If you employ casual staff in a small business, a request to become permanent can land on your desk at any time. Since 26 August 2025, casuals at small businesses (fewer than 15 employees) have been able to use the "employee choice pathway", and the clock on your reply is short.

How the pathway works

A casual who has worked for you for at least 12 months can give you written notice that they believe they no longer meet the definition of a casual employee and want to become full time or part time. It is the employee's choice to start the process, so you do not have to wait for an offer round to come up.

Once you receive the notice, the Fair Work Ombudsman says you must:

  • Consult the employee before you respond.
  • Reply in writing within 21 days, either accepting or not accepting the change.

You can only say no for limited reasons. These include that the employee still meets the definition of a casual, or that there are fair and reasonable operational grounds, such as needing to substantially change how work is organised. If you accept, the change starts from the first day of the employee's first full pay period after your response, unless you agree on something else.

What to do now

  • Know who is close. List every casual who has passed, or will soon pass, 12 months with you.
  • Look at the real pattern of work. A casual with regular, predictable hours and an ongoing arrangement is the person most likely to have a valid request.
  • Set a 21 day diary reminder the moment any written notice arrives, and keep a copy of the notice and your reply.
  • Use the free templates. The Fair Work Ombudsman publishes a checklist and template letter for responding to a request, which helps you keep the reply in writing and on time.
  • Cost the options. Permanent staff get paid leave and notice rights instead of a casual loading, so work out what a move would mean for your roster and budget before you consult.
  • Check your awards and contracts. If a person's hours are really regular, it may be cleaner to offer a permanent role yourself.

The bottom line

Most of the risk here comes from missing the 21 day deadline or refusing without a proper reason. A quick review of your longer serving casuals, and a plan for how you will respond, takes an hour and can avoid a dispute later. If you are unsure whether a person still counts as a casual, check with the Fair Work Ombudsman or your adviser before you reply.