Australian workers are redefining public holidays – and HR needs to catch up

Australian employees are increasingly choosing to work on public holidays, trading what used to be “sacred time” for “negotiated time” as cost-of-living pressures, cultural diversity and flexible work reshape how people value time off. For HR leaders, this shift is no longer a fringe behaviour; it is a sign that traditional approaches to leave are out of step with how people live and work in 2026.

New research from Indeed, combined with insights from workplace expert Lauren Anderson and workplace psychologist Amanda Gordon, suggests that public holiday and leave policies should be treated as a strategic lever for employer brand, inclusion and wellbeing, not just a compliance requirement.

Why more employees are choosing to work on public holidays

Indeed’s survey found that 70% of Australian workers are in favour of being able to swap a public holiday for a different day of their choosing. For some, this is driven by the opportunity to earn extra money; for others, it reflects a desire to align time off with personal values, beliefs or culturally significant days, or simply to choose another day that fits better with family or life commitments.

Anderson notes that cost-of-living pressures are a major driver of this behaviour right now. With rising interest rates and fuel prices, penalty rates have become an attractive mechanism for many workers who are trying to make ends meet. For employees who do not celebrate Easter, working across the Easter break can feel pragmatic rather than sacrificial, particularly when it allows them to forfeit a day that is not personally significant and instead earn additional income.

The research also shows that flexibility around public holidays is already emerging in practice. Australia Day is currently the most common public holiday on which workers have flexible options, but it is not the only one. A notable share of workers report having the option to work on Christmas Day, Easter Monday and Good Friday, signalling that the traditional “everyone stops” model is steadily eroding.

From Gordon’s perspective, this trend is not only economic but cultural and psychological. She describes the change as a move from “sacred time” to “negotiated time”. Public holidays, once assumed to have shared meaning across the workforce, no longer carry the same universal significance in a diverse society. Employees are increasingly prioritising personal relevance over prescribed breaks: cultural or religious festivals, specific family milestones, or other personally meaningful days are starting to matter more than nationally fixed dates.

Hybrid and flexible work arrangements have further blurred the boundaries between work and non-work. When people already have significant autonomy over when and where they work, a public holiday may feel less distinct. Many employees now prefer to work when the workplace is quieter and to take leave at a time that genuinely suits their lives, rather than when the national calendar dictates.

From one-size-fits-all rules to choice with structure

For HR leaders, the rise in employees working on public holidays should not be interpreted as an invitation to encourage more hours. Instead, it is an opportunity to redesign leave and public holiday settings around choice, clarity and fairness.

Anderson argues that public holiday policies should be seen as an extension of an organisation’s employee value proposition and core values, rather than as isolated HR rules. If a business positions itself as flexible, inclusive and people-centred, then rigid, one-size-fits-all public holiday settings can quickly undermine that promise.

Clarity is critical. Employees need to understand whether public holidays in the organisation are treated as fixed, optional or flexible; whether there is scope to substitute one day for another; and what the approval process looks like in practice. Ambiguity on these points risks confusion, perceived unfairness and inconsistent manager decisions across teams.

At the same time, both experts are clear that flexibility does not mean a free-for-all. Gordon recommends that organisations move from a narrow compliance mindset to a “choice framework”, but one that is underpinned by explicit guardrails. That includes spelling out that there is no expectation or pressure to work on public holidays, ensuring that opting out is framed as just as acceptable as opting in, and defining the service or coverage requirements that must still be met.

Leadership behaviour becomes a powerful signal here. If senior leaders and managers consistently work on public holidays, employees may infer that this is the real norm, regardless of what policies or HR communications say. Gordon stresses that managers need to model healthy boundaries and make it visible that taking public holidays – or swapping them for other days that matter – is legitimate and safe.

Monitoring is another essential element of structure. Organisations should track who is working and who is taking time off across key dates to ensure the same people are not always carrying the load or, conversely, always securing the most desirable arrangements. Without this data and visibility, well-intentioned flexibility can quickly turn into hidden inequity.

Flexible leave in 2026: expectation, not differentiator

Anderson is blunt about the market reality: flexibility is no longer a differentiator, it is assumed. In Indeed’s research, when job seekers were asked what would make them say yes to a new role instantly, the second most popular response, after a significantly higher salary, was a highly flexible work arrangement. This encompassed flexible hours, remote work options and similar forms of autonomy, and 56% of job seekers selected it.

In this environment, flexible leave and public holiday policies are becoming a core component of attraction and retention. They offer a tangible expression of an organisation’s values and of how seriously it takes work–life integration, rather than merely paying lip service to it. Candidates and employees alike increasingly look beyond headline statements and into the fine print of how time is managed.

Gordon adds that flexible leave sits at the intersection of inclusion and mental health. Workforces are now far more diverse across culture, religion, family structure and life stage, which means standardised leave models built around a narrow set of assumptions are an increasingly poor fit. Employees who feel that their lives and commitments are recognised and accommodated are more likely to be engaged, loyal and willing to go the extra mile when needed.

She also connects flexible leave to psychological safety and wellbeing. Amid elevated burnout risks and ongoing social and economic stressors, having genuine control over when to take time off can be a critical protective factor for mental health. When people can use leave for days and events that truly matter to them – rather than simply following a calendar set decades ago – they are more likely to feel restored and supported.

Should employers implement flexible leave – and what should HR watch for?

Both Anderson and Gordon are clear that employers should implement flexible leave policies where operationally feasible, but need to do so thoughtfully.

Anderson points out that Australian workers are increasingly vocal in calling for workplaces to move beyond a one-size-fits-all approach to public holidays. The traditional model no longer reflects the diverse needs and identities of the modern workforce. Flexible leave allows people to align work with their lives and values, a shift that mirrors wider cultural changes rather than a passing HR fashion.

From the employer’s perspective, flexible leave can strengthen the employer brand and make the organisation more attractive in a tight talent market. It signals trust, maturity and respect, which can boost engagement and retention. When employees feel they have meaningful autonomy over their time, they are more likely to respond with commitment and discretionary effort.

At the same time, Anderson emphasises that flexibility must rest on clear, consistently applied guidelines. Without structure, organisations risk perceptions of favouritism between teams or demographic groups, inconsistent manager responses and confusion over entitlements.

Gordon reinforces the positive case – higher engagement, stronger retention, a fairer experience across different cultures and life stages, and lower burnout risk – but is equally clear-eyed about the risks. Poorly designed policies may deepen inequity if some roles, locations or demographic groups can access flexibility more easily than others. They may also inadvertently fuel an “always-on” culture if employees feel subtly compelled to work on days that used to be considered inviolable.

She suggests that a pragmatic starting point for many organisations is to allow substitution of public holidays within defined parameters. For example, employees might be able to work on a national holiday that is less meaningful to them and take another day later in the year that better fits their cultural or family needs. The key is to surround this with transparent, well-communicated systems for requesting, approving and tracking leave, so both fairness and business continuity are maintained.

What this means for HR leaders now

For HR and people leaders, the shifting approach to public holidays is a barometer of a broader transformation in the employment relationship. Time off is no longer simply a matter of statutory calendars and standard entitlements; it is becoming a personalised, values-driven dimension of the employee experience.

In practice, this means stress-testing existing policies against your employee value proposition, diversity and inclusion commitments, and mental health strategy. It means engaging with your workforce to understand which forms of leave flexibility would be most meaningful, which public holidays are least and most important to different groups, and where the operational constraints truly lie.

It also requires equipping managers with the skills and guidance to handle requests consistently, to role model healthy boundaries and to have nuanced conversations about fairness and coverage. Policy on paper is not enough; day-to-day practice is what shapes culture and reputation.

Finally, HR teams should be prepared to monitor the impacts of flexible leave over time. This includes tracking uptake across different demographic groups and business units, watching for signs of “always-on” creep, and connecting leave patterns with engagement, performance and wellbeing data.

In a labour market where salary and flexibility are the top levers for candidates, and where employees are increasingly defining for themselves what meaningful time off looks like, organisations that embrace flexible, well-governed leave will be better positioned to attract, retain and sustain their people. Public holiday policy may once have been an administrative afterthought, but in 2026 it is emerging as a quiet but powerful test of whether an employer truly understands and respects the lives of its workforce.