On 26 February 2025, a transformative change will take effect in Australia’s workplace laws that will benefit casual employees across the country. The new Employee Choice Pathway under the National Employment Standards offers casual workers an opportunity to transition to permanent employment if they choose, offering greater job security, clarity, and fairness. This change, which is part of broader reforms to casual employment rights, marks a significant shift in how casual workers are treated under Australian law.

What is the Employee Choice Pathway?

The Employee Choice Pathway allows casual employees in Australia to request a conversion to permanent full-time or part-time employment after working for the same employer for at least 6 months (or 12 months if employed by a small business). This new right, set to take effect from 26 February 2025, is aimed at providing casual workers with the option to seek more job security, paid leave, and the benefits typically associated with permanent positions.

Important considerations

On 26 August 2024, the pathway to permanent employment for casual employees changed from ‘casual conversion’ to ‘employee choice’.

Any period of employment prior to 26 August 2024 will not be counted in assessing a casual employee’s eligibility for the Employee Choice Pathway.

Eligible employees employed immediately prior to 26 August 2024 may issue a notice under the Employee Choice Pathway from:

• 26 February 2025 if not employed by a small business (i.e. 6 months from 26 August 2024); or
• 26 August 2025 if employed by a small business (i.e. 12 months from 26 August 2024)

Casual conversion (the previous pathway) is still available for some casual employees for a transitional period until 26 August 2025. For more information about casual conversion and the transitional period see the Fair Work Ombudsman’s website.

Who can’t provide notice

Casual employees will not be able to utilise the Employee Choice Pathway if they:

• are currently engaged in a dispute with their employer about conversion to permanent employment; OR
• in the last 6 months, their employer refused a previous notice or resolved a dispute about the employee choice through a dispute resolution process; OR
• were employed before 26 August 2024 and in the last 6 months they:
  • refused an offer to convert to permanent employment; OR
  • they received notice from their employer that no offer would be made for casual conversion; OR
  • their employer previously refused a request for casual conversion.

Employer’s obligations

Upon receiving a notice from a casual employee pursuant to the Employee Choice Pathway, the employer must consult with the employee. The discussion must consider details of what will change if the employer accepts the notice – including the reclassification of the employee as permanent (including full-time or part-time), their hours of work and when the change will take effect.

Employers are required to respond to a notice within 21 days, by either accepting or rejecting the change.

Accepting a change

If the Employer accepts the change, they must respond in writing with information setting out the employee’s new employment status (full-time or part-time), their new hours of work and when the change will take effect.

Any change must take effect from the first day of the first full pay period commencing after the employer provided their response (unless agreed to otherwise in writing).

Rejecting a change

Employers may only reject a change by providing a response in writing inclusive of reasons for the decision. The Fair Work Ombudsman has provided the following guidance as reasons for rejecting a change:

• the employee still meets the definition of a casual employee
• 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 an award or agreement) that apply to the employee.
• accepting the change would mean the employer won’t comply with a recruitment or selection process required by law.

Pitfalls

As tempting as it may be, employers must not take certain actions (in respect of current employees) to avoid their obligations or an employee’s rights under the Employee Choice Pathway – for example, reducing or changing an employee’s hours to disturb their pattern of work, or terminating their employment.

The Employee Choice Pathway is a workplace right and casual employees may be protected under the General Protections provisions of the Fair Work Act 2009 (Cth).

Conclusion

The Employee Choice Pathway is an exciting change for casual employees in Australia, offering greater choice, transparency, and security in the workplace. Whether you’re a casual worker who has been with the same employer for 12 months or more, or an employer navigating the new system, understanding this pathway is essential to ensuring a smooth transition.

If you are uncertain about your rights or obligations as an employer or employee, please do not hesitate to contact our team for tailored advice.