On this page

Protect Your Business

Request a Consultation with One of Our Advisers Today!

Fixed-term, Casual and Permanent – What is the Difference?

Published March 09, 2020 (last updated July 24, 2020) Author: Employsure
Employer understanding fixed term, casual and permanent employment

From the day you hire your first employee, you need to understand how your employee can be engaged. This way you can accurately advertise for a fixed-term, casual, permanent or other position when the time comes.

Having a complete understanding of the varying types of employment engagements is vital to your business.

In particular, you need to understand the particular engagement of your employees, the most common of which include casual, permanent, and fixed-term employees.

The employment contract should reflect the type of engagement which the employee will be employed under, as well as the employment conditions that are agreed between the employer and employee.

Keep reading to learn about different some common employment engagements, along with some of the most frequently asked questions about employment status.

Types of Employment

Not all employment engagements are the same. Each type of employment engagement brings with it a different set of obligations for the employer and rights for the employee. Are you confident you know the difference between full-time and fixed-term, part-time and casual?

The following information is general in nature. The applicable Modern Award or enterprise bargaining agreement may provide different entitlements and definitions than discussed below.

Permanent Employment

Permanent employment is the most common employment type in Australia. The term ‘permanent employment’ covers both full-time and part-time employees.

It is common for permanent employees to agree to employment conditions under the pretense that they will work for the company until their employment is terminated one way or another (via resignation, redundancy, dismissal for misconduct, etc). There is no set date for the end of their contract.

Permanent employees are entitled to various entitlements including, but not limited to, paid annual leave, paid sick leave and notice of termination. In many cases, these entitlements might be applied on a pro-rata basis for part-time employees.

Fixed-term Employment

Fixed-term employees have some of the same as their equivalent permanent employee.

The biggest difference from permanent employees regards the fixed-term, as opposed ongoing, nature of employment. The contract for a fixed-term employee states directly when the term of employment will end.

Fixed-term employees are often engaged to cover for an absent employee (e.g. as maternity leave cover), to fill a human resources gap, or staff a big project. Typically, fixed-term contracts will run anywhere from a few months to a year, however, can also be as long as a few years.

Fixed-term employees have most of the same rights as permanent employees such as leave entitlements and Award allowances.

Casual Employment

However, casual employee has been determined by the courts and is determined by the manner

The contract for a casual worker may outline the business hours of operation, however, generally should not include any guarantee to ongoing work (unless a Modern Award or enterprise bargaining agreement provides otherwise). This means that contract should not provide a minimum or maximum number of hours per week.

Casual employees also have different entitlements to permanent employees. Some of the differences include:

  • No access to paid annual or sick leave
  • No notice of termination
  • No obligation for the employee to be available to work (that is they can reject shifts as they please)
  • Are entitled to casual loading – i.e. higher hourly pay than a permanent employee

Casual employment is most beneficial when you some extra work done but don’t know exactly how much work you’ll need to be completed or what specific days you’ll need that work done. You can call a casual employee as you have a need, and then the employee comes in. This saves you the hassle of coming to an agreement with your permanent part time staff to work extra hours, and in some circumstances at the applicable overtime rate, if the Modern Award or enterprise bargaining agreement indicates this.

If a casual works a regular and systematic pattern of hours, they may be entitled to claim that they are actually a permanent employee – and therefore they should enjoy the same privileges as one. This means that casuals whose working arrangements appear to reflect permanent employment more than casual employment (as discussed above) may be entitled to back-dated leave entitlements and guaranteed ongoing hours.

If an employee has been engaged as a casual on a regular and systematic basis, under some Modern Awards, the employee may also have the right to request that their employment be converted to a permanent position. Read more about casual conversion over here.

A common myth associated with casual employment is that they are not entitled to unfair dismissal. The truth is however that casual employees who are engaged on a regular and systematic basis and have a reasonable expectation of continuing employment are entitled to make an unfair dismissal claim after passing the minimum employment period.

Want to know more about Casuals?

There has been a recent Court ruling regarding the status of casual employees. Download our free guide to find out more

Temporary Employment

You can hire temporary employees to meet temporary business demands.

Temporary employees often come in the form of a new fixed-term or casual employee or may be engaged as a contractor.

The fixed-term and casual employment types provide employers with the flexibility to more easily manage the uncertainty of temporary employment. If you’re thinking about making some temporary hires, this article outlines the pros and cons of fixed-term and casual staff.

Keep in mind that the applicable Modern Award or enterprise bargaining agreement may contain specific provisions for hiring temporary employees.

If you are wanting to engage a contractor to fulfil your temporary needs, then you should review your contractor arrangements to identify any risks of sham contracting. Find out more about sham contracting here.

Key Differences Between Permanent, Casuals, and Fixed Term

Permanent employees arguably have the strongest job security of these three types of employment. They have a contract that states their agreed hours and are expected to attend work for their contract hours (when not on leave or another approved absence).

Permanent employees are entitled to most of the commonly known workplace entitlements – including paid leave and notice of termination, amongst other things.

Both permanent and regular and systematic casuals become entitled to claim unfair dismissal after their minimum employment period. Permanent employees, in contrast, have an expectation of ongoing work from their initial engagement, whereas casuals do not.

Casuals do not generally have access to paid leave and in some circumstances may not have access to unfair dismissal provisions as discussed above. Employers have much more flexibility with regards to giving casuals notice of termination. Employers do not generally need to give casual employees notice, however may need to be cautious of minimum engagement periods in Modern Awards.

However, casuals are entitled to casual loading (generally 25% on top of minimum hourly rate) and do not have to be available to work.

Employees on fixed-term contracts have some of the same entitlements as permanent employees in equivalent roles. If the employee has not been engaged on back to back contracts and their employment is ended in line with the specific end date or project as outlined in their employment contract, they should not have access to unfair dismissal.

You can also download the infographic here.

If you are still unsure, get peace of mind by speaking to an Employsure specialist for free advice today on 1300 207 182.

Want To Know More?

When you understand the difference between employee status’, you can start hiring purposefully.

Keep your company safe and use an employment relations service. For all your employment relations questions, contact us.

Here is an infographic outlining the different types of employment contract: fixed term, casuals and permanent (full-time and part-time).

Join 27,000 Business Owners.

Free Business Resources and Expert Advice 24/7 to Make Your Workplace Better.

Frequently Asked Questions

  • Are Fixed-Term Employees Entitled to Benefits?

    Fixed-term employees are entitled, like every other employee, to the 10 minimum entitlements that make up the National Employment Standards. These benefits, or entitlements, include for permanent and fixed term employees’ things like paid annual leave, public holidays, and the right to request a flexible working arrangement in certain circumstances.

  • How Many Times Can You Renew a Fixed-Term Contract?

    There is no specified limit to how often you can renew a fixed-term contract.

    Fixed-term employees have most of the same rights as permanent employees such as leave entitlements and Award allowances.

  • Are Fixed-Term Contract Employees Entitled to Annual Leave?

    A fixed-term contract employee is entitled to annual leave, accrued at the same rate as an equivalent part- or full-time employee.

  • What is Permanent Part-time Employment?

    Permanent part-time employment means that the employee works, on average, less than 38-hours per week, and on a regular and ongoing basis. Although the definition may vary depending on your Modern Award.

    This is as opposed to a fixed-term, part-time employee, who does not work on an ongoing basis, and a permanent, full-time employee, who works on average, 38-hours a week.

  • Do Casual Workers Need a Contract?

    All employees in Australia are on some kind of contract. However, this contract does not need to be written – it can be a verbal contract.

    Once both the prospective employer and employee have agreed to work together, the employer must comply with the relevant legislation with regards to employment type, and, if applicable, the relevant Modern Award or enterprise bargaining agreement.

    Although not a requirement of the Fair Work Act, it is still best practice to have a written contract in place, as it can clarify key points of agreement between the employer and employee.

  • What is the Difference Between Casual and Part-Time Employment?

    A part-time worker will have an expectation of ongoing employment and regular hours and these hours will, on average, less than 38 hours per week.

    A casual worker, on the other hand, has no guaranteed hours of work, and often works irregular hours.

    The two employment types also have different entitlements when it comes to paid leave; part-time employees can access paid annual and sick leave, for instance, while casuals can only access unpaid carer’s leave. Casuals may also end employment without notice.

    The above information is general, and may differ according to the applicable Modern Award, enterprise bargaining agreement or contract.

  • Can a Temporary Employee Become Permanent?

    Yes. There is a clause which is included in many Modern Awards, called Casual Conversion; this allows casuals to request a ‘conversion’ to permanent employment if they meet a few criteria (e.g. regular and systematic employment for a certain period of time).

    A fixed-term employee may also be able to change to permanent work if their work with an employer has turned into ongoing employment.

    An employer may also simply decide to offer a temporary employee a permanent position.

  • Do Temporary Employees Get Benefits?

    Yes. Temporary employees are entitled to National Employment Standards (NES). All employees in Australia are entitled to these entitlements. The NES is made up of ten minimum entitlements, however the workers employment status, Modern Award, enterprise agreement and contract will impact on exactly what the employee will be entitled to.

About Employsure.

Employsure is Australia’s largest workplace relations specialists. We take the complexity out of workplace laws to help small business employers protect their business and their people.

Get Workplace Advice Now

Call Our Team of Expert Advisers Who Will Help You with Your Workplace Questions.

Have a question?

Have a question that hasn’t been answered? Fill in the form below and one of our experts will contact you back.

  • This field is for validation purposes and should be left unchanged.

Call Now

1300 207 182

Live Chat

Click here