Alert: Can employers require staff to work on a public holiday?

Many businesses need their workers to work on public holidays as part of their usual operations, for example businesses in the retail, hospitality, health, security and IT industries. Recently, the Full Court of the Federal Court of Australia issued a decision which has clarified the ability of employers to direct their staff to work on public holidays. The decision is relatively controversial and will have practical implications for many businesses.

The Case

In CFMEU v OS MCAP Pty Ltd [2023] FCAFC 51, OS MCAP Pty Ltd (the Company) had entered into employment contracts with its employees which expressly provided that the employees may be required to work on public holidays and that their remuneration had been set to compensate them for this requirement.

In August 2019, a number of employees submitted leave applications for Christmas Day and Boxing Day. This prompted a meeting with staff in which the Company told the employees that due to operational requirements it could only accommodate 6 employees for each roster being absent from work on Christmas Day and Boxing Day. If this number was exceeded, the Company could breach its contract with its major client which required services to be provided 24 hours a day, 365 days per year. The Company proceeded to roster the employees accordingly.

The CFMEU lodged an application with the Federal Court alleging that the Company had breached the National Employment Standards (NES), in particular section 114 of the Fair Work Act 2009 (FW Act). This section relevantly states as follows:

“(1) An employee is entitled to be absent from his or her employment on a day or part-day that is a public holiday in the place where the employee is based for work purposes.
(2) However, an employer may request an employee to work on a public holiday if the request is reasonable.
(3) If an employer requests an employee to work on a public holiday, the employee may refuse the request if the request is not reasonable or the refusal is reasonable.”

Section 114(4) provides that in determining whether a request, or a refusal of a request, to work on a public holiday is reasonable, specified factors must be taken into account, including but not limited to the nature of the employer’s business, the employee’s personal circumstances, and whether the employee could reasonably expect that the employer might request work on the public holiday.

At first instance, the Federal Court dismissed the CFMEU’s application. However, the CFMEU was successful on appeal. In particular, the Full Court of the Federal Court held that the Company had breached section 114 of the FW Act because it had effectively assumed that employees rostered to work on Christmas Day and Boxing Day would work, unless they applied for leave and it was granted. This was the wrong way around. Instead, the starting point is that employees are entitled not to work on public holidays. If an employer would like employees to work on a public holiday, it must make such a request provided it is reasonable. An employee may refuse such a request if the refusal is reasonable (having regard to the factors set out in section 114(4) of the FW Act).

Implications for employers

In light of the above, employers should not simply roster their employees to work on a public holiday and assume the employees will work that day unless they apply for leave. Instead, employers should expressly communicate with their employees to request that they work on a public holiday. If a particular employee indicates they refuse to work on the public holiday, the employer may then assess whether that refusal is reasonable. This process is likely to result in increased disputes with employees.

Given the right of employees to refuse requests to work on a public holiday if it is reasonable, employers that currently do not pay their employees any loadings or penalties for work on a public holiday (for example, because they pay an annualised salary), may need to reconsider those arrangements in order to incentivise employees to agree to work on public holidays.

Further, employers may wish to review their standard employment contracts to ensure they reflect the fact that employees may be reasonably requested to work on public holidays and may only refuse such a request if it is reasonable. An employee cannot agree in advance that they will be unilaterally required to work on a public holiday.

Employers who require employees to work on a public holiday, and who do not make a request in accordance with the NES, may be exposed to penalties of up to $82,500 per breach.