Working on Public Holidays in Australia: Penalty Rates and Rules

Public holidays in Australia are more than just days off — they come with a complex web of rules around penalty rates, the right to refuse work, and substitute day arrangements. For employers who need staff working on public holidays, getting these rules wrong can result in significant underpayment claims and Fair Work compliance issues.

This guide covers the key rules Australian employers need to understand when requiring or requesting employees to work on public holidays, including penalty rates under major modern awards, the right to refuse, and how substitute days work.

Disclaimer: This article is for informational purposes only and does not constitute legal advice. Consult an employment lawyer for guidance specific to your organisation.

Australia’s National Public Holidays

Under the Fair Work Act 2009, there are eight national public holidays that apply across all states and territories:

• New Year’s Day (1 January)
• Australia Day (26 January)
• Good Friday
• Easter Saturday
• Easter Monday
• Anzac Day (25 April)
• Queen’s Birthday (date varies by state/territory)
• Christmas Day (25 December)
• Boxing Day (26 December)

In addition, each state and territory has its own additional public holidays — such as Melbourne Cup Day in metropolitan Melbourne, Reconciliation Day in the ACT, or Royal Queensland Show (Ekka) in Brisbane.

Employers must be aware of both national and state/territory-specific holidays that apply to their workforce, particularly if they have employees across multiple jurisdictions.

The Right to Be Absent on a Public Holiday

Under section 114 of the Fair Work Act, all employees (including part-time and casual employees) are entitled to be absent from work on a public holiday. This is a default right — the employee does not need to request the day off.

For full-time and part-time employees who would ordinarily work on the day the public holiday falls, this is a paid day off at their base rate of pay.

When a Public Holiday Falls on a Non-Working Day

If a public holiday falls on a day an employee does not ordinarily work, they generally have no entitlement to a paid day off or an alternative day off, unless their award or enterprise agreement provides otherwise.

However, many modern awards include substitute day provisions that can shift the public holiday to another day. More on this below.

Can Employers Require Employees to Work on Public Holidays?

Yes, but only if the request is reasonable. Under the Fair Work Act, an employer can request an employee to work on a public holiday, and the employee can refuse if the request is not reasonable, or if the refusal is reasonable.

What Makes a Request Reasonable?

The Fair Work Act sets out several factors to consider when determining whether a request (or refusal) is reasonable:

• The nature of the employer’s business — Is the business one that typically operates on public holidays (e.g., hospitality, healthcare, retail, emergency services)?
• The type of work the employee performs — Is their role essential to public holiday operations?
• The employee’s personal circumstances — Do they have family or caring responsibilities, cultural or religious reasons for wanting the day off?
• Whether the employee is entitled to penalty rates or other compensation — Higher compensation generally makes the request more reasonable
• The amount of notice given — Was the employee given reasonable advance notice?
• Whether the employee could reasonably expect to be required to work — Is it a standard expectation in their industry or role?

The Employee’s Right to Refuse

An employee can refuse to work on a public holiday if the refusal is reasonable. The same factors listed above apply. In practice, employees in industries that routinely operate on public holidays (such as hospitality and healthcare) will generally find it harder to demonstrate a reasonable refusal.

However, even in these industries, individual circumstances matter. An employee who was not given adequate notice, or who has compelling personal reasons, may still have a reasonable basis to refuse.

Penalty Rates for Working on Public Holidays

Penalty rates for public holiday work are set by modern awards and enterprise agreements, not directly by the Fair Work Act. The rates vary significantly across industries.

Major Award Penalty Rates

Here are the public holiday penalty rates under some of the most common modern awards:

General Retail Industry Award 2020

• Full-time and part-time: 225% of the ordinary hourly rate
• Casual: 250% of the ordinary hourly rate

Hospitality Industry (General) Award 2020

• Full-time and part-time: 225% of the ordinary hourly rate
• Casual: 250% of the ordinary hourly rate

Clerks — Private Sector Award 2020

• Full-time and part-time: 250% of the ordinary hourly rate
• Casual: 275% of the ordinary hourly rate

Health Professionals and Support Services Award 2020

• Full-time and part-time: 250% of the ordinary hourly rate
• Casual: 250% of the ordinary hourly rate (inclusive of casual loading)

Building and Construction General On-site Award 2020

• Full-time and part-time: 250% of the ordinary hourly rate
• Casual: 275% of the ordinary hourly rate

Manufacturing and Associated Industries and Occupations Award 2020

• Full-time and part-time: 250% of the ordinary hourly rate
• Casual: 275% of the ordinary hourly rate

Important Notes on Penalty Rates

• Casual penalty rates are typically higher because they include the casual loading (usually 25%) on top of the public holiday penalty
• Some awards specify that the penalty rate is calculated on the base rate, not the rate inclusive of allowances
• Enterprise agreements may set different rates — always check the applicable agreement first
• If an employee is covered by a modern award, the award rates are the minimum. You can pay more, but never less

Overtime on Public Holidays

If an employee works overtime on a public holiday (i.e., hours beyond their ordinary hours), the applicable rate depends on the award or agreement.

In many awards, the public holiday rate applies to all hours worked on the public holiday, including overtime hours. However, some awards have a separate overtime rate for public holidays that is higher than the standard public holiday penalty.

For example, under the Clerks — Private Sector Award, overtime on a public holiday is paid at 250% for all hours — the same rate as ordinary public holiday work. But under some manufacturing awards, overtime on a public holiday may attract a rate of 300%.

Employers should check their specific award carefully to determine whether a different rate applies to overtime hours on public holidays.

Substitute Days

Substitute day arrangements allow an employer and employee (or the employer and a majority of affected employees) to agree to substitute another day for a public holiday.

How Substitute Days Work

Under the Fair Work Act, an employer and employee can agree in writing to substitute a public holiday for another day. When this happens:

• The substitute day becomes the public holiday for that employee
• The original public holiday is treated as a normal working day
• Penalty rates apply to the substitute day, not the original day

This is commonly used around Christmas and New Year, when businesses may want to close on a specific day that is not technically a public holiday, or when a public holiday falls on a weekend.

Award-Specific Substitute Day Provisions

Many modern awards include specific provisions for substitute days. For example, if Christmas Day falls on a Saturday, some awards automatically substitute the following Monday as the public holiday. Employers must check their applicable award to determine whether automatic substitution applies.

State and Territory Substitution

State and territory governments often declare substitute public holidays when a public holiday falls on a weekend. For example, if Boxing Day falls on a Sunday, the following Monday is typically declared the public holiday. These government-declared substitutions apply automatically.

Part-Time and Casual Employees on Public Holidays

Part-Time Employees

Part-time employees are only entitled to a paid day off for a public holiday if the holiday falls on a day they would ordinarily work. If a public holiday falls on their non-working day, they generally have no entitlement.

However, if a part-time employee is requested to work on a public holiday (whether or not it is one of their ordinary days), they are entitled to the applicable penalty rate.

Casual Employees

Casual employees have the right to be absent on a public holiday without penalty. They do not receive payment for the public holiday unless they actually work. If they do work, they are entitled to the casual public holiday penalty rate under their applicable award.

Record-Keeping Obligations

Employers must keep accurate records of all hours worked on public holidays, including:

• The date of the public holiday
• The hours worked by each employee
• The rate of pay applied (including penalty rates)
• Any substitute day arrangements

These records must be kept for seven years and made available to the Fair Work Ombudsman on request. Failure to keep adequate records can result in penalties and adverse inferences in underpayment claims.

Practical Tips for Employers

1. Know Your Award

The penalty rates and rules vary significantly between awards. Identify which modern award (or enterprise agreement) covers each of your employees and ensure you are applying the correct rates.

2. Give Adequate Notice

If you need employees to work on a public holiday, provide as much notice as possible. Rosters should be published well in advance, and any changes should be communicated promptly. Adequate notice makes the request more reasonable.

3. Consider Employee Preferences

Where possible, ask for volunteers before directing employees to work on public holidays. Employees who choose to work are less likely to raise disputes, and this approach builds goodwill.

4. Automate Penalty Rate Calculations

Manual payroll calculations for public holidays are error-prone. Use payroll or leave management software that automatically applies the correct penalty rates based on the employee’s award, employment type, and hours worked.

5. Track State and Territory Holidays

If your workforce spans multiple states or territories, maintain a calendar of all applicable public holidays. An employee in Victoria may have different public holidays than one in Queensland, and the penalty rates must be applied accordingly.

6. Document Substitute Day Agreements

If you use substitute day arrangements, ensure they are documented in writing and signed by the affected employees. Keep these records for at least seven years.

Key Takeaways

• Employees have a default right to be absent on public holidays — employers can only request (not demand) that they work
• Employees can refuse to work on a public holiday if the refusal is reasonable
• Penalty rates for public holiday work are set by modern awards and enterprise agreements, typically ranging from 225% to 275% of the ordinary hourly rate
• Substitute days can be arranged by agreement, shifting the public holiday to another day
• Part-time employees are only entitled to a paid public holiday if it falls on their ordinary working day
• Employers must keep records of public holiday work for seven years

Public holidays represent a significant cost for businesses that operate on these days. Understanding the rules — and applying them consistently — protects your organisation from underpayment claims and helps maintain positive employee relations.

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