Both the National Employment Standards and the Closing Loopholes laws are currently under scrutiny, prompting renewed debate about the future of casual employment. Here’s what HR needs to know.
Casual employment in Australia is once again under the microscope.
Two major reviews are currently underway that could reshape how casual work is defined and regulated: the Federal Government’s review of the National Employment Standards (NES), and a post-implementation review of the Closing Loopholes reforms.
Together, they have sparked widespread debate about the adequacy of current protections for casual workers. Unions and industry groups are lobbying for changes such as expanded leave entitlements, notice of termination and further refinements of what it means to be a ‘casual’ employee in the first place.
While the reviews are operating independently, they are effectively interrogating different parts of the same system, according to Lisa Mannering FCPHR, employment lawyer, HR consultant at Langtree Legal and member of AHRI’s ER/IR advisory panel.
“Both reviews are looking at the efficacy of their respective legislation,” she says. “The Closing Loopholes review is looking at the definition and criteria for what a casual is, whereas the NES review is about whether those casuals should have additional entitlements that they don’t already have.”
Below, Mannering sheds light on how both reviews are reassessing casual employment, and how employers can prepare their organisations for potential changes on the horizon.
What’s up for debate in the Closing Loopholes review?
Casual work has already been subject to sweeping reforms over the past few years, many of which came as a result of the Closing Loopholes No. 2 Act 2024.
This Act made several changes to how casual employment is defined and treated, including:
- A new definition of ‘casual employee’, which states that a worker is only casual if they have “no firm advance commitment” to ongoing work. This is now assessed through the real substance and practical reality of the relationship rather than just the contract.
- A new requirement to provide casuals with a Casual Employment Information Statement.
- A new ‘Employee Choice Pathway’ which allows casual employees to initiate a change to permanent employment if they believe they no longer meet the definition of a casual.
Employees must have worked for the business for at least six months (or 12 months for small businesses) to do this.
The changes were designed to address long-standing concerns about job security and classification disputes – and AHRI’s research shows they are already having a tangible impact.
In AHRI’s June 2025 Quarterly Work Outlook report, 68 per cent of employers said they were more likely to hire casual workers since the new laws were introduced.
More than two thirds (69 per cent) of employers said the rules were viewed positively by casual employees, while 21 per cent said the response was neutral. Just six per cent said it was viewed negatively.
In its submission to the Closing Loopholes review, the Australian Council of Trade Unions (ACTU) highlights the success of the new laws in helping more workers land secure permanent jobs, pointing out that casual employment has dropped from 23 per cent in 2016 to 19 per cent today.
However, some industry submissions highlight problems arising from the amendments and suggest rolling back some or all of the changes.
The Business Council of Australia (BCA)’s submission points out that the new casual definition sometimes creates “accidental permanency” and administrative conflict.
Australian Industry Group (AI Group)’s submission describes the new definition of casual employment as a “compliance time bomb”, and argues that enabling a choice/conversion pathway after only six months is “unduly premature” and does not account for seasonal needs or temporary surges in demand.
“It is a short time, particularly for large businesses, to make an assessment of whether there is enough to actually convert someone to a full-time or part-time role,” says Mannering.
“And, if we’re looking at decreasing the number of casuals in the workforce, there are potentially broader issues, because scalability or project work is going to be a lot harder.”
The Closing Loopholes review is nearing its conclusion, with a final report due to be delivered to the Minister for Employment and Workplace Relations on or before 15 June 2026.
How the National Employment Standards review could impact casual work
The Federal Government’s current review of the operation and adequacy of the National Employment Standards (NES) has prompted a reassessment of the basic protections afforded to casual employees.
Various submissions from unions and industry groups have called for changes to the NES’s treatment of casual workers, including:
1. Paid leave entitlements
Some unions and advocacy groups are calling for paid leave entitlements to be extended to casual employees.
Both the ACTU and the Employment Rights Legal Service recommend that casual employees gain access to compassionate and personal/carer’s leave in proportion to their service.
The Centre for Future Work also supports access to carer’s leave for casuals. It argues that carers are often in casual work because of their need for part-time work hours and/or flexibility, making them “the very employees most in need of this leave”.
Increasing leave entitlements for casual employees could increase workforce participation and reduce reliance on casual loading, says Mannering.
However, she says the deeper issue is that the legal definition of a casual worker remains inconsistent across the industrial relations system. An employee may be classified as casual in one context, but treated differently in another, making it difficult to determine who should qualify for entitlements and on what basis.
Introducing additional leave entitlements could blur these lines further, she says, given that access to paid annual or personal leave seems to go against the definition of casual employment as having no “firm advance commitment” to work.
Mannering says the current review presents an opportunity to consider a new category of employment – a clearly defined “flexible permanent” model that offers greater flexibility than part-time roles, without the unpredictability associated with casual work.
“If someone has the guarantee of ongoing work, but has the ability to upscale or decrease their work hours or their days without having all the strict requirements of part-time employment, that would give both parties more certainty on the arrangement.”
2. Notice of termination
Several submissions have argued that casual employees should be entitled to a notice period when their employment is terminated, in line with their permanent counterparts.
The Australian Services Union’s submission argues that the archetype of casual employment as intermittent and short-term is outdated, citing data showing that only around 36 per cent of casual workers had been with their employer for less than 12 months. The ACTU’s submission also supports this proposal.
“If we’re looking at decreasing the number of casuals in the workforce, there are potentially broader issues, because scalability or project work is going to be a lot harder.” – Lisa Mannering FCPHR, employment lawyer, HR consultant at Langtree Legal and member of AHRI’s ER/IR advisory panel
While this change would improve stability and predictability for casual employees, Mannering notes that it could also introduce practical challenges on both sides of the employment relationship.
“Often it’s the case that employees aren’t getting enough hours or they’re unhappy in their employment, and they just want to leave one employer and start with another,” she says.
“If we’re imposing a notice period, that would impact casual employees being able to secure other work, because that next employer might not want to wait a week for that person to start.”
3. Increase to casual loading (in line with increased annual leave)
A number of unions have proposed increases to casual loading, often alongside broader calls to lift annual leave entitlements for permanent employees.
A submission from the Shop, Distributive and Allied Employees’ Association suggests that if casuals remain excluded from the standard paid leave system, the casual loading must be increased to compensate for the widening gap between permanent and casual standards, particularly if other reforms (such as the push for a fifth week of annual leave) are enacted for permanent employees.
Meanwhile, industry bodies including the Australian Chamber of Commerce and Industry have argued that existing annual leave entitlements for permanent employees and equivalent casual loading rates are appropriate and sufficiently generous when compared internationally.
While the submissions period for the NES review has now ended, the enquiry is still in the active evidence-gathering phase, which includes public hearings, analysis of submissions and the publishing of a final report with recommendations. There is not yet a fixed release date for the final report.
Read a summary of changes under consideration in the National Employment Standards review here.
Preparing your business for the next iteration of casual work
While the reviews are still underway, HR’s priority should be to stay attuned to what might change and why, says Mannering.
“It’s not just regulatory change – changes to rights and entitlements can flow through into other claims, like general protections claims and enterprise agreements,” she says.
“While we don’t have certainty at the moment about what’s changing, it’s really important that HR stop and take a moment to be aware of what’s on the radar.”
For example, employers might want to consider:
- The financial impact of new entitlements for casuals, particularly around paid leave
- What opportunities there are to convert existing casual employees into permanent roles
- The structural and cultural impact of converting more casuals into permanent roles
- Whether frontline managers are equipped to answer questions from casual employees about the changes.
In some cases, it might be advisable to conduct a comprehensive workforce audit.
“Look at your contract terms, look at policies, look at the data,” she says. “What’s the risk to the organisation? Would there be many conversions? What additional entitlements might be impacted? And do we need to look at whether an enterprise agreement is now falling below the minimum standard?”
Interrogating policies like this will ensure that small shifts in entitlements or definitions don’t translate into broader operational and legal risk.
While these reviews may reshape the boundaries of casual employment, Mannering expects casual work to remain a core feature of the labour market.
“There are some industries, [such as] hospitality, retail and disability services, that just need the ability to upscale the workforce quickly. So we’re always going to see a casual component,” she says. “But, in saying that, a lot of employers in those industries and more broadly don’t actually look at how work could be redesigned to have permanent staff.
“That was a fundamental part of the Closing Loopholes changes – to get people into more secure work. But there’s a real opportunity for employers to consider how they use casuals and whether the jump from casual arrangements to part-time work is actually not too far.”
All information, content and materials available on this site are for general informational purposes only. The contents of this article do not constitute legal advice and should not be relied upon as such.
The labour market is changing. Are your workforce plans keeping up? Join AHRI’s webinar on What’s Shaping Australia’s Workforce on 7 May. AHRI will cut through the data to reveal what’s really happening in Australia’s labour market and how it impacts HR decision-making today.
