Employee Choice Pathway: What Happens When a Casual Employee Asks to Go Permanent

What the Employee Choice Pathway Is

The employee choice pathway is set out in the Fair Work Act and gives an eligible casual employee the right to notify their employer in writing that they believe they no longer meet the legal definition of a casual employee, and that they want to change to full-time or part-time employment. The notice has to state that the employee believes they no longer meet the definition, and it's the employee who starts the process, not the employer offering conversion on a set schedule the way the rules used to work.

How It Replaced the Old Casual Conversion Rules

Before these reforms, the Fair Work Act put the obligation on the employer: after 12 months of regular casual work, the employer generally had to assess whether an employee met the criteria for casual conversion and make an offer if they did. The Fair Work Legislation Amendment (Closing Loopholes) Act flipped that model. The definition of casual employee itself changed to focus on the real substance and practical reality of the working relationship rather than just the terms of the contract, and the right to initiate a change of employment status now sits with the employee through the employee choice notice, not with the employer making a scheduled offer.

When It Started for Your Business

The broader definition change and the Casual Employment Information Statement obligations commenced earlier, from 26 August 2024, but the employee-initiated notice process itself followed on the dates above. For small NDIS providers, medical practices and allied health clinics under the 15-employee threshold, that means the pathway has only been operating for just over a year, which is often long enough for a first eligible employee to have already reached the qualifying period.

Who Can Give an Employee Choice Notice

A casual employee can give an employee choice notice once they've been employed for at least 6 months, or at least 12 months if they work for a small business employer, and they believe they no longer meet the legal definition of a casual employee. That belief has to be reasonably held, based on things like a regular, predictable pattern of hours that has continued for some time, rather than genuinely irregular or on-call work. An employee can't give a new notice within 6 months of a previous notice that was refused or withdrawn, so the process has a natural cooling-off period built in.

What Employers Must Do Within 21 Days

Once a valid employee choice notice is received, the employer has 21 days to respond in writing. Before responding, the employer must consult with the employee about the proposed change, including what it would mean for their hours, pay and roster pattern going forward. The written response then needs to either accept the change and set out the new employment type, hours and start date, or refuse it on one of the limited grounds the Fair Work Act allows, with reasons given in writing.

Valid Grounds for Refusal

An employer can only refuse an employee choice notice on specific grounds: the employee still meets the legal definition of a casual employee, accepting the change would require substantial changes to how the business operates, or it would breach a recruitment or selection process required by law, such as certain public sector merit-based hiring rules. A refusal outside these grounds, or one that misses the 21-day deadline, is not valid. Where an employer and employee can't reach agreement, either party can take the dispute to the Fair Work Commission, which can conciliate and, in some circumstances, arbitrate depending on whether both parties agree or the relevant award provides for it.

What Changes in Payroll If a Notice Is Accepted

Accepting an employee choice notice isn't just a change to a personnel file, it changes several live settings in payroll from the effective date. The casual loading, generally 25% under most awards including the SCHADS Award, stops applying and the employee moves onto the applicable full-time or part-time base rate for their classification. Annual leave and personal leave under the National Employment Standards start accruing from the conversion date, since casual employees don't accrue paid leave. Notice of termination and redundancy pay entitlements also begin accruing from that point. None of this is retrospective, the change applies from the agreed effective date forward, but payroll needs the employment type, leave accrual rules, ordinary hours pattern and pay rate all updated together, not just the headline pay rate, or the leave balance will be wrong from the first pay run after conversion.

The Casual Employment Information Statement

Separate from the employee choice notice process, employers have an ongoing obligation to give casual employees the Casual Employment Information Statement, a Fair Work Ombudsman document explaining these rights. It must be provided when a casual employee starts, and again later: non-small business employers provide it again after 6 months and after 12 months of employment, while small business employers provide it again once, after 12 months. Missing this obligation doesn't affect an employee's right to use the employee choice pathway, but it is a separate compliance requirement worth checking against your onboarding and anniversary payroll processes.

What This Means for NDIS, Medical and Allied Health Employers

NDIS providers running large SCHADS Award casual workforces are the most likely to see employee choice notices land, particularly from support workers who've settled into a regular weekly roster that looks a lot less casual in practice than it does on paper. Medical practices with reception, nursing or practice management staff on long-running casual arrangements face the same exposure, often without having tracked how long any individual casual employee has actually been working a consistent pattern. Allied health clinics mixing casual clinicians with permanent administrative staff should check both groups, since the practical reality test applies the same way regardless of job title or clinical qualification. In all three sectors, the safest position is knowing which casual employees are approaching, or have already passed, the eligibility threshold before a notice arrives, rather than working it out under a 21-day deadline.