Sample Letter To Change An Employee From Part-Time To Casual In Australia

Changing an employee from part-time to casual can feel like a simple operational tweak - until you realise it touches on some of the most sensitive areas of employment law: minimum entitlements, clear consent, pay structures, and (often) employee expectations.

If you’re making this change because your roster needs are shifting, your business is seasonal, or you need more flexibility, you’re not alone. But in Australia, you generally can’t just “re-label” a part-time employee as casual. The safer approach is to treat it as a genuine change to the employment relationship - with proper consultation, documentation, and updated contracts.

General information only: this article provides general information and does not constitute legal advice. Because awards, contracts and the Fair Work Act can apply differently depending on your circumstances, consider getting advice before making changes.

Below, we walk you through how the change usually works, what to check before you proceed, and we include a practical sample letter you can adapt to change an employee from part-time to casual.

Can You Change A Part-Time Employee To Casual In Australia?

In many cases, a part-time employee can move to casual employment - but it’s not typically something you can do unilaterally.

A part-time employee has a continuing employment relationship with agreed hours (even if they can change by agreement) and they generally accrue paid leave entitlements (like annual leave and personal/carer’s leave) on a pro-rata basis.

A casual employee is generally engaged on an “as needed” basis (subject to minimum engagement rules in the relevant modern award or enterprise agreement) and generally doesn’t get paid leave. Instead, casual employees usually receive casual loading (often 25%) to compensate for the lack of certain entitlements.

Importantly, casual status is not just a label. Under the Fair Work Act, whether someone is a casual employee depends on the nature of the employment offer and acceptance (including that there is no firm advance commitment to continuing and indefinite work according to an agreed pattern of work), and the terms in the contract/offer matter.

Why Consent Matters

Moving from part-time to casual generally means the employee is giving up certain entitlements and agreeing to a different employment arrangement. For that reason, you should treat it as a mutually agreed change - usually documented in writing.

Even if the employee is open to the change, the process matters. A clear paper trail helps prevent confusion (and disputes) later.

Also Check: Awards, Enterprise Agreements, And Contracts

Before you offer a change, check the employee’s:

• Modern award coverage (if any), including classification, minimum engagement, casual conversion rules, notice requirements, and rostering provisions.
• Enterprise agreement (if applicable), which may contain additional or different rules.
• Employment contract, including any clauses about changes to hours, role requirements, and how variations must be agreed.

If you’re unsure what applies, it’s often worth getting advice early from an Employment Lawyer - especially if the change is tied to performance issues, restructuring, or significant reductions in hours.

When Does It Make Sense To Move From Part-Time To Casual?

Most small businesses consider a part-time to casual change when the “shape” of the work is genuinely becoming less predictable.

Common scenarios include:

• Seasonal or fluctuating demand (for example, retail peak periods, event-based work, or weather-related services).
• Roster volatility where you can no longer realistically guarantee ongoing hours each week.
• Availability changes where the employee can no longer commit to a stable part-time pattern, but still wants to work shifts occasionally.
• Operational restructure where the business is reducing fixed hours and using casual engagements for coverage.

That said, if the role is still basically “ongoing, regular and predictable”, casual engagement may not be the best fit - and may create compliance risk over time (including around casual conversion and disputes about true employment status).

Be Careful If The Change Is Really A Reduction In Hours

Sometimes, the underlying issue isn’t “we need a casual” - it’s “we need fewer hours.” If that’s the driver, you should consider whether you’re effectively:

• reducing agreed hours,
• changing the employee’s role, or
• making a role redundant.

Each of those scenarios can have different obligations, including consultation requirements and potential redundancy entitlements. If redundancy is on the table, the redundancy rules can be a key starting point.

Also note: if the change is implemented by ending the part-time employment and re-engaging the employee as a casual (rather than varying the existing arrangement by agreement), that can raise additional risks and obligations - including notice/final pay, redundancy considerations in some circumstances, and potential unfair dismissal exposure (depending on eligibility and the facts). Get advice on the safest structure for your situation.

Key Legal And Practical Checks Before You Send A Letter

Before you issue a letter (or even raise the idea formally), it helps to do a quick legal and operational check so you know exactly what you’re offering and what changes.

1. Confirm The Current Arrangement

Start with the basics. What is the employee’s current status and documentation?

• Are they definitely part-time (not casual with regular hours)?
• What hours are specified in the contract?
• What is their current pay rate (base rate, penalties, loadings, allowances)?
• What award or enterprise agreement applies?

If you don’t already have a written agreement, it’s a good time to put one in place. A properly drafted Employment Contract helps reduce ambiguity around status, hours, and entitlements.

2. Work Out The New Terms (And Put Them In Writing)

Your offer should clearly explain what changes and what stays the same, including:

• the effective date of the new arrangement
• the new employment type (casual)
• the applicable casual loading (and what it is intended to compensate for)
• how shifts will be offered and accepted
• any minimum shift length rules under the award
• notice requirements for cancellation or change of shifts (if you have a policy)

If you want to introduce (or tighten) shift cancellation rules, make sure your approach is consistent with your workplace obligations and any applicable award. It can help to align your internal processes with a clear shift cancellation policy.

3. Check Casual Conversion Rules

Casual employment in Australia often comes with conversion pathways (for example, conversion to permanent employment after a period of regular work, subject to conditions). These rules can apply under the Fair Work Act and/or modern awards.

Even if you’re moving someone to casual, it’s smart to understand the bigger compliance picture - especially if the work remains regular and predictable.

4. Make Sure The Change Isn’t Discriminatory Or Unfair

Be careful not to target an employee for a change in status for reasons that could be unlawful (for example, because they are pregnant, because they took sick leave, or because they raised a workplace complaint).

If you’re making broader roster changes or restructuring, keep records showing the genuine business reasons behind the proposed change.

Sample Letter To Change From Part-Time To Casual (Employer Template)

Below is a practical sample letter you can adapt to move an employee from part-time to casual. This is designed to be clear, friendly, and employer-focused - and to create a written record that the change is proposed and agreed (rather than imposed).

Important: you should tailor this to the employee’s award/enterprise agreement and your business circumstances. If you want the change to be legally robust, you should also issue a new casual employment contract (or a variation document) that matches the letter.

Template: Letter Proposing Change From Part-Time To Casual

[Your Business Letterhead]
[Date]

Private and Confidential

[Employee Name]
[Employee Address]

Dear [Employee Name],

Re: Proposed Change Of Employment Status – Part-Time To Casual

We are writing to discuss a proposed change to your employment arrangement with [Business Name].

As you know, you are currently employed on a part-time basis in the position of [Job Title]. Due to [brief reason – e.g. changes in operational requirements / fluctuating customer demand / changes to rostering needs], we are proposing to change your employment status from part-time to casual employment, effective from [Proposed Effective Date], subject to your agreement.

What This Change Means

• Employment Type: Your employment status would change to casual employment from the effective date.
• Hours Of Work: As a casual employee, your hours would be offered on an as-needed basis. There would be no guaranteed minimum hours each week, and shifts will be offered depending on business requirements and your availability.
• Pay Rate And Casual Loading: You will be paid at the applicable casual hourly rate, including casual loading, in accordance with [applicable Award / Enterprise Agreement]. The casual loading is paid in lieu of certain entitlements available to permanent employees (such as paid annual leave and paid personal/carer’s leave).
• Other Terms: All other terms and conditions of your employment will remain the same, unless varied in writing or required by law.

Consultation And Next Steps

We invite you to discuss this proposed change with us. If you agree to the change, we will provide you with a new casual employment agreement (or written variation) confirming the updated terms and conditions.

Please let us know your response by [Date – allow a reasonable time]. You are welcome to ask questions or request a meeting before providing your response.

Thank you, and we appreciate your ongoing contribution to [Business Name].

Kind regards,

[Name]
[Title]
[Business Name]
[Phone]
[Email]

Acknowledgement

I, [Employee Name], confirm that I have received and understood this letter and that I:

• ☐ Agree to change my employment status from part-time to casual effective [date]
• ☐ Do not agree at this time and would like to discuss further

Employee Signature: ______________________ Date: ______________________

After The Letter: What Documents And Payroll Changes Do You Need?

The letter is a great starting point - but it shouldn’t be the only step.

To properly implement the change, you’ll typically need to update both your legal documents and your internal systems.

Update (Or Replace) The Employment Contract

In most cases, you should issue a new casual contract (or a formal variation) that clearly sets out the new arrangement, including:

• casual status and the nature of the engagement
• pay rate and casual loading
• how shifts are offered/accepted and any rostering expectations
• termination rules (including any award-based requirements)
• confidentiality, IP, and workplace policies that apply

If you don’t already have a well-structured casual contract, it’s worth putting one in place. A tailored Employment Contract can help you clearly document the arrangement and reduce the risk of disputes later.

Check Your Workplace Policies (Especially Rostering And Conduct)

Status changes often expose policy gaps. This is a good time to confirm you have up-to-date workplace policies covering areas like:

• rosters and attendance expectations
• shift change and cancellation processes
• use of company property
• workplace behaviour and complaints handling

Many businesses roll these into a handbook-style suite. Where appropriate, a Staff Handbook helps keep expectations consistent, especially when you’re managing mixed employment types.

Payroll And Entitlements: Get The Settings Right

From a payroll perspective, make sure you:

• stop accruing permanent leave entitlements from the effective change date (if the employee becomes a true casual)
• apply the correct casual hourly rate and loading
• continue to pay applicable penalties, allowances, and overtime where required under the award/enterprise agreement
• keep proper records of hours worked and payslips

It’s also worth checking whether there are any outstanding leave balances and how they’re treated at the time of change. This can be a sensitive area, so clarity (and clean documentation) matters.

Do You Need Notice Or Payment In Lieu Of Notice?

Sometimes, a status change is rolled out alongside other changes (like ending the part-time arrangement and re-engaging casually). Depending on how you structure it, questions can arise about notice and final pay.

If notice is relevant in your situation, make sure you understand what counts as payment in lieu of notice, and how notice obligations interact with awards and the Fair Work Act.

Key Takeaways

• In Australia, moving a worker from part-time to casual will usually require the employee’s agreement and clear documentation - and you should avoid treating it as a simple “re-labelling” exercise.
• Casual status is determined by the nature of the employment offer/contract and the Fair Work Act definition, not just what the parties call the arrangement.
• A part-time to casual change affects entitlements (like paid leave) and pay structure (including casual loading), so your documentation needs to be clear and accurate.
• Before making the change, check the employee’s award/enterprise agreement and existing contract for rules about hours, rostering, consultation and conversion.
• A well-drafted letter proposing a change from part-time to casual should explain the reason for the change, the effective date, what changes, and how the employee can accept (in writing).
• If you’re ending the part-time employment and re-engaging casually (rather than varying by agreement), consider the added termination/redundancy/unfair dismissal risks and get advice early.
• After the letter, you should usually issue an updated casual employment contract and ensure your payroll settings and workplace policies align with the new arrangement.

If you’d like help changing an employee from part-time to casual (including updating contracts and documents), you can reach us at 1800 730 617 or team@sprintlaw.com.au for a free, no-obligations chat.