LEGAL CONSIDERATIONS WHEN TERMINATING A CASUAL EMPLOYEE

Most employers assume ending a casual arrangement is as simple as stopping the offer of shifts, and it’s over. In many cases, that’s true. But when you get it wrong, you’re looking at a Fair Work Commission claim, up to 26 weeks of compensation, and a months-long process to resolve. The rules around casual termination in Australia changed significantly in August 2024. A new definition of ‘casual employee’ and a new employee choice pathway mean that arrangements you thought were straightforward may now carry more legal risk than before.

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Can You Fire a Casual Employee Without Notice?

Yes and no. The answer depends on one question: Is this worker genuinely casual? Here is where employers make the most costly mistake: they assume ‘casual’ on the contract means ‘no strings attached.’ The Fair Work Commission does not agree. It looks at the reality of how someone worked, not what their contract says. If your ‘casual’ worked every Tuesday and Thursday for 14 months, received regular rosters, and had no realistic ability to decline shifts, the Fair Work Commission may find they are regular and systematic. A successful unfair dismissal claim can result in up to 26 weeks’ pay in compensation, plus legal costs. We have seen employers pay $40,000–$80,000 on matters they thought were low-risk.

Unfair Dismissal Claims by Casual Employees: What You're Actually Risking

Unfair dismissal is the most common legal risk employers face when ending a casual arrangement. Understanding the threshold and what it actually means in practice is what separates an employer who acts confidently from one who ends up in conciliation.

The Eligibility Threshold

Minimum employment period: 6 months (businesses with 15+ employees) or 12 months (small businesses under 15 employees)

The casual must have worked regularly and systematically throughout that period

The casual must have had a reasonable expectation of continuing employment

 All three conditions must be met. But here is the practical reality: the Fair Work Commission has found casual employees eligible in situations that surprised employers, including workers who occasionally declined some shifts, or who worked across varying days but with a consistent pattern.

 

What 'Regular and Systematic' Actually Means

This phrase sounds simple, but it is interpreted broadly. Courts and the Fair Work Commission have found workers to be regular and systematic where:

  •       They worked the same days each week, even if not identical hours
  •       They were offered and accepted shifts on a predictable, recurring basis
  •       Their roster was set weeks in advance, indicating planned ongoing engagement
  •       They had worked for the employer for an extended period without significant gaps

Contrast this with a true casual: someone called on for a single event, a harvest season, or genuinely unpredictable demand-driven shifts, they could freely decline.

What Compensation Looks Like If You Lose

Unfair dismissal compensation is capped at 26 weeks of the employee’s ordinary time earnings (or half the high income threshold, whichever is lower). For a casual earning $35/hour working 25 hours per week, that is approximately $22,750. But there are also legal costs, time, and reputational considerations for businesses where the matter becomes public.

Even if your casual has worked for only one week, they can bring a General Protections claim if you dismissed them because they exercised a workplace right — such as making a complaint, requesting flexible work, or (from August 2024) submitting a casual conversion notification. These claims carry uncapped compensation and civil penalties up to $19,800 per breach (individual) or $99,000 (corporation). They are brought within 21 days of dismissal.

2024 Fair Work Changes: The Rules That Caught Employers Off Guard

The Fair Work Legislation Amendment (Closing Loopholes) Act 2023 took effect on 26 August 2024 and changed casual employment in two significant ways. If you have not reviewed your casual arrangements since mid-2024, there is a real chance your current practices are non-compliant.

New Definition of Casual Employee

The old approach established by the High Court in WorkPac v Rossato [2021]  let employers rely almost entirely on the written contract to classify someone as casual. The 2024 amendment reversed this. Now, the Fair Work Act requires assessment of the real substance, practical reality, and true nature of the employment relationship.

Employee Choice Pathway

If a casual submits an employee choice notification and you terminate them shortly after even for unrelated reasons, expect a General Protections claim. The employee will argue that the dismissal was an adverse action for exercising a workplace right. This is a difficult claim to defend. If you receive a conversion notification and are considering ending the arrangement, seek legal advice before acting.

How to Terminate a Casual Employee Lawfully: The 6-Step Process

Follow this process every time you end a casual arrangement where there is any doubt about the employee’s status. Skipping steps is where employers create unnecessary risk.

Assess Genuine Casualness: Do This First. Review how many months the employee has worked, their schedule regularity, and whether they could realistically decline shifts. If they have worked 12+ months of regular shifts, treat this as a performance or conduct dismissal, not a casual ending.

Check for Conversion Notifications: Has the employee submitted a written request to convert to permanent employment under the employee choice pathway? If so, do not proceed with termination until you have legal advice. Ending employment immediately after a conversion notification is the highest-risk move an employer can make in this space right now.

Check the Award or Enterprise Agreement:  Many modern awards include minimum shift cancellation notice periods (often 1–2 hours) and may impose additional requirements for ending casual engagement. Identify the applicable award before processing termination.

Follow Procedural Fairness (If Required):  If the casual may qualify for unfair dismissal: issue a written warning, allow them to respond, and allow them to bring a support person to any formal meeting. Document every step with dates, attendees, and outcomes.

Issue a Written Termination Letter:
Even where not legally required, always put the termination in writing. Include: final date of employment, reason (where applicable), final pay details including casual loading, and any applicable entitlements. See the template section below.

Calculate and Process Final Pay Correctly: Pay all hours worked (including casual loading). Assess long service leave eligibility. Check whether any accrued entitlements apply if the casual is later found to be permanent. Errors in final pay create separate claims under the Fair Work Act.

Legal Considerations When Terminating a Casual Employee
Avoid Legal Mistakes When Terminating a Casual Employee
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Get clear advice on your rights before ending a casual employment arrangement. Understand your obligations, reduce legal risk, and take the right steps with confidence under Fair Work laws.

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What to Include in a Casual Employee Termination Letter

A termination letter is not just good practice; it is your paper trail if the matter ever reaches the Fair Work Commission. A well-drafted letter can significantly reduce your exposure. A poorly drafted one can be used against you.

 What Must Be In the Letter

Employee’s full name, position, and date of engagement
The date the letter is issued
The final date of employment (clearly stated)
The reason for termination should be specific and factual
Final pay breakdown: hours worked, casual loading rate, total amount, payment date
Long service leave assessment confirms entitlement or explains why it is not applicable
Return of company property (if applicable)
Post-employment obligations: confidentiality, non-solicitation (if in the contract)

 What Not to Include

Vague language like ‘the arrangement has run its course’ — this invites challenge
Admissions of fault, apologies, or comments about the employee’s performance without prior documented warnings
Anything that could be read as discrimination, victimisation, or retaliation

Notice, Final Pay and Entitlements What You Actually Owe

Genuine casual employees have no entitlement to notice of termination under the National Employment Standards. However, if the casual is found to have become permanent through their working pattern, the NES minimum notice periods apply, ranging from 1 week (under 1 year of service) to 4 weeks (over 5 years), plus an additional week for employees over 45 with at least 2 years of service.

The 25% Casual Loading Does Not Protect You From Everything

RISK: MED  Employers Often Assume Casual Loading Equals Immunity
Paying a 25% casual loading does not prevent an unfair dismissal claim, a General Protections claim, or a long service leave claim. It only substitutes for annual leave, personal leave, and notice entitlements and only where the worker is genuinely casual. If the Fair Work Commission later finds that the arrangement was not genuinely casual, you may owe back pay for those entitlements on top of any compensation awarded.

Record-Keeping: Why This Is Where Employers Lose Cases

The Fair Work Commission regularly sees employers who are confident they did everything right but have no records to prove it. The absence of documentation is treated as evidence against you, not as a neutral fact.

Under the Fair Work Act and Fair Work Regulations, you must keep employment records for 7 years. Civil penalties apply for failure to produce records when required by a Fair Work inspector. Beyond the legal obligation, records are your defence in any dispute.

 

What to Keep  Every Time, Without Exception

Employment contract and any written variations or extensions

Rosters and timesheets showing all hours worked and patterns over time

Copies of shift offers and the employee’s responses (especially declines)

Any written warnings  dated, signed, and with acknowledgement by the employee

Notes from every formal meeting: date, who attended, what was discussed, outcome

The termination letter with proof of delivery

Final pay calculation and proof of payment

Any communications related to conversion notifications

Small Business Employers: What the Fair Dismissal Code Means for You

If your business employs fewer than 15 people, the Small Business Fair Dismissal Code applies and provides a protected pathway if you follow it correctly. The Code requires that for a dismissal related to performance or conduct, you must:

  •       Warn the employee clearly that their role is at risk if the issue is not resolved
  •       Give the employee a genuine opportunity to improve or respond
  •       Allow the employee to have a support person present at any formal meeting
  •       Not dismissed for a first offence unless it constitutes serious misconduct

Small Business Employers: What the Fair Dismissal Code Means for You

What Employers Often Get WrongHow to Get It Right
Sending a text message or verbal notice to end the arrangement  no paper trail, no defenceIssue a written termination letter every time, regardless of employment type
Ending the arrangement immediately after the employee raised a complaint or took sick leaveDocument the reason for ending the arrangement  even where not legally required
Assuming the casual label on a contract is all the protection you needReview your casual workforce annually for genuine casualness under the August 2024 definition
Not checking whether a modern award imposes additional cancellation notice requirementsCheck the employee’s working history before acting; patterns matter more than the contract
Failing to calculate long service leave for long-tenure casualsSeek legal advice early  a 15-minute call costs nothing and can prevent a 6-month claim
Delaying action and allowing resentment to build  the longer you wait, the stronger the employee’s expectation of ongoing workAct promptly and support your decision with clear documentation

Frequently Asked Questions

Yes, if they are genuinely casual and have not worked regular and systematic hours for 12+ months. However, even genuine casuals cannot be dismissed for an unlawful reason under the General Protections provisions of the Fair Work Act, such as exercising a workplace right, making a complaint, or taking personal leave. The ‘no reason needed’ rule applies only where the ending is a straightforward non-engagement, not a punitive dismissal under employment law.

A genuine casual can generally be ended without warning, but ‘ended’ means not offering further shifts, not formally dismissing. If the casual has worked regularly for 12+ months, warnings and a fair process are required before termination. Skipping this step is one of the most common causes of unfair dismissal claims in Australia.

Yes, casual employees are not entitled to notice under the National Employment Standards. However, check the applicable modern award or enterprise agreement. Many awards impose minimum shift cancellation notice periods, and failure to observe them creates a separate underpayment liability under Fair Work obligations.

The Fair Work Legislation Amendment (Closing Loopholes) Act 2023, effective 26 August 2024, introduced two key changes: (1) a new casual employee definition requiring assessment of the real substance and practical reality of the employment relationship, not just the written contract; and (2) a new ’employee choice pathway’ allowing casuals to notify their employer of a request to convert to permanent employment, which employers must respond to within 21 days.

Yes, if they worked regularly and systematically for the minimum employment period (6 months for businesses with 15+ employees; 12 months for smaller businesses) and had a reasonable expectation of continuing employment. The Fair Work Commission looks at the reality of how the person worked, not what their contract labels them.

A compliant termination letter should include the final date of employment, the reason for termination (where applicable), final pay details including the casual loading calculation, any long service leave assessment, return of property requirements, and confirmation of post-employment obligations. Vague language (‘the arrangement has run its course’) should be avoided, as it invites challenge in employment disputes.

The Fair Work Act does not impose a specific minimum for shift cancellations, but many modern awards do. Retail, hospitality, and healthcare awards, for example, require anywhere from 1 hour to 2 hours’ notice before the shift was due to start. Check the applicable award. Failure to provide a minimum cancellation notice is an underpayment that employees can recover for up to 6 years.

Yes, but if the employee has worked regularly and systematically for 12+ months, a performance-based dismissal must follow a fair process: written warnings, opportunity to improve, formal meetings with a support person present, and thorough documentation. Dismissing a long-term casual for performance without following this process is one of the most straightforward paths to an unfair dismissal claim.

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Joe Shi
10:53 10 Mar 26
Tina Tang is doing excellent service job as a profesional lawer and provide valued information about property purchase issue.Thank you so much,we are appreciated to your skilled help and hope to cooperate with your esteemed company,current residential living apartment 506/2-4 Culworth Ave Killara should be put in market,we hope Tina Tang will provide support as well.thank you so much.
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We had an excellent experience with CMI Legal during our property purchase. The team was highly professional, detail-oriented, and extremely knowledgeable throughout the entire process. They carefully reviewed all contracts, clearly explained potential risks, and provided practical advice at every stage, which gave us great peace of mind. Communication was prompt and clear, and they were always patient in answering our questions. Their efficiency and attention to detail made what could have been a stressful process smooth and well-managed. We would confidently recommend CMI Legal to anyone looking for reliable and trustworthy conveyancing and legal services, with special thanks to Tina for her professionalism, patience, and exceptional support throughout the process.
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Attorney Tina was professional and patient; I am very grateful for her legal assistance during my home sale process.
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John and Tina are the best! I just had another settlement through them. Everything was so smooth and they are reminding you every step for the key points.
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I recently used CMI and worked with Tina for my property settlement. Tina was extremely helpful, patient and very professional throughout the entire process. She explained everything clearly, kept me updated at every step and made the whole experience smooth and stress-free. I couldn’t have asked for a better lawyer. Highly recommend Tina and the CMI team!
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Andy Hsieh
00:31 27 Nov 25
I’ve been incredibly lucky to have Tina as my solicitor. She has been outstanding throughout the entire contract exchange and settlement process. She is always the first to respond, timely, and extremely efficient. Her attention to detail is exceptional, and she consistently makes sure everything is in the buyer’s best interest. Super attentive, helpful, and genuinely caring. I wouldn’t hesitate to recommend Tina to anyone looking for reliable and professional legal services.
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David Lin
11:41 23 Nov 25
Many thanks to Senior Lawyer Tina Tang for helping me handle the sale of my property in Sydney. She liaised with the real estate, banks and buyers broker and explained everything well and handled the sale meticulously.Her professional ability, experience and sense of responsibility are trustworthy. I recommend Tina and CMI for anyone looking for support in real estate sales.
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John Zhang has been absolutely great in helping me with my EOI and application for a skilled visa in Australia. On both calls I've had with John, I have had a multitude of questions for him which he answered in depth and gave me all the information I required. He really has a great amount of knowledge and I would highly recommend him and the CMI legal team for their efficiency and professionalism.
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03:22 30 Sep 25
I was very fortunate to have Tina TANG from CMI as my conveyancing solicitor for the recent sale of my property. She demonstrated exceptional professionalism and dedication throughout the entire process — from preparing the contract, exchanging contracts, right through to settlement. What impressed me the most is that even after settlement, she continued to go above and beyond to assist me as the vendor, making sure everything was properly taken care of.

Her diligence, patience, and attention to detail gave me great peace of mind and took away a lot of the stress of selling a property. I would highly recommend her to anyone looking for a reliable, professional, and truly supportive conveyancing solicitor. ⭐⭐⭐⭐⭐
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Outstanding service from start to finish. Tina Tang handled my unit's sales contract with exceptional professionalism. Communication was always clear and prompt, making the whole process smooth and stree free. I highly recommand Tina to anyone seeking a reliable and knowledgeable solicitor.
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I’ve had an incredibly positive experience working with John & Winnie on my matter. From start to finish, they have been professional, knowledgeable, and genuinely supportive throughout what’s been a stressful time for me.

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11:57 26 Jun 25
As an old customer of CMI, this year is already the 8th year. Special thanks to attorney John and attorney Tina for carefully answering our various questions, providing a lot of professional advice and help, allowing us to easily complete each transaction.
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01:39 23 May 25
Tina was a great lawyer - she was always incredibly knowledgeable, answered all questions promptly, and very friendly. Would recommend Tina!
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Tina was a great help in guiding us through our first home buying experience. She gave us a lot of great explanations and advice from initial discussion of the process through every step until successful settlement. Communication and resolution of issues was prompt and professional.
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Tina is a fantastic lawyer. her responses to my queries were thorough and timely, and impeccable organizational skills! Truly appreciated her clear and consistent communcation througout the entire property-purchasing process. she handled everything with profressionalism and expertise, making what could have been a stressful experience much smoother. Highly recommend!
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We had the pleasure of working with Tina as our solicitor for our first home purchase, and we couldn’t have been in better hands. She carefully explained every step of the process, guiding us through what initially felt overwhelming and unfamiliar. Buying off the plan made us particularly cautious, especially when it came to reviewing legal documents. Tina’s meticulous approach put us at ease—she ensured we both clearly understood each aspect, taking the time to highlight and reorganise information to make it more accessible. Her dedication and professionalism made the entire experience far less daunting, and we’re truly grateful for her support.
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John and Tina have provided great professional legal service since 2017 for me.
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5 stars is insufficient to express their work. We were working Dee and she is an amazing and thorough professional. She goes above and beyond and explains matters that makes you understand things really well. Thank you Dee for your amazing work.

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