The casual rights case is the biggest case in the commission next to the penalty rates case and affects more than 2.53 million casuals, or 20.8 per cent of the workforce.

Casuals generally do not have guaranteed hours of work, can be terminated without notice and receive about a 20 per cent loading on their base rate in place of paid sick and annual leave and other conditions in the National Employment Standards (NES).

The full bench said that in the sense casuals lacked any guarantee of future hours, "employees accepting casual employment will usually not be doing so on a fully informed basis".

Further, "the permanent denial to the casual employee of the relevant NES entitlements at the election of the employer in those circumstances may, we consider, operate to deprive the NES element of the safety net of its relevance and thereby give rise to unfairness".

"If the casual employment turns out to be long-term in nature, and to be of sufficient regularity ... then we consider it to be fair and necessary for the employee to have access to a mechanism by which the casual employment may be converted to an appropriate form of permanent employment," the bench said.

Minimum two-hour work for casuals

The Australian Council of Trade Unions sought absolute rights for casuals to convert to permanent after six months of regular work in more than 100 industry awards and pushed to remove the employer's right to refuse such a conversion.


It also proposed minimum hours for casuals and part-time employees of at least four hours per day or shift.

The full bench rejected the case for absolute conversion rights and rejected minimum hours "across the board" due to its potential to reduce workforce participation and "inhibit" flexible work practices.

However, it reached a "provisional view" there should be a two-hour minimum engagement period for casuals in 34 modern awards "to avoid their exploitation in order to meet the modern awards objective".

'Most damaging' claims rejected

Australian Industry Group chief executive Innes Willox said the decision would "reduce flexibility" for some employers in some industries and "this is a concern given the tough operating environment that many businesses are experiencing".

But he welcomed the commission's rejection of the union's "most damaging" claims, including a "loopy idea" to prohibit hiring more casual or part-time employees until existing employees were offered more hours and minimum four-hour engagements.

"Similar to their conversion claims, the union's claims for a standard four hour minimum engagement period for casuals and part-time employees would have harmed the very people that the unions claim to be representing," he said.

"Many casuals cannot or do not want to work for four hours, e.g. school students who work in the fast food industry after school."


The employer group had previously warned that if the unions' claims for absolute conversion rights were accepted, thousands of casual jobs would be terminated.

Australian Retailers Association executive director Russell Zimmerman said "we fear this verdict will significantly impact retailers as casual's flexible hours are essential to the industry".

He said the ruling would only be "operationally viable" if there were less restrictions on offering additional hours to part-time workers without incurring overtime penalties.

Plugs 'one small hole'

ACTU secretary Sally McManus said unions had "won a first battle in the fight against the epidemic of casualisation" but that the decision "only plugs one small hole in a nationwide crisis".

"Working people with long term regular patterns of work that have been trapped in insecure, casual work contracts can now request permanent positions, but only after 12 months," she said.

"While the commission accepted the ACTU's argument around the impact casualisation has on people's lives, it is unable to address the bigger problem. We need political action to achieve that."

She noted permanent positions allow people to "plan for the future, to get loans, to budget, and to have a decent quality of living".

In contrast, casuals "earn less wages and lower superannuation and women are more often in casual employment than men, which contributes to the gender pay gap".

"Too many employers have been abusing the term casual, and use it as a business model to drive down wages."