Every year, 26 January prompts widespread debate. This year was certainly no different. In response to increasing public sentiment that Australia Day is not a day of celebration, many employers offered employees the option to work on the public holiday and instead take a day off on an alternate date.

Some employers are taking a similar approach to all public holidays to provide employees with greater flexibility. This move also enables staff to take days off for cultural or religious events that are not recognised public holidays in Australia without taking days out of their annual leave.

However, industrial laws are making these changes more difficult to implement for some employers. This is because 26 January is recognised by states and territories as a public holiday with an employee entitlement to take the day off without a loss of pay, and the Fair Work Act 2009 (Cth) reinforces this entitlement in the National Employment Standard (NES).

The NES additionally provides that an employer may request an employee to work on a particular public holiday. The employee may refuse the request (and take the day off) if the employee has reasonable grounds for doing so. For example, it might be reasonable to require your employees to work on 26 January if the employees:

• were given notice before they accepted employment of your expectation for them to work on that day;
• are paid public holiday penalty rates (even if they don’t have an entitlement to such penalties under any applicable award or agreement);
• are offered another substitute day off; or
• who cannot work the day for personal reasons can seek to be exempted.

In the case of an award-covered employee, employers can agree with employees to take a substituted day off for 26 January provided there is a term in the award that permits this. A substitution clause exists under the Hospitality Industry (General) Award 2020, the Clerks—Private Sector Award 2020, the Professional Employees Award 2020, the Manufacturing and Associated Industries and Occupations Award 2020 and the General Retail Industry Award 2020.

Similarly, if the employee is subject to an enterprise agreement providing for substitution, the employer may allow the employee to take off an alternate day to 26 January.

The NES also provides for such agreements to be reached with employees who are not covered by an award or enterprise agreement. However, you cannot eliminate the public holiday and replace it with an additional day of annual leave, as this would contravene the NES.

What should you do?

If you want to provide employees with greater flexibility regarding whether they work on 26 January, or other public holidays, take the following steps:

1. Check if your employees are covered by an award or enterprise agreement that allows for substitution.
2. If so, apply that clause.
3. If an award or agreement applies, but there is no provision for substitution, consider making substitution by agreement an option available to your employees.
4. If your employees are not covered by an award or agreement, make a written agreement providing for substitution. This could be included in, or added to, the employment contract.