[et_pb_section fb_built=”1″ _builder_version=”4.16″ da_disable_devices=”off|off|off” global_colors_info=”{}” da_is_popup=”off” da_exit_intent=”off” da_has_close=”on” da_alt_close=”off” da_dark_close=”off” da_not_modal=”on” da_is_singular=”off” da_with_loader=”off” da_has_shadow=”on”][et_pb_row column_structure=”1_3,2_3″ _builder_version=”4.23″ background_size=”initial” background_position=”top_left” background_repeat=”repeat” width=”100%” custom_padding=”||0px||false|false” locked=”off” global_colors_info=”{}”][et_pb_column type=”1_3″ module_class=”table-contents” _builder_version=”4.23″ background_color=”#f3f2f6″ custom_padding=”25px||25px||true|false” sticky_position=”top” sticky_limit_bottom=”section” sticky_position_tablet=”top” sticky_position_phone=”none” sticky_position_last_edited=”on|desktop” pac_dcm_carousel_specific_module_num=”0″ border_radii=”on|24px|24px|24px|24px” global_colors_info=”{}” custom_padding__hover=”|||”][et_pb_text _builder_version=”4.23″ text_font=”||||||||” global_colors_info=”{}” background__hover_enabled=”on|desktop”][\/et_pb_text][\/et_pb_column][et_pb_column type=”2_3″ _builder_version=”4.16″ custom_padding=”|||” pac_dcm_carousel_specific_module_num=”0″ global_colors_info=”{}” custom_padding__hover=”|||”][et_pb_text admin_label=”Intro” _builder_version=”4.27.4″ header_2_font_size=”32px” header_2_font_size_tablet=”30px” header_2_font_size_phone=”26px” header_2_font_size_last_edited=”on|tablet” global_colors_info=”{}”]<\/p>\n
The employee choice pathway<\/a> comes into effect from 26 August 2025 for small businesses. Since 26 February, larger Australian companies have had to follow the new workplace policy, which provides casual employees with a path to permanency at their workplace via the \u2018Closing Loopholes\u2019 law. With the requirement looming for small businesses, let\u2019s examine the change and its impact on you.<\/p>\n According to the Fair Work Ombudsman<\/a>, under the employee choice pathway, casual employees can approach their employer and request permanent working arrangements, such as part-time or full-time employment. For small businesses that have 14 or fewer employees, casuals must meet specific requirements to be eligible:<\/p>\n As a small business employer, the process of transitioning your employees from casual to permanent is no longer just driven by your needs. The employee choice pathway gives workers the power to pursue permanent employment on their terms (if eligible).<\/p>\n If a casual meets the criteria in a business, they can exercise their right and pursue permanent employment. Employers are required to respond with either an acceptance and a new contract for the employee or a refusal, accompanied by a justification for the refusal. If refusal is given without a justified reason, the employee can take the matter to the Fair Work Commission.<\/p>\n There are several components of the employee choice pathway which employers need to be aware of.<\/p>\n Employers need to understand what constitutes casual employment, as the designation impacts whether an employee can transition to permanent employment. A casual worker is defined as:<\/p>\n This is where the casual employee signals their intention to pursue permanent employment. For an employee to submit this notice, they must have been employed by the small business continuously for 12 months or more and no longer meet the definition of a casual worker.<\/p>\n Once an employer receives this notice, they have 21 days<\/strong> to respond. During that time, the employer can discuss permanent employment with the employee. Once a decision has been made, the employer needs to either accept or reject the notice.<\/p>\n If the notice is accepted, the employer transitions the casual worker to a permanent position via a new contract\/employment agreement. If the notice is rejected, the employer needs to provide a justified reason, such as:<\/p>\n If the notice is accepted, the path forward is relatively simple; the employer just follows their procedures. But rejection can be complicated. If the employee believes the reason is unjustified, they can take their employer to the Fair Work Commission. It is also important to note that no adverse consequences can be taken against a casual looking to transition.<\/p>\n To understand how the employee choice pathway works, let\u2019s look at an example.<\/p>\n [\/et_pb_text][et_pb_text admin_label=”Scenario” _builder_version=”4.27.4″ _module_preset=”default” text_text_color=”#0a004a” background_color=”#eeecff” custom_padding=”30px|30px|30px|30px|false|false” border_radii=”on|20px|20px|20px|20px” box_shadow_style=”preset2″ locked=”off” global_colors_info=”{}”]<\/p>\n Clair is a casual assistant at a small retail store. She is one of seven employees and has been working there for 15 months. She has set days on which she works: Mondays, Tuesdays, and Thursdays. Clair receives her rostered shifts a few weeks in advance. Clair believes that these circumstances confirm her eligibility for permanent employment by:<\/p>\n In the instance of a notice, the employer needs to confirm that the criteria Clair outlines are accurate and that there are no mitigating factors that could justify refusal. Clair\u2019s employer acknowledges that Clair’s responsibilities and employment have been consistent, and agrees to transition her to a permanent part-time role.<\/p>\n [\/et_pb_text][et_pb_text _builder_version=”4.27.4″ _module_preset=”default” global_colors_info=”{}”]<\/p>\n This scenario highlights a relatively straightforward transition for an employee; however, casual workers are often not privy to how a business operates. If there is justification for refusing a transition, it must be communicated clearly. Say if Clair\u2019s employer rejects the notice because the role is being wound down. Clair can\u2019t be faulted for not knowing this information, but it also stands to reason that if that were the case, Clair would need to have had this communicated to her.<\/p>\n What employers can\u2019t do is fire a casual worker by citing a phase-out of the role, only to rehire someone else for a similar casual role; this would result in a legitimate case of wrongful dismissal and circumventing the employee choice pathway.<\/p>\n Small businesses can prepare for the new change by having a discussion with their casual staff about the changes. If everyone is on the same page, then the likelihood of miscommunication and misunderstanding is low. Additionally, small businesses must be prepared to transition staff if they meet the requirements. This can be a good opportunity to review your payroll systems<\/a> and identify which workers would be good candidates<\/a> to transition.<\/p>\n [\/et_pb_text][ba_social_share icon_bg=”#03002e” icon_padding=”10px|12px|10px|12px|true|true” layout=”classic” show_text=”off” btn_padding=”0px|0px|0px|0px|false|false” btn_bg_color=”RGBA(255,255,255,0)” _builder_version=”4.23″ _module_preset=”default” custom_margin=”50px||||false|false” custom_padding=”25px||||false|false” custom_css_before=” content: %22SHARE THIS%22;|| font-size: 16px;|| font-weight: 700;|| line-height: 22px;|| letter-spacing: 0em;|| text-align: center;|| color: #ff5447;|| margin-bottom: 10px;|| display: inline-flex;|| position: absolute;|| margin-top: 10px;” border_width_top_main=”1px” border_color_top_main=”#e4e4e4″ border_radii_icon=”on|5px|5px|5px|5px” global_colors_info=”{}” custom_css_before_last_edited=”off|desktop”][ba_social_share_child _builder_version=”4.23″ _module_preset=”default” global_colors_info=”{}”][\/ba_social_share_child][ba_social_share_child network_type=”facebook” _builder_version=”4.23″ _module_preset=”default” global_colors_info=”{}”][\/ba_social_share_child][ba_social_share_child network_type=”linkedin” _builder_version=”4.23″ _module_preset=”default” global_colors_info=”{}”][\/ba_social_share_child][ba_social_share_child network_type=”email” _builder_version=”4.23″ _module_preset=”default” global_colors_info=”{}”][\/ba_social_share_child][\/ba_social_share][\/et_pb_column][\/et_pb_row][\/et_pb_section]<\/p>\n","protected":false},"excerpt":{"rendered":" The Employee Choice pathway will take effect for small businesses on 26th August 2025. Learn what it means and how to plan for it.<\/p>\n","protected":false},"author":36,"featured_media":295940,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_et_pb_use_builder":"on","_et_pb_old_content":" Changes to how casual employees can transition to permanent employment are coming this year. The new process adds an employee-driven element, where, depending on certain circumstances, a casual employee can notify their employer of their intention to move from casual to permanent employment.<\/p> This is a marked departure from the previous rules, which were entirely up to the employers. So, what does this new process look like, and what does it mean for small businesses?<\/p> Let\u2019s go through it.<\/p> The \u201cClosing Loopholes\u201d amendment has directly changed how casual employees remain casual or transition to permanent employment.<\/p> Under the old rules in the National Employment Standard, a casual employee\u2019s employment status was entirely employer-driven. This meant that any conversation or initiation of a casual employee was through the employer's agreement or arrangement.<\/p> Now, employees can let their employer know their desire to change their working status, called the employee choice pathway.<\/p> Under the employee choice pathway, casual employees can pursue permanent employment by notifying their employers of their intent to change from casual to permanent. The following criteria have to be met before notice can be given:<\/p> The changes have been in effect for medium-large businesses since 26 February 2025. Under the legislation, businesses with 15 or more employees must follow the employee choice pathway procedure.<\/p> The changes will come into effect on 26 August 2025 for small businesses (15 employees or fewer). Under the rules of casual employment, an employee may only notify their intent for permanent employment if they have been employed for more than 12 months.<\/p> The employee choice pathway is twofold: a notice of intent to transition from casual to permanent, and the response to that notice. While this may seem simple, a number of factors determine the outcome. First, before a notice can be made to move from casual to permanent, we must look at what defines casual employment status.<\/p> The legal definition of what constitutes casual employment can be found in the Fairwork Act 2009 (15A). This is a rather large document, so for all intents and purposes, casual employment can be simply defined like this:<\/p> If you are unsure about the definition of casual employment<\/a>, the Fairwork Ombudsman has materials and resources.<\/p> The notice a casual employee gives to their employer about moving to permanent employment requires two factors to be satisfied:<\/p> Here is an example of a notice to demonstrate what this would look like in the workplace.<\/p> Imagine a bartender working casually for over 10 months at a large pub with more than 15 workers. This casual employee has been given more responsibilities in the last few months, including rostering other casuals. The employee has also noticed they work fixed, regular, rostered shifts. With this information and a desire for more security in their employment, they approach their employer with notice to transition from casual to permanent employment.<\/em><\/p><\/blockquote> In this example, the employee meets the requirements to give notice and pursue the casual choice pathway. After notice occurs, the employer is required to respond. Let\u2019s take a look.<\/p> Once an employer receives a notice from their employee, they have 21 days to respond. Before a response is made, the employer should consult with the employee about what changes the transition would make to their employment. This discussion should include:<\/p> After a consultation, the employer can accept or reject the notice of employment change.<\/p> When accepting a change, the employer needs to include what has been consulted previously and provide a new written employment agreement with their employee. The changes must immediately be implemented after the acceptance of employment status unless the employer and employee have agreed on a different commencement date.<\/p> When it comes to rejecting a notice, employers need a good reason. An employer can justify a rejection of the notice when either of the following circumstances apply:<\/p> Accepting or rejecting an employee's notice must be thoughtfully considered, whatever the circumstances, and communication should be clear and concise. If there is a disagreement, it may come down to both sides not effectively communicating. However, dispute resolution procedures are in place if the relationship is beyond solving in the workplace. It also should be noted that protections are in place<\/a> against any adverse actions taken in reaction to an employee submitting a notice.<\/p> Any dispute must be resolved first in the workplace. However, if a dispute occurs due to a disagreement about an employee\u2019s employment status, there are a number of avenues that can be explored:<\/p> Unfortunately, if either of these doesn\u2019t remedy the situation, the matter may have to be resolved in court, arbitrated by the Federal Circuit Court.<\/p> As the changes on the pathway from casual to permanent employment are new, there will be a degree of awkwardness in implementation. What is essential is good communication and honesty when discussing an employee's future in your business. As the date for small businesses to follow the new rules is set for 26 August 2025, there is plenty of time to review your procedures for managing your staff<\/a>.<\/p> You may find that the new process has new opportunities for dedicated employees<\/a> to commit fully to your business. Whatever the employee choice pathway brings, ensure you are prepared with proper payroll systems<\/a> to navigate the changing landscape.<\/p>","_et_gb_content_width":"","inline_featured_image":false,"_lmt_disableupdate":"no","_lmt_disable":"","footnotes":""},"categories":[344],"tags":[],"class_list":["post-295935","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-news"],"yoast_head":"\nWhat is the Employee Choice Pathway?<\/h2>\n
\n
How does the Employee Choice Pathway affect my business?<\/h2>\n
Key Components of the Employee Choice Pathway<\/h2>\n
Casual Worker Definition<\/h3>\n
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Notice to Change Employment<\/h3>\n
Employer Response<\/h3>\n
\n
Outcomes<\/h3>\n
Employee Choice Pathway Example<\/h2>\n
Scenario: Retail Casual<\/h3>\n
\n
What Small Businesses Can Do<\/h2>\n
Key changes to casual employment rights<\/h2>
Who is affected by the employee choice pathway?<\/h2>
The process involved<\/h2>
Defining casual employment<\/h3>
Giving notice of employment change<\/h3>
Responding to a notice<\/h3>
Accepting or rejecting an employment change notice from an employee<\/h3>
What happens if there is an employment dispute?<\/h2>
The bottom line<\/h2>