"Employers are able to call people casuals — fake casuals — when they're not casuals," McManus told journalists earlier this week.
"They tell them to go and get an ABN number when they're actually permanent workers. They convert them to labour hire just to reduce their wages and conditions."
McManus told news.com.au the ACTU's Change the Law campaign would fight for "good, steady jobs that Australians can count on".
She said casual work affected people's security.
"When people don't have permanent jobs or jobs they can count on, they have trouble getting loans and paying the rent, they're constantly waiting to find out if they are working or not. It's shifting stress and insecurity onto employees and it's affecting our way of life," she said.
"We used to have laws that defined what a casual was — an employer couldn't just call someone a casual. But these days even if someone is working the same hours every week for years, their employer can still say 'you're a casual', and it's just not true.
"At the moment there's no definition so an employer can just call people casual, and they lose their entitlements like sick leave and holiday leave.
"Employers have never had it better. Profits are going up and wages aren't. You'd think those things would make them think 'maybe it's time to give workers better pay and job security' but unfortunately they're not responding that way."
McManus said opponents of the campaign, which include new Jobs Minister Michaelia Cash, were "out of touch with the lives of ordinary Australians".
However, several high-profile employers and industry groups have also attacked the campaign.
Australian Retailers Association (ARA) executive director Russell Zimmerman said casual staff were "the key to retail success" and that restricting casual employment would devastate the already struggling industry.
"Last week we saw foot-traffic increase by 13 per cent year-on-year, and without the flexibility of casual employees Australian retailers would not have been able to staff their stores adequately during the busiest time of the year," he said.
"If the unions want permanent employment, then we would need to see more flexibility around the hours of work, and the notification period of roster changes for part-time employees.
"With unpredictable trading hours in the industry, retailers need to be able to add hours to staff without paying overtime penalties, especially during busy trading periods like Christmas."
AI Group head of national workplace relations policy Stephen Smith went one step further, telling The Australian the ACTU's proposals were "ridiculous" and would be "harmful for employees, businesses and the broader community".
"Changes are needed to the Act to increase flexibility, not to remove essential existing flexibility," he said.
"Casual employment suits a very large number of people, who prefer this form of employment because it gives them the flexibility that they want or need."
