Guide
Casual, part-time or full-time?
This decision is usually made by default — "we'll start them casual and see how it goes" — and it is one of the few hiring decisions that carries real legal consequence if you get it wrong.
The question is not what you call the arrangement. Since August 2024 it is what the arrangement actually is in practice.
The short version
- A casual is someone with no firm advance commitment to ongoing work who gets casual loading. Both halves must be true.
- A regular roster does not by itself make someone permanent — but a guaranteed one does.
- Casual costs about 25% more per hour and buys you the ability to not offer shifts.
- Fixed-term contracts are capped at 2 years including extensions, and can only be renewed once.
- Decide before you advertise. The employment type belongs in the ad.
What legally makes someone a casual employee?
Since 26 August 2024, a casual is an employee who has no firm advance commitment to ongoing work — judged on the practical reality of the relationship, not just the contract — and who is entitled to casual loading.
Fair Work's test has two limbs and both must be satisfied. The first is the hard one, because it is assessed on "the real substance, practical reality and true nature of the employment relationship" rather than on what the contract says.
The factors that get weighed include whether you can genuinely choose not to offer work, whether they can genuinely refuse it, whether work of that kind is reasonably likely to keep being available, and whether permanent staff do the same work.
What does break it is a guarantee. Once you have promised the hours — in writing or by conduct both sides clearly rely on — you have a part-time employee who is being paid a casual loading, and the loading does not fix the problem.
What does each employment type actually cost?
Casual costs roughly 25% more per hour in exchange for flexibility; part-time and full-time cost less per hour but carry paid leave, notice and redundancy obligations.
| Type | Hours | Paid leave | Notice | Costs you |
|---|---|---|---|---|
| Casual | Offered shift by shift, refusable | No annual or sick leave | Generally none | ~25% loading on every hour |
| Part-time | Guaranteed, agreed in advance | Pro-rata annual and sick leave | Yes | Leave accrual, less roster flexibility |
| Full-time | About 38 hours a week | Full annual and sick leave | Yes | Leave accrual, redundancy exposure |
| Fixed-term | As per contract, max 2 years | Same as permanent | Ends at the set date | Strict limits on use and renewal |
The honest framing is that the loading is the price of optionality. If you will genuinely use that optionality — a café whose trade swings with the weather — it is good value. If you will roster the same person the same hours for two years, you are paying a 25% premium for flexibility you never exercise, and taking on a misclassification risk at the same time.
When can a casual employee become permanent?
Under the employee choice pathway, an eligible casual can notify their employer in writing that they want to change to permanent employment, and the employer must respond and can only refuse on specified grounds.
The initiative sits with the employee, and small businesses have different timing from larger ones. You cannot contract out of it, and refusing without one of the permitted reasons is where disputes start.
You must also give every new casual a Casual Employment Information Statement. It is a short document published by Fair Work; failing to hand it over is a straightforward compliance miss with no upside.
What are the rules on fixed-term contracts in Australia?
For contracts made on or after 6 December 2023, a fixed-term contract cannot run longer than two years including extensions, cannot be renewed more than once, and requires a Fixed Term Contract Information Statement.
These limits catch employers who use rolling twelve-month contracts to avoid making a role permanent. Fair Work's own example is a six-month contract with two possible four-month extensions: it breaches the rules even though the total is under two years, because there is more than one renewal option.
- Maximum 2 years, including every extension and renewal.
- At most one option to extend or renew.
- Consecutive contracts for substantially the same work are also restricted.
- Exceptions exist — genuine project work, specialised skills, government-funded positions and others.
A contract that breaches the limits does not void the employment. The end date simply stops operating, and you have a permanent employee — which is usually the opposite of what was intended.
Which employment type should you advertise?
Advertise the type you can actually honour: casual only if the hours are genuinely variable and refusable, part-time if you can guarantee a pattern, full-time if the work is there.
- 1
Is the work ongoing and predictable?
If yes, it is part-time or full-time. Dressing it as casual to stay flexible is the misclassification risk.
- 2
Can you genuinely not offer shifts some weeks?
If no — if they would be entitled to feel aggrieved at getting no roster — it is not casual.
- 3
Is there a real end point?
A funded project or a parental leave cover is fixed-term. "We'll see how trade goes" is not.
- 4
Put it in the ad
Candidates filter hard on this. An ad that hides the employment type attracts people who will withdraw once they learn it.
One pattern worth naming: offering permanent part-time where competitors offer casual is a genuine draw in retail, care and hospitality, because it is what makes a rental application work. It costs you the loading and buys you retention.
Common questions
Can a casual employee work regular hours every week?
Yes. Fair Work states that a regular pattern of work on its own does not mean an employee has a firm advance commitment to ongoing work. The question is whether the shifts are genuinely offered and can genuinely be refused, not whether they repeat.
Is casual or part-time cheaper in Australia?
Casual costs roughly 25% more per hour because of the loading, but carries no paid annual leave, paid sick leave, notice or redundancy. Part-time is cheaper per hour and more expensive in entitlements, so which is cheaper depends on how variable the hours genuinely are.
How long can a fixed-term contract be in Australia?
For contracts entered into on or after 6 December 2023, a fixed-term contract cannot exceed two years including any extensions or renewals, and cannot contain an option to renew more than once. Exceptions apply to some roles.
Do I have to give a Casual Employment Information Statement?
Yes. Employers must give every new casual employee the Casual Employment Information Statement published by the Fair Work Ombudsman.
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