Most businesses treat casual status as a box ticked once, at the start of employment.

Write "casual" into the contract, pay the loading, move on.

That assumption stopped being safe on 26 August 2024. The Fair Work Act now defines a casual employee by the real substance of the working relationship, not by what the contract says. Two years on, the case law testing exactly what that means in practice has only just started landing, and it's landing against employers who assumed the old rules still applied.

Here's what actually changed, what's being tested right now, and what it means if your business places or employs casual workers at scale.

The definition changed from "what the contract says" to "what actually happens"

Under the new test, a person is a casual employee only if, at the start of employment:

• the employment relationship has no firm advance commitment to ongoing work, assessed on the real substance and practical reality of the relationship, and
• they're entitled to a casual loading or specific casual pay rate under an award, agreement, or contract.

The Fair Work Ombudsman lists several factors relevant to "firm advance commitment," including whether the employer can offer or withhold work and the employee can accept or reject it, whether further work of that kind is reasonably likely, whether permanent staff perform the same work, and whether there's a regular pattern of work. No single factor decides it.

A worker with a predictable roster can still be genuinely casual; a worker with an irregular one can still have a firm advance commitment if the substance of the relationship shows it.  Once someone starts as a casual, they stay casual until one of three things happens:

1. they accept an alternative employment offer,
2. they convert under the National Employment Standards, award, or agreement,
3. or a Fair Work Commission order changes their status.

Casual conversion is gone. The employee choice pathway replaced it.

The old scheme, where employers had to proactively offer conversion after 12 months if certain conditions were met, is fully retired. It remained available only to casuals employed before 26 August 2024, and only in a transitional window that closed on 26 August 2025. Since then, every eligible casual sits under the new employee choice pathway:

• A casual employed for at least 6 months (12 months at a small business, under 15 employees) who believes they no longer meet the casual definition can give written notice to their employer.
• The employer must consult with the employee, then respond in writing within 21 days.
• The employer can only refuse on one of three grounds: the employee still meets the casual definition, fair and reasonable operational grounds, or accepting would breach a required recruitment or selection process.

If the notice is accepted, the change takes effect from the first day of the employee's next full pay period, unless both sides agree otherwise.  Unresolved disputes go to the Fair Work Commission, which can now arbitrate them, not just conciliate. That's a materially broader power than the old regime had.

The first ruling under the new rules just happened in August 2026, and it wasn't in the businesses' favour.

In Baker v Macquarie University [2026] FWC 3054, the Commission handed down what it described as the first arbitrated decision to test the employee choice provisions since they commenced. A casual academic who had taught the same subject across consecutive semesters since 2023 gave written notice in November 2025 that he believed he no longer met the casual definition. The university declined. The dispute went to arbitration, and the Commission found in the worker's favour, ordering he be treated as an ongoing part-time employee.

Two details from the decision matter more than the headline result.

First, the Commission's task was narrow: decide whether the worker actually meets the casual definition in section 15A of the Act. If they do, there's no conversion. If they don't, the employer generally can't keep treating them as casual regardless of preference.

Second, the Act requires the Commission to disregard anything that happened after the employee's notice when deciding the dispute. Status is locked in at the moment of notice, not reassessed against whatever the employer does next. An employer can't manage its way out of a notice once it's been given.

The Casual Employment Information Statement has a schedule most payroll systems don't track.

Separately from the definition change, employers must give every casual the Casual Employment Information Statement (CEIS), alongside the standard Fair Work Information Statement, at set points:

1. Before, or as soon as possible after, the casual starts.
2. Small business employers (under 15 employees): again at the 12-month mark.
3. All other employers: at 6 months, 12 months, and then every 12 months after that.

It isn't required more than once in any 12-month period, even with intermittent re-engagement. However, for a business running a large or rotating casual pool, that's a set of dates per worker that a standard onboarding checklist won't naturally catch, because the obligation continues well past onboarding.

Sham arrangements are still explicitly illegal.

The reforms kept and reinforced existing protections here. It's illegal for an employer to knowingly mislead a current or former permanent employee into a casual contract to do the same work, or to dismiss or threaten to dismiss someone in order to re-engage them as a casual doing the same work. Courts can and do impose penalties for it.

The parallel reform: same job, same pay for labour hire.

A related but separate 'Closing Loopholes' change affects labour hire specifically. Since the relevant provisions commenced in December 2023, with orders able to take effect from 1 November 2024, labour hire workers, their union, or the host business can apply to the Fair Work Commission for a regulated labour hire arrangement order. Where one applies, labour hire workers must be paid no less than the "protected rate of pay," the rate they'd receive under the host's enterprise agreement if directly employed. The Commission must make the order unless satisfied it isn't fair and reasonable, and there are exclusions for genuine service arrangements and small business hosts.  This has moved well past theory.

The Mining and Energy Union has secured orders at 30 mine sites covering around 5,000 workers. It isn't confined to mining, either. In a 2026 dispute, the United Workers' Union asked the Commission to determine what a "paid in accordance with this agreement" clause in Electrolux's enterprise agreement required for labour hire workers supplied by Trojan Recruitment Group at Electrolux's Beverley, South Australia site. The union's case was that between October 2022 and October 2025, those workers received only the base hourly rate under the agreement, without the casual loading the clause required. Electrolux directed Trojan to apply the correct rate, without admitting liability, and Deputy President Hampton found the dispute wasn't resolved simply because the rate had since been corrected. He confirmed that "paid in accordance with this agreement" means calculated and paid as if the agreement covered the labour hire workers directly, loading included.

That's not a story about a business trying to underpay anyone. It's a story about a pay clause interpreted one way for three years, corrected only after a union raised it, on a site with a host enterprise agreement in place the whole time.

What this means in practice.

Two questions sit inside these reforms that a manual process is poorly suited to answer:

• Has a casual quietly earned the right to request conversion? The 6- and 12-month clocks reset per employment relationship and depend on a regular pattern of work that can be easy to lose track of across a large or rotating casual pool, especially when the same worker moves between assignments.
• Is a placement into a host with an enterprise agreement still being quoted and paid on award rates when a protected rate of pay now applies? That's precisely the fact pattern in the Electrolux dispute; a correctly-drafted contract clause, interpreted incorrectly for years, on a site where the answer was always sitting in the host's own enterprise agreement.

Neither is primarily a rate-calculation problem. They're classification and mapping problems, which is a different kind of risk to the wage-increase compliance most businesses are already watching for.

RatesCalc keeps a locked, timestamped audit trail against every placement, so questions like these have a documented answer rather than a guess. If you manage a large casual or labour hire workforce and want a clear picture of where your current setup stands, book a 20-minute rate check today.

Sources

Fair Work Ombudsman, Casual employment changes: fairwork.gov.au/about-us/workplace-laws/legislation-changes/closing-loopholes/casual-employment-changes

Fair Work Ombudsman, Becoming a permanent employee: fairwork.gov.au/starting-employment/types-of-employees/casual-employees/becoming-a-permanent-employee

Fair Work Ombudsman, Casual Employment Information Statement: fairwork.gov.au/employment-conditions/information-statements/casual-employment-information-statement

Fair Work Commission, Periods of service as a casual employee: fwc.gov.au/periods-service-casual-employee

Fair Work Ombudsman, Labour hire changes: fairwork.gov.au/about-us/workplace-laws/legislation-changes/closing-loopholes/labour-hire-changes

Fair Work Ombudsman, Litigation (current civil penalty amounts): fairwork.gov.au/about-us/compliance-and-enforcement/litigation

Baker v Macquarie University [2026] FWC 3054 (12 August 2026), as reported in HCA Mag, Commission orders university to convert casual academic under new choice rules, and Fair Work Legal Advice, Conversion from casual to permanent employment

United Workers' Union v Electrolux Home Products Pty Ltd, decision of Deputy President Hampton, Fair Work Commission (27 May 2026), concerning Clause 13 of the Electrolux Home Products Pty Ltd National Logistics Support Centre Enterprise Agreement 2022, as reported in HCA Mag, Fair Work tells Electrolux to ensure labour hire workers get agreement pay

Note: the two 2026 Fair Work Commission matters above are cited from contemporaneous legal and HR trade press reporting