Casual Employee: Definition & Leave Rights

A casual employee is a worker engaged on an as-needed basis with no firm advance commitment to ongoing work, and who is entitled to a casual loading instead of paid leave entitlements. Under Australia’s Fair Work Act 2009, casual employment is defined by the nature of the engagement — not by the number of hours worked or the label in a contract.

The casual employment framework was significantly reformed by the Closing Loopholes Act 2023, which introduced a clearer definition, a casual conversion pathway, and new rules for how casuals are reformed into permanent roles.

Key Takeaways

• A casual employee has no firm advance commitment to ongoing work and receives a casual loading (typically 25%) instead of paid leave.
• Casual employees do not accumulate annual leave, sick leave, or personal/carer’s leave under the National Employment Standards (NES).
• The National Employment Standards entitle casual employees to unpaid carer’s leave and unpaid family and domestic violence leave.
• Casual conversion to permanent employment applies after 12 months of regular and systematic work, unless a casual conversion exemption applies.
• The 2023 Closing Loopholes reforms introduced a new definition of casual employment and changed the conversion process.

What Is a Casual Employee?

Under the Fair Work Act, as amended by the Closing Loopholes Act 2023, a casual employee is someone who:

• Is offered employment on the basis that there is no firm advance commitment to continuing and indefinite work.
• Is paid a casual loading — an additional percentage on top of the base hourly rate — to compensate for the absence of paid leave and other entitlements.
• Has no guarantee of hours from one shift to the next (though in practice, many casuals work regular hours).

The key test is the “no firm advance commitment” criterion. This means the employer is not obligated to offer work, and the employee is not obligated to accept it. Both parties can decline shifts without breaching the employment relationship.

The Fair Work Commission (FWC) assesses casual status based on the real substance, practical reality, and true nature of the employment relationship — not just what the contract says.

Casual Employee Leave Rights

Casual employees do not accumulate paid leave under the National Employment Standards. However, they are entitled to:

Entitlement	Casual Employee	Permanent Employee
Annual leave	Not entitled	4 weeks per year
Personal/carer’s leave	Not entitled	10 days per year
Unpaid carer’s leave	2 days per year	2 days per year
Unpaid family & domestic violence leave	10 days per year	10 days per year
Compassionate leave	2 days per year	2 days per year
Long service leave	Depends on state/territory law	Yes
Public holidays	Entitled to day off or penalty rates if required to work	Entitled to day off

Casual employees also receive the 25% casual loading to compensate for the absence of paid entitlements. This loading is typically included in the hourly rate and is identified separately on pay slips.

Unpaid Leave for Casuals

Casual employees are entitled to unpaid leave from their first day of employment:

• Two unpaid carer’s days per year — to care for a sick or injured family member (Fair Work Act, s 101).
• Two unpaid compassionate leave days per year — for life-threatening illness or death of a family member.
• 10 unpaid family and domestic violence leave per year.

Casual Loading

Casual loading is the additional percentage paid to casual employees to offset the absence of paid leave, notice of termination, and redundancy pay. The standard loading is 25% on top of the base hourly rate, though some awards and enterprise agreements specify different rates.

The loading compensates for:

• No accumulated annual leave
• No accumulated personal/carer’s leave
• No notice of termination (beyond the minimum)
• No redundancy pay
• No guaranteed hours of work

If a casual employee’s award or agreement specifies a loading rate, you must pay at least that rate. Some awards also include a higher loading for weekend or public holiday work.

Casual Conversion to Permanent Employment

Since 2021, and strengthened by the 2023 Closing Loopholes reforms, casual employees who work regular and systematic hours can request conversion to permanent (part-time or full-time) employment.

Who Is Eligible?

A casual employee is eligible for conversion if they:

• Have been employed for 12 months or more.
• Have worked a pattern of hours that, without significant adjustment, could be performed by a permanent employee.
• The employer does not have a casual conversion exemption (such as a genuine operational reason documented in writing).

How Does Conversion Work?

1. After 12 months, the employer must offer conversion to permanent employment (unless an exemption applies).
2. The employee has 21 days to accept or decline the offer.
3. The employee can also make a request for conversion at any time after 12 months, and the employer must respond within 21 days.

Casual Conversion Exemptions

An employer is not required to offer conversion if the employee was hired for a specific short-term purpose, works for a small business (fewer than 15 employees), or there are genuine operational reasons preventing conversion.

Frequently Asked Questions

How many hours is a casual employee allowed to work?

There is no maximum number of hours a casual employee can work. However, the National Employment Standards provide that an employer must not request or require an employee to work more than 38 hours per week (for full-time employees) unless the additional hours are reasonable. For casuals, there is no fixed weekly limit, but modern awards may include provisions about maximum daily or weekly hours and rest breaks.

Do casual employees get paid public holidays?

Yes. Casual employees who work on a public holiday receive penalty rates as specified by their modern award or enterprise agreement. If a casual employee does not work on a public holiday, they are not paid for that day — unlike permanent employees who are paid for public holidays regardless of whether they work.

Can a casual employee be fired without notice?

Yes. Casual employment can be terminated by either party at any time without notice (unless the contract or award specifies a notice period). However, termination must not be for a prohibited reason such as discrimination, exercising a workplace right, or in breach of the general protections provisions of the Fair Work Act.

What is the difference between a casual and a fixed-term employee?

A casual employee has no firm advance commitment to ongoing work and receives a loading instead of leave. A fixed-term employee has a contract for a specified period (e.g., 12 months) and receives the same leave entitlements as a permanent employee. Fixed-term employees are not entitled to casual loading.

Do casual employees accumulate long service leave?

It depends on the state or territory. In Victoria, casual employees accrue long service leave after seven years of continuous employment. In other states, the rules vary — some exclude casuals, others include them after a qualifying period. Check your state or territory’s long service leave legislation for the applicable rules.