Another COVID Christmas and we are all hoping for a busy retail season. But as always managing public holidays is a pain point. In addition to managing promotional items, additional stock and ‘celebration’ items fuel wholesale and retailers are faces with the angst caused by when and what to pay staff. Operators are keen to ensure that they are “getting it right”, but it can be complicated. With Christmas Day falling on a Saturday and some States declaring and additional day and others declaring a replacement day it is important to understand that the Awards often have an additional element to add to a weekend Christmas public holiday that make it even more complicated. So now is the time to understand how the holiday season will work from a compliance perspective, then engage with your staff to determine who will work.
2021 Christmas Holidays – Saturday Silliness
In NSW, QLD, ACT, NT, WA – Christmas Day 25/12 is a public holiday and Boxing Day 26/12 is a public holidays, as are the additional days on 27/12 and 28/12
In TAS – Christmas Day 25/12 is a public holiday, as is the additional day on 27/12, but Boxing Day 26/12 IS NOT A PUBLIC HOLIDAY but the alternative day on 28/12 is a public holiday
In SA – Christmas Day 25/12 IS NOT A PUBLIC HOLIDAY….technically – but special rates do apply to some staff;
For Fuel Transport workers – as per clause 23.2.d, if Christmas Day falls on a Saturday or Sunday and another day is observed as a public holiday instead of Christmas Day (as is the case in SA) then an employee who works will be entitled to a minimum of 4 hours work and a loading of 50% on their normal days wage – https://www.fwc.gov.au/documents/documents/modern_awards/pdf/ma000038.pdf
The principle behind public holidays is that on a special occasion permanent staff are entitled to take a day to celebrate without their base income being effected.
This entitlement is available to permanent employees and is outlined in s115 of the Fair Work Act (FWA), which names some public holidays, and any other day or part day proscribed by a State or Territory law to be observed generally as a public holiday.
In addition to those provided for in the Act the Awards also stipulate the operation of public holidays;
Public Holiday Basics: Penalty Rates – a little extra to miss out on the celebration
Employers can ask an employee to work a public holiday when its reasonable, and employees can refuse to work a public holiday. However in most cases when they choose to work employees get a little extra payment for missing out on the celebrations.
As per the Awards these rates change depending on the nature of the employment.
Public Holiday Basics: “No thanks, I’ll take the day off” – and still get paid
An employee does not have to say yes to a request to work on a public holiday. The public holiday exists so that the employee can take the day and celebrate. For permanent staff, if they choose to do that then they are able to do it without loosing their normal pay or dipping into their annual leave. If a permanent employee choses to take the public holiday (which means that they are not working) then most Awards provide for base ordinary hours for that day to be paid at the base rate.
Under the FWA, a permanent employee who is absent on a day, or part-day, that is a designated public holiday is entitled to be paid at the base rate or “ordinary pay” for the “ordinary hours” for that day.
Ordinary Pay or Base Rate is the ordinary income, excluding incentive-based payments and bonuses, loadings, overtime or penalty rate, monetary allowances, and any separately identifiable amounts. Ordinary hours are the ordinary time hours that are allocated to that staff member on that day.
If the staff member does not usually work that day then their ordinary hours for that day are said to be zero.
Example: If a permanent employee usually does not work Saturdays, then the employees ordinary hours on a Saturday are zero, so if Saturday is a Public Holiday the employee can take the celebration of the Public Holiday without any change to their base pay. If on the other hand the permanent employee usually works 5 hours on a Saturday, then their ordinary hours on a Saturday are said to be 5 hours, so if Saturday is a Public Holiday then the employee can choose to take the celebration of the Public Holiday and not come into work and they will still receive payment in the amount of base rate for 5 hours.
Public Holiday Basics: Do casuals get paid if they are not working?
A casual is engaged and rostered “as needed” this is seen under the law to be a day by day arrangement. Casuals are offered work, and if they choose to take it they can, and if they choose not to they are under no obligation to.
Because of this distinction casual employees are not said to be “rostered on a public holiday” until they accept to work on that day. For this reason there is no payment to a casual who is not working on a public holiday.
Casuals who do work are entitled to be paid for their time, and different Awards will stipulate different penalty rates, minimum shift lengths etc.
Public Holiday Rates – Time worked PLUS
When a permanent employee works a public holiday they have to be paid for the public holiday PLUS paid a premium or penalty for working on what should have been a day off for them (or time in lieu where agreed).
When calculating and communicating pay rates to staff there can be some confusion.
It is important to review the Award, or employment instrument that the employee is engaged under to determine the rates and minimum hours to be offered.
ACAPMA members are reminded that ACAPMA can provide advice and support on the operation of public holidays in the industry, as well as resources on the calculation and application of public holiday rates.
What about Overtime?
Overtime, and overtime on a public holiday, are provided for in the Awards.
In one example – as per the VRSRA when a permanent employee works overtime on a public holiday they receive double time for all time worked.
For example; If the ordinary hours were $10 per hour, overtime would usually be $15 per hour. To work out overtime on the public holiday rate you need to simply take the ordinary base rate ($10) and times by 2 to get double time ($20). It is NOT necessary to start with the everyday overtime rate ($15) and then times by 2 ($30).
As per VRSRA when a casual employee works overtime on a public holiday they receive the public holiday rate PLUS the overtime rate.
For example; If a casual employee does overtime on a public holiday they receive the public holiday rate PLUS the overtime rate for their category of employment and their age, outlined in the pay tables.
Penalty Stacking? Weekends and Public Holiday rates. Do they combine?
The FWA does not outline standardised public holiday penalty rates. These are outlined in the Award. What the FWA and cases do outline is, that when two penalty rates could both apply at the same time, then the penalty that is most favourable to the staff member is the one that is used.
For example if the public holiday in question was a Saturday then the Saturday penalty and the Public Holiday penalty would be compared and the one that is higher is the one that is applied.
For example; If the ordinary pay was $10 per hour penalty rate for Saturday work was time and a half or $15 per hour, and the public holiday penalty was double time or $20 per hour. To work out the amount paid per hour you would start by first comparing the Saturday penalty and the Public Holiday penalty to establish which is the higher – then you would use that. It is NOT necessary to start with the Saturday rate of $15, then apply the public holiday penalty of double time, which would take it to $30 per hour.
It is important to note that certain Awards have differing penalties for different public holidays and for the treatment of public holidays that fall on a weekend, however these different provisions exist to ensure that it is clear that penalties do not “stack”.
What if an employee is on leave on a Public Holiday?
If a public holiday falls on a day that a permanent employee would usually have worked, and that employee is already on paid annual leave, long service leave, or personal or carers leave, then the ordinary hours for the public holiday should be credited back to the employee or the leave extended.
For example; Amy applied for 5 days annual leave, leaving her a balance in her leave entitlement of 20 days. As the business is on a monthly cycle she was then paid in advance for 5 days worth of ordinary hours (40). After the payment was made it was noted that a public holiday fell on the Monday of the leave period, and Amy usually works Mondays. In this case one day (8 hours) leave would be credited back to Amy taking her balance to 21 days. This crediting changes the 8 hours that were paid for that day from annual leave payment to public holiday payment.
The same process applies to personal and carers leave.
In terms of Long Service Leave, whether the leave will be extended based on a public holiday falling in the leave will depend on the State legislation. Credit back or extend leave in QLD, NSW, ACT, VIC, WA. DO NOT Credit back or extend leave in NT, SA, TAS.
If the payroll has not yet been processed then it is a simple matter of changing the allocations, rather than crediting back the leave. The point is that an employee does not miss out on that “paid day off to celebrate” even when they are on leave.
What if an employee is on Workers Compensation on a Public Holiday?
Whether an employee is entitled to be paid both the public holiday taken and the workers compensation amounts will depend on the State legislation that applies.
What if the site or business is shut down on a public holiday or has changed hours?
Many Awards provide for shutdown provisions to come into effect over the Christmas or Easter period.
During a close-down employees with annual leave entitlements will be paid their annual leave, whereas employees who have not accrued enough annual leave to cover the whole close-down period will be paid annual leave until their accrued entitlement is exhausted. The application of this clause within the Award comes with some specific conditions, and requires the business or workplace to stop trading. Seek further advice before implementing close-down provisions.
Managing Public Holidays Onsite
When managing any aspect of employment onsite it is important to plan ahead. With public holidays this is especial. With enough notice items like shut down, planned leave, switching days and staff availability can all be assessed and implemented where required.
It is also helpful to consider equality over the holiday periods, if there are a large number of staff that are casuals consider asking them if they are interested in working the public holiday several rosters in advance. If the response rate is high, look at scheduling shorter shifts, so that everyone has a go.
This article is general in nature and covers things to consider, implement and watch out for in your business. They are provided as general advice and you should seek further advice on your situation by calling 1300 160 270 and speaking to one of ACAPMA Employment Professionals its free for members. ACAPMA membership is affordable at only $810 per year for a single site and valuable with sites gaining HR advice support and representation as well as a raft of other benefits and discounts.