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In mid-2020 we detailed the ruling in Workpac v Rossato concerning casual workers and how it could affect your business. Since then, however, significant legal developments have occurred, and as of 2025 it’s vital that you are up to date with the latest law on casual employees.
In 2025, the legal landscape around casual employment continues to evolve, so it’s time for an update.
As a business owner, it is crucial that you stay informed about any changes to the law that affect casual workers.
Let’s break it down.
Why All The Fuss? A Quick Re-Cap
Back in May 2020, the Federal Court in the case of Workpac v Rossato initially held that if a casual employee worked regular and systematic hours with ‘predictable periods of working time,’ they were entitled to certain benefits, namely:
- Personal leave
- Compassionate leave
- Public holiday payments
The Court emphasised that if the nature of a casual employee’s work closely resembles that of a permanent employee, then leave entitlements should ideally be considered on the basis of the objective nature of their role rather than simply the ‘casual’ label.
This initial decision aimed to provide casual workers with the security and benefits typically reserved for permanent employees when they worked regular and systematic hours. However, subsequent appellate reviews and legislative clarifications have since refined the legal position.
On 17 June 2020, Workpac sought special leave to appeal the Federal Court’s decision in the High Court of Australia, a process that culminated in a reversal of the initial enhanced entitlements.
The Current Law
At present, Fair Work Australia maintains that a casual employee:
- Has no guaranteed hours of work
- Usually works irregular hours
- Doesn’t receive paid sick or annual leave
- Can end their employment without notice (unless notice is required by a registered agreement, award, or employment contract)
Currently, casual workers are entitled to:
- Casual loading – a higher rate than that of permanent employees to compensate for the lack of paid leave and other benefits
- 2 days’ unpaid carer’s leave
- 2 days’ unpaid compassionate leave per occasion
- 5 days’ unpaid family and domestic violence leave (within a 12 month period)
- Unpaid community service leave
All of the above reflects the current law applicable to your business and its casual employees.
While the initial Rossato decision appeared to open the door for casual employees to claim permanent-style leave entitlements, on 4 August 2021 that ruling was overturned. In the aftermath, the High Court confirmed that casual workers remain entitled only to their legislated benefits under the Fair Work Act.
Furthermore, legislative amendments introduced in early 2022 have now been fully enacted, providing clear and enforceable guidelines on casual conversion and ensuring that employers’ obligations are well defined as we move through 2025.
What Is The New Position?
The most recent decisions have made it clear that Mr Rossato was not entitled to paid annual leave, personal leave, or compassionate leave under the Fair Work Act. In summary, although the original decision suggested that casual employees whose roles closely mirror permanent positions could claim similar entitlements, the final ruling confirms that a casual employee will not automatically acquire the permanent benefits—regardless of the similarities in their duties.
This remains the current law on casual worker entitlements, so it is essential that you understand your obligations as an employer.
What Else Do I Need To Know?
The Court also held that when determining the nature of an employee’s engagement, you must consider the express terms of the employment contract, rather than merely basing decisions on everyday work practices. More specifically, the test centres on whether there was a firm advance commitment regarding the duration or the specific hours of work.
This approach is consistent with legislative reforms—now fully on track since the amendments enacted in 2022—which have further clarified the criteria distinguishing casual employment from permanent roles.
What Is The Right To Casual Conversion?
‘Casual conversion’ allows a casual employee to opt for a permanent employment status (whether full-time or part-time) if they have worked a regular pattern of hours on an ongoing basis for 12 months. Under section 66B(1) of the Fair Work Amendment Act 2022, an employer must offer permanent employment if:
- The employee has been employed for a period of 12 months, and
- During at least the last 6 months, the employee has worked a regular pattern of hours on an ongoing basis.
Are There Any Exceptions?
Yes.
In accordance with section 66C of the Act, if there are ‘reasonable grounds’ for not making an offer of permanent employment, then an offer is not required. ‘Reasonable grounds’ can include circumstances such as:
- The position is expected to cease within the next 12 months
- The employee’s hours are anticipated to reduce significantly during that period
- A significant change in the employee’s work days and hours is expected
- Compliance with law-mandated recruitment selection processes would be compromised
This means you, as an employer, are expected to carefully assess the likely working conditions over the coming 12 months to determine whether a permanent employment offer is appropriate. The recent legislative updates also ensure that any paid casual loading can be offset against future claims for permanent employment benefits, thereby avoiding any ‘double dipping’ scenarios.
The legislation has now been passed and is fully enforceable, providing clear guidance on casual conversion and ensuring consistency in employment entitlements.
Summary Of Proposed Reforms
- ‘Casual’ workers who maintain a regular pattern of hours on an ongoing basis for 12 months must be offered the choice to convert to permanent work (either part-time or full-time) by their employer.
- This right, known as the ‘casual conversion right’, means that if an employee elects to convert, they will gain access to leave entitlements and other benefits associated with permanent employment.
- Section 66C allows for exceptions, ensuring that both employer and employee interests are balanced.
- The updated legislation is now fully enforceable, thereby providing certainty for employers about their obligations.
- The overturned decision in Rossato confirms that casual workers will not automatically receive the same entitlements as permanent employees, regardless of the similarities in their roles.
What Now?
It is essential that you and your business remain current with the evolving laws surrounding casual workers and their entitlements.
Now is a good time to review your current casual employees’ working patterns to determine who may be eligible for the ‘casual conversion right’ under the new legislation.
If you have any questions, feel free to reach out to our team for a free, no-obligations chat at team@sprintlaw.com.au or call 1800 730 617.
It is also wise to periodically review your employment contracts and policies—as small updates today can save your business from larger disputes tomorrow. For more insights on drafting robust agreements, you might find our article on what a contract is particularly useful. Staying informed helps ensure your business not only complies with current legal requirements but is also prepared for future changes in the employment landscape.
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