The Fair Work Act 2009 has been around a while now, but many Australian employers still struggle with public holiday regulations and correctly paying employees for them.
The Act is quite complex and public holidays vary depending on the state or territory, but every employer needs to correctly calculate and pay employees for public holidays. Not only is it an essential part of leave management and payroll, it’s a legal requirement under the National Employment Standards (NES).
This short article focuses on paying public holidays. I won’t be attempting to cover every public holiday scenario, as there are many moving parts. Instead, here is a broad overview and answers to some questions we commonly receive from Australian businesses.
Working out public holiday entitlements
Employees on fixed work schedules
All employees are entitled to take the day (or part day) off on public holidays. Working this entitlement out is pretty straightforward for any worker with a fixed working schedule (whether part-time or full-time).
Start by asking yourself: is the public holiday a day the person would normally work?
A regular employee who works a 38-hour, Monday-Friday week will most likely receive all public holidays every year (8 days under the NES and more, depending on where they are based for work). The only times they might miss out is if they are off work on agreed unpaid leave for some reason.
An employee who has a fixed, part-time pattern of working every Tuesday to Thursday will not receive any public holiday payments for public holidays that fall on a Monday or a Friday.
Employees on variable schedules
Employees who work variable schedules can present challenges, but most businesses still operate a roster system and you can rely on this to determine who gets a public holiday.
Where the rostered days naturally rotate to fall on the public holiday, it is a day the employee would normally work, so they get the public holiday entitlement. Where the roster naturally rotates so the public holiday is a rostered day off, the public holiday is not a day they would normally work.
You must also look at the employee’s award, enterprise agreement, and/or employment contract to ensure you are meeting any entitlements specified there.
You cannot adjust the roster or take an employee off the roster so that they miss out on public holiday entitlements.
If you are in doubt about normal working days because of the employee’s work pattern, review their average pattern over the previous 4 weeks.
In the case of someone covering a shift for someone else on a public holiday, if it is not that person’s usual working day, they get paid according to their award, agreement or employment contract, and the person whose shift it normally is gets paid their base rate for the public holiday.
What to pay workers
Having established whether the public holiday is a day the employee would normally work, you then have to look at what to pay them.
If the person had the day off
An award, enterprise or other registered agreement, or employment contract may set out rules and entitlements when an employee does not work on a public holiday, but generally:
- If the day is a day they would normally work, the employee receives their base rate of pay for hours they would have worked (not including any bonuses, allowances, loadings, overtime or penalty rates).
- If the day is not a day they would normally work, they get the day off but don’t receive payment.
If the person worked
What to pay the employee will depend on what’s in their employment contract or whether they are covered by an award, enterprise agreement (or other registered agreement), which can stipulate entitlements for working public holidays, including:
- Extra pay (e.g public holiday rates).
- An extra day off or extra annual leave.
- Minimum shift lengths on public holidays.
- Agreeing to substitute a public holiday for another day.
What about casual staff?
Casual employees are entitled to take the day off on public holidays, but do not receive payment for it, as their employment is on an as-needed basis.
If they work on a public holiday, they are entitled to be paid their base rate of pay.
When holidays fall on a weekend
In some cases, when a public holiday falls on a Saturday or Sunday, an employee’s public holiday might be moved to the following Monday (or in some cases Tuesday).
The additional public holiday only applies for employees who would not normally work on the calendar date of the public holiday. Employees that would normally work on the calendar date don’t have the public holiday benefits moved to the Monday.
Employees cannot ‘double dip’, which means that if they work the public holiday as well as the observed holiday, their public holiday is on the calendar date.
Making employees work on a public holiday
Any employee can agree to work on a public holiday, but an employer must actively request this, if the request is reasonable. Employees have the right to refuse the request if they have reasonable grounds (or the request to work is not reasonable).
The employer’s request needs to consider relevant circumstances, e.g. the employee's personal situation, the business’ needs and the employee’s role, entitlements under relevant awards or agreements, and the amount of notice given.
A recent case in the Federal Court of Australia has reinforced the need for employers to ask workers to work on a public holiday, rather than rostering them on or expecting them to work the holiday.
An employer can only require an employee to work after requesting they do so, and either the request to work on the public holiday is reasonable or the employee’s refusal to work is unreasonable.
Taking leave on a public holiday
If an employee is on leave, e.g. annual leave, on the day a public holiday falls, they qualify to be paid their base rate for the hours they would have worked. The day is not deducted from their annual leave balance.
When a worker gets sick
Similarly, if an employee would normally work on a public holiday and they are sick or bereaved, they qualify to be paid their base rate for the hours they would have worked. The day is not deducted from their sick and carer's leave balance.
Working out of state
Public holidays entitlements are based on the state or territory where the employee is employed, not where they are working on the day of the holiday. So, if, for example, a Canberra-based employee is in NSW on Canberra Day, they are still entitled to take that day as a public holiday.
Substituting public holidays
Public holidays can be substituted for another day by agreement between the employer and employee. The ability to do this for award-covered employees will depend on the award. For award-free employees, public holidays can be substituted if both parties agree.
This can cause confusion whenever a public holiday falls on a Tuesday, Wednesday, or Thursday. For example, if ANZAC Day falls on a Tuesday, you could by agreement with employees move the public holiday to Monday, granting a long weekend. Employees would receive payment for Monday off work as the transferred public holiday and Tuesday is now a normal working day; they attend work and get paid normal time, with no alternative holiday.
This must be in writing and must be agreed. If your workplace cannot accommodate this transfer, you do not have to agree to an employee transfer request. Equally, you cannot force a transfer if the purpose of the transfer is to reduce entitlements.
Stand-down or qualifying periods
We sometimes get asked if there is a stand-down period or qualifying period before an employee receives a public holiday entitlement and the answer is no, there is no qualifying period.
Under the NES, employees are entitled to public holidays from their first day of work.
Restricted trading days
In all states, apart from the Australian Capital Territory and Northern Territory, there are some public holidays that are specified as restricted trading days, e.g. in NSW, Good Friday, Easter Sunday, Anzac Day (before 1pm), Christmas Day, and Boxing Day (outside the Sydney Trading Precinct) are restricted trading days.
On these days, almost all shops are required to be closed, except for those with exemptions due to the nature of their trade, e.g. petrol stations, chemists, hotels, bars, and certain small shops, or those that have applied for and been granted an exemption.
Check with your state or territory government on what public holidays are restricted trading days and whether you can trade.
As always, if you are confused or have a very specific and/or unusual public holiday scenario, then consult an expert. The team at MyHR is available to help you get this right.
