Casual Conversion in 2026: What the Closing Loopholes Reforms Mean for Labour Hire
Recent amendments to the Fair Work Act have changed how casual employment is defined and how labour-hire workers can convert to ongoing employment.
The Fair Work Legislation Amendment (Closing Loopholes No.2) Act introduced a new pathway for casual employees - including labour-hire workers - to seek conversion to permanent employment, and tightened the definition of who is genuinely a casual.
The new definition of casual
From the commencement of the reforms, whether a worker is truly a casual is assessed on the real substance of the relationship, not just the label on the contract. A regular pattern of work, a firm advance commitment and an expectation of ongoing engagement now point toward permanent employment, even when paid casual loading.
Employee Choice pathway
Eligible employees can give notice that they want to convert to permanent employment after meeting service and pattern criteria. The employer must respond within statutory timeframes and may only refuse on specified grounds. Disputes are resolved by the Fair Work Commission.
What this means for hosts and providers
- Long-running labour-hire placements with stable shift patterns now warrant a conversion review.
- Contracts and rosters need to align with the worker's lived experience of the role.
- Decisions to refuse conversion must be documented and based on the lawful grounds in the legislation.
- Provider and host should coordinate before any conversion conversation reaches the worker.
How RELAY Labour Hire handles it
We track placement tenure and shift pattern on every assignment. Once a worker approaches the eligibility window, we open a structured conversation with both the worker and the host. Where ongoing demand exists, conversion to a directly employed role with the host - or to a RELAY ongoing role - is often the right outcome.
