Important clarification of law about requiring employees to work on public holidays

Limelight Articles

Limelight 04/23

Important clarification of law about requiring employees to work on public holidays

Author, Joel Zyngier

In a decision which has significant implications for employers, the Full Federal Court of Australia recently clarified the law about whether employers can require employees to work on public holidays. This article discusses the case, what it means for employers and what employers need to do now.

Short read

In Construction, Forestry, Maritime, Mining and Energy Union v OS MCAP Pty Ltd [2023] FCAFC 51 (Public Holiday Case), the Full Court held an employer cannot require an employee to work on public holidays unless:

the employer has first requested the employee to work the public holiday
the employer’s request is reasonable, and
the employee does not have reasonable grounds to refuse the request.

If these conditions are not met, an employer that requires an employee to work a public holiday will contravene the National Employment Standards (NES) in the Fair Work Act 2009 (Cth) (FW Act). This is the case even if an employee’s employment agreement says the employee may be required to work a public holiday. Contravention of the NES exposes an employer to significant pecuniary penalties.

The facts of the Public Holiday Case

The Public Holiday Case related to whether an employer, OS MCAP (the Employer) contravened section 114 of the FW Act in requiring 85 employees (the Employees) to work on Christmas Day and Boxing Day in 2019.

The Employer employs production employees to operate mobile machinery which include shovels, excavators, loaders and trucks, for its mining clients. The Employer’s contract with its client required it to provide production services at the Daunia Mine 24 hours a day, 365 days a year. If Employees were rostered to work but did not work on Christmas Day or Boxing Day, the Employer would be at risk of not meeting its contractual obligations. This would create significant risks for the Employer under its contract with its client.

The Employees’ standard form contracts stated ‘you may be required to work on public holidays and payment for this expectation has been incorporated into your existing remuneration’. Their rosters set out all the shifts they would be required to work, including public holidays. This requirement was also conveyed to Employees during induction.

The Employees’ union, the Construction, Forestry, Maritime, Mining and Energy Union (CFMMEU) commenced proceedings against the Employer in the Federal Court of Australia, after it required the Employees to work the public holidays (without making a request to do so).

The Federal Court found in favour of the Employer, holding that an employer will not contravene section 114 of the FW Act if it imposes a reasonable requirement to work a public holiday. The Federal Court held that an employer does not need to first request employees to take leave, as ‘request’ is synonymous with a ‘requirement’.

The Full Court disagreed with the Federal Court’s decision. It held that a ‘request’ within the meaning of section 114(2) has its ordinary meaning. The Full Court stated:

‘An employer may make a request of employees in the form of a question, leaving the employee with a choice as to whether he or she will agree or refuse to work on the public holiday. Ultimately, after discussion or negotiation, the employer may require an employee to work on a public holiday if the request is reasonable and the employee’s refusal is unreasonable.’

What are the rules for working on public holidays?

Section 114 of the FW Act entitles an employee to be absent from his or her employment for a day or part day that is a public holiday, with pay (pursuant to section 116), if the day would otherwise have been a work day for the employee. Employers and employees cannot contract out of the NES or displace them with an enterprise agreement.

An employer can require employees to work on public holidays if it has made a request, that request is reasonable, and where an employee’s refusal is not reasonable (taking into account the factors in section 114(4), which we set out below).

For example, an employee’s refusal may not be reasonable if they are employed by an employer which is involved in critical services. Similarly, where it is desirable (although not critical) to remain open on public holidays, such as in hospitality, as long as the employer has met its obligations to make a reasonable request, an employee’s refusal may not be reasonable.

However, in each case, an employer must ensure it makes a reasonable request and allows for discussion, negotiation and a refusal.

If the employee refuses, the employer must then take into account the factors in section 114(4) when assessing the employee’s refusal. If the employee’s refusal is unreasonable, the employer can require the employee to work the public holiday. This would be a lawful and reasonable direction. An employee who fails to comply with a lawful and reasonable direction may be subjected to disciplinary action.

Section 114(4) of the FW Act sets out the factors an employer must take into account in determining whether a request, or a refusal of a request, to work on a public holiday is reasonable. The factors include: the nature of the employer’s workplace or enterprise (including its operational requirements), the nature of the work performed by the employee and their position, the employee’s personal circumstances, whether the employee could reasonably have expected to be required to work on the public holiday, whether the employee is paid additional amounts for the work or a level of remuneration that reflects an expectation of work on the public holiday, the amount of notice given by either party in making/refusing the request, and ‘any other relevant matter’.

What does this mean for employers?

The Full Court held there must first be a request, in its ordinary sense, where the employee knows they can refuse the request (if reasonable). The employee must know they have a choice. This signals to an employee they have a right to take a paid public holiday and to refuse a request. Making a ‘request’ provides an opportunity for refusal. The employer cannot give a unilateral command; there must be the capacity for discussion, negotiation and a refusal.

The Full Court confirmed an employer can have a roster which includes public holidays but must ensure that employees understand either:

the roster is in draft, requesting those employees who have been allocated to the holiday work that they indicate whether they accept or refuse that allocation, or
where a request is made before the roster is finalised.

The Full Court also confirmed a contract may contain a provision foreshadowing that the employees may be asked to work on public holidays and may be required where the request is reasonable and a refusal unreasonable.

What should employers do now?

Employers should ensure they do not:

require employees to work public holidays without first making a reasonable request
take unlawful adverse action against employees (e.g. warnings, demotion, dismissal or changing shifts or hours) for reasonable refusal to work a public holiday
require employees to work public holidays when their refusal is reasonable.

Employers should now review their rosters, induction material and employment agreements in light of the Full Court’s decision. The review should ensure the rosters, induction material and employment agreements:

give sufficient notice that employees may be requested to work on public holidays
do not purport to require employees to work on public holidays without the employer having made a reasonable request
allow for reasonable refusal to work public holidays, and
explain to employees the circumstances which must be taken into account in determining whether a request or refusal is reasonable.

Employers may wish to train managers and supervisors about allowing for discussion and negotiation about requests to work public holidays and dealing with refusals.

These matters and an employer’s expectations could also be dealt with in a suitable public holiday policy.

Please contact our Workplace Law team if you need assistance with drafting a public holiday policy, the reviews mentioned above or any other workplace relations and safety matter.

Joel Zyngier Principal , Melbourne Direct: +61 3 9611 8812 jzyngier@gclegal.com.au

This publication constitutes a summary of the information of the subject matter covered. This information is not intended to be nor should it be relied upon as legal or any other type of professional advice. For further information in relation to this subject matter please contact the author.