Casual workers have won the right to demand a permanent full-time or part-time job after 12 months under a new Fair Work Commission ruling.
But employers will still have the right to refuse the request if the change would substantially alter the worker's hours to accommodate them as a permanent staff member.
Unions had called for the right to be available after just six months and for the minimum number of daily hours worked to increase to four, but these requests were rejected.
In its decision on Wednesday, the Fair Work Commission said it was necessary for modern awards to contain a provision allowing casual employees to ask for conversion to permanent full-time or part-time work after 12 months.
The decision will apply to 88 modern awards that do not contain such a provision.
The move was largely welcomed by the union movement but blasted by employer groups.
Australian Council of Trade Unions secretary Sally McManus said an "epidemic of insecure work" in Australia was "wrecking" the lives of families, individuals and communities.
"The decision of the Fair Work Commission today plugs one small hole in this epidemic," she said.
Kylie Grey, an early childhood educator in Melbourne and witness in the union case, who has a young family, was happy to find a permanent part-time job last year after a period of working as a casual in a different job.
"If you don't have a secure income and a secure job then you are unlikely to be budgeting and spending for the things that are great for the economy," she said.
Professor John Buchanan from the University of Sydney business school said the commission's decision would provide a common standard entitling casual workers to apply for conversion.
"It doesn't raise the standard, it just spreads the standard to a larger number of workers and that standard is pretty weak," Professor Buchanan said.
The Australian Manufacturing Workers' Union said the commission's decision was "a kick in the guts for ordinary workers trying to make ends meet in an uncertain employment market".
"Employers are using the current system to exploit vulnerable casual workers and keep them working under insecure employment arrangements," AMWU national president Andrew Dettmer said.
The Australian Retailers Association said the decision would impose extra costs and reduce flexibility for employers.
"We fear this verdict will significantly impact retailers as casuals' flexible hours are essential to the industry," ARA executive director Russell Zimmerman said.
"Retail employees are an important asset for retailers and the overall industry, therefore the ARA will be seeking more flexible part-time arrangements through the Award Review process".
Sydney retailer Michael Newton-Brown said most of the staff in his six shoe boutiques were casual which "suits them and it suits me".
He said the commission's decision was "a further nail in the coffin of small retailers" whose workforce needs fluctuated.
The Australian Industry Group welcomed the commission's rejection of union calls for an absolute right for casuals to be converted to permanent employment after six months of regular work and for a standard four-hour minimum engagement period for casuals and part-timers.
"If the unions' claims had been accepted, the jobs of thousands of casual employees were at risk," AIG chief executive Innes Willox said.
"The level of casual employment in Australia has been around 20 per cent for 19 years, with no sign of the level increasing. Union arguments about the 'casualisation' of the Australian workforce, are a myth."
Professor Buchanan said the AIG was technically correct, but had failed to acknowledge the context of higher levels of unemployment and underemployment over that period which had made jobs more insecure.