Published: October 2025
Australian employment law recognises three primary types of employment relationships, each with distinct characteristics, entitlements, and obligations. For small and medium business owners, understanding these differences is crucial for making informed hiring decisions, managing costs effectively, and ensuring compliance with the Fair Work Act 2009.
The choice between full-time, part-time, and casual employment affects everything from wage costs and leave entitlements to termination requirements and workplace flexibility. Key reforms were passed in August 2024, with many provisions having staged commencement dates (for example, the Employee Choice Pathway and other casual conversion changes come into effect in 2025), making it essential for employers to stay current with their obligations.
Full-time employment represents the traditional employment relationship, characterised by ongoing commitment, regular hours, and comprehensive entitlements. Full-time employees usually work an average of 38 hours each week and are usually employed on a permanent basis or on a fixed term contract.
Working Hours: Full-time employees typically work 38 hours per week, though this can vary according to modern awards or enterprise agreements. The standard working week is Monday to Friday, though shift patterns may differ across industries.
Employment Security: Full-time and part-time employees have a firm advance commitment to ongoing employment and can usually expect to work regular hours each week. This provides both employer and employee with predictability and stability.
Leave Entitlements: Full-time employees receive comprehensive paid leave benefits including:
Base Salary Costs: Full-time employees receive their agreed salary or hourly rate without casual loading, making their base wage costs lower than equivalent casual positions.
Leave Cost Calculations: For a full-time employee earning $60,000 annually:
Superannuation Obligations: Employers must contribute 11.5% of ordinary time earnings to superannuation for full-time employees from 1 July 2024, increasing to 12.0% from 1 July 2025. This includes leave payments.
Termination Costs: A full-time employee is usually entitled to written notice when their employment ends, or payment instead of notice. Notice periods range from 1-5 weeks depending on length of service, plus redundancy pay if applicable.
Workforce Stability: Full-time employees provide consistency in staffing, enabling better planning and relationship building with customers and stakeholders.
Skill Development: The ongoing nature of full-time employment justifies investment in training and development, leading to improved productivity and specialised skills.
Lower Administrative Burden: Predictable hours and established routines reduce the administrative complexity of roster management and payroll processing.
Fixed Costs: Full-time employees represent ongoing financial commitments regardless of business fluctuations, making it challenging to adjust labour costs quickly.
Leave Coverage: Extended absences require replacement staff or redistribution of workload, potentially disrupting operations.
Termination Complexity: Ending full-time employment requires compliance with notice periods, redundancy provisions, and unfair dismissal protections.
Part-time employment combines the security of permanent employment with reduced working hours, providing flexibility for both employers and employees whilst maintaining most full-time entitlements on a proportional basis.
Working Hours: Part-time employees are usually employed on a permanent basis or on a fixed term contract and work less than 38 hours per week with predictable, regular schedules.
Employment Security: Like full-time employees, part-time workers have ongoing employment relationships with advance commitment to continuing work, providing stability for both parties.
Proportional Entitlements: Part-time employees get the same minimum entitlements as a full-time employee, but on a pro-rata basis. This includes all forms of paid leave calculated proportionally to their working hours.
Annual Leave Calculation:
Personal/Carer's Leave Calculation:
Example Calculation for 25-hour/week Employee:
Wage Costs: Part-time employees receive their base hourly rate without casual loading, making them cost-effective for consistent, ongoing work requirements.
Leave Cost Analysis for 25-hour/week Employee (Earning $30/hour):
Operational Benefits: Part-time employees can cover peak periods, extend operating hours, or provide specialised skills without full-time commitments.
Peak Period Coverage: Retail businesses often employ part-time workers to cover busy periods whilst maintaining core full-time staff for consistent operations.
Skill Retention: Part-time arrangements can retain valuable employees who cannot commit to full-time hours due to personal circumstances.
Cost Management: Part-time positions allow businesses to access skilled workers whilst managing labour costs more precisely than full-time arrangements.
Extended Operating Hours: Part-time employees can extend business operating hours without overtime costs for full-time staff.
Casual employment provides maximum flexibility for both employers and employees but comes with higher hourly costs and recent regulatory changes that affect long-term casual arrangements.
No Ongoing Commitment: Casual employees work on an as-needed basis without guaranteed hours or ongoing employment commitment, providing flexibility for variable workloads.
Casual Loading: Casual employees covered by the National Minimum Wage also get a 25% casual loading to compensate for lack of paid leave entitlements.
No Paid Leave: Casual employees don't receive paid annual leave, personal/carer's leave, or other permanent employee benefits, though they can access unpaid leave in certain circumstances.
Casual Conversion Reforms: The casual conversion reforms were legislated in August 2024, but the Employee Choice Pathway and other changes have staged commencement dates in 2025. The Employee Choice Pathway is available from 26 February 2025 for most employees and 26 August 2025 for small business employers.
Employee Choice Pathway: This new pathway allows eligible casual employees to request permanent employment if they meet specific criteria regarding regularity of work and reasonable expectation of ongoing employment.
Higher Education Restrictions: Some employees in the higher education industry can no longer be engaged as a casual on a fixed term contract.
Hourly Rate Calculations (effective 1 July 2024):
The Fair Work Commission has made further adjustments for 2025 - always cite the effective date when using wage figures.
Cost Comparison Example (40 hours/week, 50 weeks/year, using July 2024 rates):
Casual Employee:
Full-Time Equivalent:
Additional Casual Considerations:
Seasonal Fluctuations: Tourism, retail, and hospitality businesses use casual staff to manage seasonal demand variations without ongoing commitments.
Project-Based Work: Construction, events, and consulting industries employ casuals for specific projects with defined timeframes.
Trial Periods: Some employers use casual arrangements to assess employee suitability before offering permanent positions.
Specialist Skills: Casual employment suits consultants, trainers, and specialists who work across multiple organisations.
Conversion Obligations: From February 2025 (most employers) and August 2025 (small business employers), eligible casual employees may request permanent employment through the Employee Choice Pathway, creating potential obligations for employers.
Higher Direct Costs: The 25% loading makes casual employees more expensive per hour than permanent staff for ongoing work.
Limited Control: Casual employees can refuse work offers and may not be available when needed, reducing operational reliability.
Training Investment Risks: Investing in casual employee training may not provide returns if they leave for permanent positions elsewhere.
Full-Time and Part-Time Employees:
Casual Employees:
Award Classification: All employees must be classified correctly under relevant modern awards, which may specify different entitlements for each employment type.
Minimum Wage Requirements: Awards often specify higher minimum wages than the National Minimum Wage, with different casual loading rates ranging from 20-25%.
Penalty Rates and Overtime: Each employment type has specific penalty rate and overtime provisions that vary by industry and award coverage.
Payment Requirements: Employers must pay superannuation for all employees earning over $450 per month, regardless of employment type. The Superannuation Guarantee rate is 11.5% from 1 July 2024, increasing to 12.0% from 1 July 2025.
Calculation Differences:
Work Requirements Analysis:
Financial Considerations:
Operational Needs:
Professional Services: Often favour permanent employment for client relationship continuity and skill development, with casual arrangements for specific projects or peak periods.
Retail and Hospitality: Commonly use mixed models with permanent core staff and casual employees for peak trading periods and weekend coverage.
Manufacturing: Typically prefer permanent employees for consistency and safety, with casual labour for seasonal production increases.
Healthcare: Uses permanent staff for core services with casual employees covering shifts, holidays, and temporary increases in demand.
Multi-Employment Type Processing: Modern payroll systems must handle different entitlement calculations, loading rates, and compliance requirements for each employment type simultaneously.
Leave Management: Automated systems should calculate pro-rata entitlements for part-time employees whilst tracking casual conversion eligibility based on work patterns.
Award Integration: Systems should incorporate relevant modern award provisions, penalty rates, and industry-specific requirements for accurate payment calculations.
Demand Forecasting: Technology can help predict staffing needs and recommend optimal employment type mixes based on historical data and business projections.
Cost Modelling: Advanced systems provide real-time cost comparisons between employment types for specific roles and work patterns.
Compliance Monitoring: Automated alerts for casual conversion thresholds, leave accrual limits, and other regulatory requirements.
The employment landscape continues evolving with potential changes including:
Hybrid Models: Many businesses are developing sophisticated employment mixes that combine permanent core staff with casual and contract workers for optimal flexibility and cost management.
Skills-Based Hiring: Growing emphasis on specific skills rather than employment type, leading to more strategic workforce planning approaches.
Remote Work Integration: Technology enables new forms of flexible employment that blur traditional boundaries between employment types.
Effective management of diverse employment types requires sophisticated HR systems that can handle complex compliance requirements whilst supporting business flexibility and growth. Professional HR services provide the expertise needed to navigate the intricacies of Australian employment law across full-time, part-time, and casual arrangements.
Comprehensive HR management ensures businesses can leverage the advantages of each employment type whilst minimising compliance risks and administrative burdens. This includes developing appropriate policies, implementing efficient systems, and providing ongoing support for managers dealing with mixed workforce arrangements.
Modern HR solutions integrate technology, legal compliance, and strategic workforce planning to help businesses build optimal employment structures that support both operational needs and employee satisfaction across all engagement types.
A casual employee can change to permanent employment (full-time or part-time) at any time if the employer and employee agree. From February 2025 (most employers) and August 2025 (small business employers), eligible casual employees will have the right to request permanent employment through the Employee Choice Pathway if they meet specific criteria regarding work patterns and reasonable expectation of ongoing employment.
For equivalent work (40 hours/week, 50 weeks annually, using July 2024 wage rates): A casual employee at minimum wage with 25% loading costs approximately $67,190 including wages and superannuation, whilst a full-time equivalent costs approximately $59,650 including wages, leave provisions, and superannuation. However, casual employees provide more flexibility and don't require notice periods or redundancy payments. Note: Superannuation rates increase to 12.0% from July 2025.
All employers must maintain time and wages records, employment contracts, and leave records. For casual employees, you must also track work patterns to assess conversion eligibility and document the genuine casual nature of employment. Records must be kept for 7 years and be available for Fair Work Ombudsman inspection.
Yes, part-time employees are entitled to overtime rates for hours worked beyond their contracted hours or beyond 38 hours per week, whichever provides the greater benefit. Overtime rates vary by modern award but are typically time-and-a-half or double-time depending on circumstances.
Misclassification can result in significant penalties, back-payment of entitlements, and legal action. The Fair Work Ombudsman can investigate and pursue recovery of underpaid wages, leave entitlements, and superannuation. Civil penalties for serious contraventions can reach $93,900 for individuals and $469,500 for corporations.
Modern awards and enterprise agreements often specify minimum engagement periods (typically 3-4 hours) and may include minimum weekly hours for part-time employees. Check your relevant award for specific requirements as these vary by industry.
In many awards, the casual ordinary hourly rate (which includes loading) is used as the base for penalty and overtime calculations. This means casual employees receive both their casual loading and applicable penalty rates, making weekend and overtime work significantly more expensive for employers. However, exact calculations depend on the specific award or agreement - always check the applicable award for precise requirements.
No, casual employees can refuse shifts without penalty as they have no ongoing commitment to work. However, repeatedly refusing reasonable shift offers without valid reasons may affect future work opportunities. Some modern awards include provisions about reasonable refusal of work.
Notice periods depend on the employee's length of service: 1 week for service under 1 year, 2 weeks for 1-3 years, 3 weeks for 3-5 years, 4 weeks for over 5 years, and 5 weeks for employees over 45 with more than 2 years service. Employers can pay in lieu of notice.
Full-time and part-time employees receive paid public holidays if they fall on normal working days. Casual employees are entitled to public holiday pay only if they would ordinarily work on that day and are available to work. Public holiday penalty rates apply to all employment types when work is performed.
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