Is It Illegal to Work on a Public Holiday

Public holidays can be great for your customers and your team, but they can also be a headache for rosters, payroll, and compliance.

If you run a café, retail store, medical practice, trades business, or any business that operates seven days a week, you’ve probably asked (or been asked) whether it’s illegal to work on a public holiday.

In most cases, the answer is no - it’s generally not illegal to work on a public holiday in Australia. But that doesn’t mean you can treat public holidays like any other day.

As an employer, your real risk usually comes from:

getting penalty rates wrong,
asking an employee to work when they may have a reasonable basis to refuse,
not following your Award, enterprise agreement, or contract, and
not documenting your public holiday approach clearly.

Below, we’ll break down what small businesses and employers need to know so you can run your business confidently, avoid disputes, and stay compliant.

Is It Illegal To Work On A Public Holiday In Australia?

No - in Australia, it’s generally not illegal to work on a public holiday.

Many industries operate on public holidays as part of normal business (think: hospitality, healthcare, emergency services, transport, entertainment, and some retail).

What matters is how you arrange work on a public holiday, including whether:

the employee is required to work or can refuse,
you’re paying the correct public holiday entitlements (including penalty rates where applicable), and
your rostering and communication processes comply with your employee’s applicable workplace instrument (Award or enterprise agreement) and the Fair Work Act.

In other words, it’s usually not the act of working that causes legal issues - it’s non-compliance around pay and process.

What Counts As A Public Holiday (And Does It Differ By State)?

Public holidays are set by state and territory laws, so the list of public holidays (and even the name of the holiday) can vary depending on where your employee is based.

This matters a lot for small businesses with:

teams working across different states or territories,
employees working from home interstate, or
multiple locations.

National Public Holidays vs State/Territory Holidays

Some holidays are observed across Australia (for example, Christmas Day), while others are location-specific (for example, a regional show day, Melbourne Cup Day in parts of Victoria, or Labour Day on different dates depending on the state).

As an employer, it’s a good idea to confirm:

the employee’s usual work location for public holiday purposes, and
whether the holiday is gazetted (officially recognised) in that state/territory or region.

Substituted Public Holidays

If a public holiday falls on a weekend, there may be a substituted public holiday on a weekday. That can affect whether you owe public holiday penalty rates, whether someone is entitled to be absent, and how you roster.

Because the practical rules can depend on the Award or agreement that covers your workplace, it’s worth taking a cautious approach whenever you see public holidays “moved” or substituted.

Can You Require Employees To Work On A Public Holiday?

This is where many small businesses get caught out.

Under the Fair Work framework, an eligible employee can generally be absent on a public holiday. However, an employer can request an employee to work on a public holiday if the request is reasonable, and the employee can refuse if the refusal is reasonable.

What is “reasonable” depends on the circumstances.

When A Request To Work Might Be Reasonable

Some common factors that can make a public holiday work request more likely to be reasonable include:

the nature of your business (for example, a venue that normally trades on public holidays),
the employee’s role and seniority,
whether you gave enough notice,
whether you are offering the correct penalty rates or another entitlement permitted by the applicable Award/enterprise agreement,
the employee’s personal circumstances (family responsibilities, religious observance, etc.), and
how much your business would be impacted if the employee did not work.

When An Employee’s Refusal Might Be Reasonable

Likewise, refusal may be reasonable if, for example:

the employee has caring obligations and insufficient notice was given,
the employee has already worked excessive hours,
there are health and safety concerns, or
the request is inconsistent with the Award/enterprise agreement or established workplace arrangements.

One of the best ways to reduce disputes is to set expectations early and document them clearly in your rostering and employment documents, including an Employment Contract that reflects how your business operates.

What About Casual Employees?

Casual employment adds another layer.

Casual employees are usually offered shifts as needed, and whether they can decline a shift (and what notice is required) often depends on the applicable Award or enterprise agreement, as well as any agreed rostering arrangements. Your Award, enterprise agreement, and workplace policies can set rules around:

offer and acceptance of shifts,
minimum engagement periods,
notice of rosters or roster changes, and
public holiday pay rates.

If your business regularly relies on casuals for public holiday trade, it’s worth putting a clear shift management approach in place, including a compliant shift cancellation policy and clear rostering practices.

Do You Have To Pay Penalty Rates On Public Holidays?

Often, yes - but it depends on what covers your employee.

Public holiday pay is one of the most common compliance issues for small businesses because there are multiple potential sources of rules, including:

Modern Awards,
enterprise agreements, and
employment contracts (although contracts cannot undercut minimum entitlements).

Two Common Scenarios Employers Need To Handle

Employee does not work on the public holiday: eligible employees are typically entitled to be paid their base rate for ordinary hours they would have worked.
Employee works on the public holiday: the employee may be entitled to public holiday penalty rates (often higher than ordinary rates) and/or other entitlements depending on the applicable Award or agreement.

Because penalty rates can vary significantly by industry and classification level, you should confirm the correct rate based on the employee’s Award coverage and their role.

Can You Offer Time Off Instead Of Penalty Rates?

In some workplaces, an employee might be able to take time off instead of being paid the full penalty amount (for example, time off in lieu or a substituted arrangement). Whether that’s allowed - and the steps you must follow (including any written agreement requirements) - depends on the applicable Award or enterprise agreement.

If you want flexibility here, it’s important to set this up carefully rather than informally. A quick “we’ll give you a day off later” can create payroll disputes later if it isn’t permitted or properly documented.

Does Payment In Lieu Apply To Public Holidays?

Be careful not to confuse public holiday entitlements with other pay concepts, such as payment in lieu of notice (which relates to ending employment and notice periods, not public holiday work).

If you’re ever “rolling up” extra amounts into a flat rate, you need to ensure your arrangements still meet minimum entitlements and are properly recorded.

What If Your Business Wants To Close On A Public Holiday?

Closing on a public holiday can be a smart commercial decision - especially if trade is slow and penalty rates would make trading unprofitable.

However, from a legal perspective, you still need to consider:

whether employees are entitled to be paid for the public holiday,
whether you can direct employees to take annual leave, and
what your Award or agreement says about shutdowns.

Paying Employees When You’re Closed

If a permanent employee would ordinarily have worked that day and the day is a public holiday, they are generally entitled to be paid for those ordinary hours even if your business is closed.

This is why it’s important not to treat a public holiday like a “free day off” that automatically reduces payroll costs.

Directing Annual Leave (Or A Shutdown Period)

Many businesses manage costs by requiring staff to take annual leave around public holiday periods (for example, Christmas/New Year shutdowns). Whether you can do that depends on your workplace instrument and the reasonableness of the direction.

You’ll also need to handle final pay correctly if someone resigns before a shutdown period - for example, rules around annual leave on resignation can become relevant if employment ends close to public holiday periods.

Common Compliance Risks For Employers On Public Holidays

Even though it’s generally not illegal to work on a public holiday, you still need to manage legal risk properly.

Here are the main issues we see for small businesses.

1. Underpaying Public Holiday Rates

Underpayments can happen unintentionally - especially if:

you’re applying the wrong Award,
the employee’s classification level is incorrect,
your payroll system isn’t configured correctly, or
you’re using a flat hourly rate without verifying it satisfies Award minimums.

It’s worth auditing your pay setup before peak public holiday periods.

2. Misunderstanding “Reasonable Refusal” Rules

Public holiday staffing can be stressful, but pressuring employees to work (or threatening negative consequences) can create risk.

A better approach is to:

give notice early,
ask for volunteers first where possible,
apply consistent rules across your team, and
document the process.

3. Poor Rostering And Last-Minute Changes

Rosters often change quickly around public holidays.

If you’re changing shifts, cancelling shifts, or moving people between locations, check your Award conditions and any internal workplace policies about notice periods and cancellations. This becomes especially important where you regularly adjust schedules on short notice, such as in retail and hospitality.

4. Not Having Clear Documents And Policies

A lot of public holiday disputes come down to unclear expectations.

From an employer’s perspective, the goal is not to “lawyer up” your workplace - it’s to create clarity so you can operate smoothly and fairly.

Depending on your business, that might include:

Employment Contract: setting out hours, flexibility requirements, and key conditions for the role (especially for businesses that trade on weekends and public holidays). An Employment Contract is often the starting point.
Workplace policies: covering rosters, shift changes, attendance expectations, and any relevant conduct rules.
Time off and leave processes: so employees understand how to request leave around high-demand public holiday periods.

5. Record Keeping Problems

Public holiday issues can escalate when timesheets, payslips, or approvals are messy.

Good record keeping helps you:

prove what hours were worked,
show how the employee was paid,
respond quickly if there’s a complaint, and
identify payroll errors early.

If your workplace uses surveillance or recording tools to manage operations (for example, call recordings or CCTV), remember that privacy and surveillance laws can apply. If that’s relevant to your workplace setup, having a compliant approach to CCTV laws in Australia can help reduce risk.

Key Takeaways

It is generally not illegal to work on a public holiday in Australia, but employers must follow the Fair Work rules, Awards/agreements, and correct pay entitlements.
You can often request employees to work on a public holiday, but whether the request (or refusal) is reasonable depends on the circumstances.
Public holiday pay and penalty rates depend on the employee’s Award/enterprise agreement and classification, so it’s crucial to verify pay settings before rostering staff.
If you close on a public holiday, eligible employees may still be entitled to be paid for ordinary hours they would have worked.
Clear rostering processes, reliable record keeping, and well-drafted employment documentation reduce the chance of disputes and underpayment claims.
If you regularly trade on public holidays (or rely on casual staff), having the right documents and workplace settings in place helps you stay compliant and protect your business.

If you’d like help setting up a compliant approach to public holiday staffing, employment contracts, and workplace policies, you can reach us at 1800 730 617 or team@sprintlaw.com.au for a free, no-obligations chat.

Is It Illegal to Work on a Public Holiday in Australia?