both parties must agree for the arbitration to occur

 Rules surrounding Small Business and the Right to Disconnect have also changed. Read more here: Small Business and the Right to Disconnect | MTA NSW