In various states and territories, state legislation identifies days as being public holidays in each year. There is also a mechanism to declare additional public holidays if certain holidays (e.g. Christmas Day) fall on a Saturday or Sunday, and substitute public holidays.

The Fair Work Act 2009 (Cth) (FW Act) establishes a national employment standard (NES) with respect to public holidays that operates in conjunction with state and territory public holidays legislation. This provides for:

• an entitlement for an employee to be absent from work on a public holiday, subject to the right of an employer to make a reasonable request for the employee to work on the public holiday, and
• an entitlement for an employee to be paid if absent from ordinary hours of work on a public holiday.

The NES renders the public holidays established by applicable state or territory legislation as public holidays for the purpose of the NES in the FW Act, including any additional public holidays and any substituted public holiday. State and territory public holiday legislation is not excluded by the FW Act.

An enterprise agreement must not exclude any provision of the NES. An enterprise agreement can include a provision for a substituted public holiday.

In Energy Australia Yallourn v CFMEU (2021), the Fair Work Commission (FWC) was required to interpret an enterprise agreement provision operating in Victoria, which provided that only day work employees would receive a substitute day off when a public holiday occurs on a weekend when a substitute day had been declared by the Minister under the public holidays legislation.

The FWC ruled the provisions operated such that a “substitute day off” in the first paragraph means a substitute day that is declared as such under the Victorian public holiday legislation. It did not give an entitlement to a substitute day off in respect of public holidays falling on weekends for which there may not be, or never will be, any alternative day declared by the Minister.

The Victorian Government has declared additional public holidays on Monday 27 December and Tuesday 28 December 2021, and 3 January 2022. This means that public holiday penalties will be required to be paid if any employee works on those days and are entitled to such penalties.

An enterprise agreement provision may provide for these days to be substitute public holidays and provide that for employees who work on both the actual holiday and the substitute holiday, only ordinary rates will be paid on the substitute holiday. However, this will contradict the NES, which in effect renders 27 and 28 December 2021, and 3 January 2022 as actual public holidays. This was the FWC’s ruling when interpreting Adelaide Casino’s enterprise agreement in 2016.