Would it be lawful to allow our employees to substitute a gazetted public holiday to observe a day of faith of their choice? For example, swapping Christmas Day (25 December) for Eid (~13 May), so they would work on Christmas Day but have a paid day’s leave on the day Eid is celebrated.
It is possible to agree with an employee to substitute a gazetted public holiday with another day.
If a modern award or enterprise agreement applies to the employee, you should check the exact wording of the entitlement there. For example, clause 27.2 of the Telecommunications Services Award 2020 provides that an individual employee may reach an agreement to substitute a day or part-day for a day or part-day that would otherwise be a public holiday.
It is also possible for an employer and an agreement/award-free employee to agree to substituting a public holiday for another day.
In circumstances where a public holiday is substituted for another day, that public holiday will be treated as an ordinary day of work, and generally, all public holiday entitlements (including penalty rates) will attach to the substituted day. So, the employee would be paid as per normal if they didn’t work on the substituted day, and paid their penalty rates if they work on the substituted day. Therefore, so long as the employee is paid their public holiday entitlement on their substituted day, it is not unlawful to allow the employee to work on that public holiday without paying them penalty rates.