How public holidays work and annual leave rules explained

Public holidays can change rosters, pay and leave balances across Australia, but entitlements are not uniform for every worker. The rules depend on employment type, awards and enterprise agreements, and whether a person would ordinarily work on the day a public holiday falls.

For employers, public holidays can lift wage costs and require careful rostering, particularly in sectors that operate seven days a week. For employees, the biggest questions tend to centre on whether they are entitled to be off work, whether they can be asked to work, and how annual leave interacts with a public holiday that sits inside a period of booked leave.

Public holidays in Australia: what they are and why they matter

Australia’s public holidays are set through a combination of national and state or territory arrangements. A small number are observed nationwide, while many are determined locally and can vary by jurisdiction, including substitute days when a holiday falls on a weekend. That variation can create differences for businesses that operate across multiple states or territories.

In workplaces, the practical impact is determined by the National Employment Standards (NES) in the Fair Work Act and any applicable industrial instrument. Awards and enterprise agreements can provide additional conditions, including penalty rates, minimum call-in arrangements, or specific rostering rules for work performed on public holidays.

Whether a public holiday is paid time off is tied to an employee’s “base rate of pay” and their ordinary hours. Full-time and part-time employees who would ordinarily work on the day are generally paid for those ordinary hours if they do not work because it is a public holiday. Casual employees are generally not paid for a public holiday unless they work, although some agreements may provide different outcomes.

Can an employer require work on a public holiday?

Australian workplace law allows an employer to request that an employee work on a public holiday in some circumstances, and it also gives employees a right to refuse a request that is not reasonable. The assessment of reasonableness is fact-specific and can depend on operational requirements, the nature of the work, the employee’s role, and notice given.

Employee circumstances are also relevant, including family responsibilities, religious observance, and personal commitments. A refusal may be considered reasonable where the request is unreasonable, or where the refusal is based on legitimate grounds. Conversely, in industries with continuous operations—such as health care, hospitality, transport and utilities—working on a public holiday can be a common expectation, subject to applicable pay conditions.

Many workers who do work on a public holiday receive higher rates of pay under awards or agreements. Where higher rates do not apply, other forms of compensation may exist under an enterprise agreement, such as time off in lieu. The specific entitlement is determined by the instrument covering the employee and the employer’s policy settings, provided they meet minimum legal requirements.

How annual leave interacts with public holidays

A common point of confusion is what happens when a public holiday falls during a period of approved annual leave. In general, where a public holiday occurs during a time when an employee is on annual leave, that public holiday is not counted as annual leave. Instead, it is treated as a public holiday, and the employee’s annual leave balance should not be reduced for that day.

This distinction matters for both payroll and workforce planning. Employees can preserve annual leave for days that are not public holidays, while employers need to ensure leave systems correctly separate public holidays from leave deductions. Mistakes can trigger underpayment risks, especially for businesses with large workforces or multiple pay cycles around holiday periods.

Another scenario arises when an employee books annual leave adjacent to a public holiday to create a longer break. That arrangement is generally permissible, but the employer’s ability to approve or refuse leave can depend on operational needs and the terms of any award or agreement. Annual leave is a National Employment Standards entitlement, but its timing is typically managed through consultation and workplace processes.

Key implications for different types of workers

Entitlements can differ across full-time, part-time and casual employment. For full-time employees, public holidays that fall on a normal working day are typically paid as ordinary hours when not worked. For part-time employees, the key question is whether the public holiday falls on a day they are regularly rostered to work; if it does, payment is generally due for those ordinary hours if they do not work.

Casual workers are usually not paid for a public holiday they do not work, reflecting the casual loading structure. However, a casual who works on the day may be entitled to penalty rates under an award or agreement. Disputes can arise where work patterns are regular and predictable but the worker remains casual; in those cases, the industrial instrument and the worker’s status become important.

Shift workers and employees on rotating rosters can face additional complexity. In some workplaces, rosters are set weeks ahead, and the question becomes whether the employee would have worked the day if it were not a public holiday. For employees with variable hours, employers often rely on award rules, enterprise agreement clauses, and established roster patterns to determine entitlements.

Compliance risks and business planning considerations

For employers, public holidays create two main compliance pressure points: correct payment and correct leave accounting. Penalty rates, loadings and minimum shift lengths can significantly change labour costs, particularly in retail, hospitality and essential services. Payroll errors can occur when systems are not configured to handle state-by-state holidays, substituted days, or employees working across locations.

Workforce planning also becomes more difficult around clustered holiday periods, when leave requests rise and customer demand can either spike or drop depending on the industry. Some businesses manage this through roster changes, voluntary expressions of interest for public holiday shifts, or time-off-in-lieu arrangements where permitted. Others limit leave approvals for peak operational periods, subject to consultation obligations and fairness requirements.

Common areas that can require extra attention include:

• Multi-state employers managing different public holiday calendars and substitute days
• 24/7 operations where staffing levels must be maintained on public holidays
• Award-covered workplaces with complex penalty rate structures
• Businesses relying on casual labour during peak trading periods
• Payroll teams reconciling public holidays that occur during annual leave blocks

In disputes, documentation often matters. Rosters, written requests to work, records of refusals and reasons, and payroll calculations can be relevant to resolving disagreements internally or through external processes. Employers and employees commonly refer to the Fair Work Ombudsman’s guidance, and some matters may turn on interpretation of awards or enterprise agreements.

What employees and employers should check

The baseline legal framework is the National Employment Standards, but the detail often sits in the award or enterprise agreement and the workplace’s established roster patterns. Employees may also have individual flexibility arrangements that alter some conditions, within limits. For employers, aligning contracts, policies and payroll settings with the correct industrial instrument is central to avoiding inadvertent underpayments.

Where uncertainty exists—such as whether a request to work on a public holiday is reasonable, how a substituted public holiday applies, or how a rostered day off interacts with a holiday—workplaces often seek clarification through HR, payroll, unions or employer groups. Clear communication ahead of holiday periods can reduce disputes over expected attendance and pay.

Disclaimer: This article provides general information on Australian public holidays and annual leave entitlements and does not constitute legal advice. Conditions can vary by award, enterprise agreement and individual circumstances.