Public holidays around the world – disruptive or desirable?

A public holiday, also known as a bank holiday, national or legal holiday, is a special holiday, apart from the annual leave an employee is entitled to benefit from according to his employment contract. These days are meant to celebrate certain historical or religious  facts or personalities who are closely related to a country. The legal holidays are dates fixed by the government or are announced on short notice, case in which are called ad hoc.  Albeit this is the general setting of public holidays, there are peculiar situations, such as: the public holidays synchronize with the weekend days, some employers may need their employees at work, urgent transactions need to be operated and so on.

What are the options for these exceptions?

Well, the answer depends to the country in question. Generally speaking, if a public holiday falls on a weekend, the non working day is substituted with another day during the week, so there is a compensation. Moreover, if the bank holiday is on a Sunday, Monday is “deemed to be a public holiday”, according to the Public Holiday Act of South Africa (1994) and many other countries, where the employment practices are regulated by Employment Acts.  In Romania, this is still a legislative project and has not become statutory.

Secondly, most of the employees do not have to work on public holidays. Nevertheless, some enterprises or institutions work 24/7, so they cannot shut down their activity. In this case, those working in restaurants, hotels, hospitals and other healthcare places, e-commerce and so on are paid with higher wage rates in order to compensate their effort.  In other fields, the choice whether to work or not on public holidays is the result of negotiations between the employee and employer and their priorities. For example, in UK, public holidays are working days, fact which is partially compensated by the highest annual leave rate in Europe, 28 days. (https://www.gov.uk/holiday-entitlement-rights)

In Romania, the rule of thumb is that employees are entitled to take days off work on public holidays, except they want to work, being remunerated with the wage rates used for overtime pay or the regular wage, depending on the employer’s wage policy.

On the other hand, banks, other financial institutions and stock exchanges are closed on public holidays, which means that processing payments and transactions face a certain delay, having negative effects for the clients.

However, the most common banking transactions can take place unboundedly, such as withdrawing cash from ATMs, using  your account online or on mobile apps, requesting transfers, paying  bills, taking into consideration that processing the complex requests may start the next business day.

The first thought when we hear of public holidays is the excitement of more leisure time and we start planning what to do with the expected or unexpected day/s off work. However, the other side of the coin reveals the impact of legal holidays on the real economy.

Whereas employees  try to find ways to take advantage of the public holidays, even creating  a ’’bridge’’ with legal holidays that fall on the weekends and getting a longer holiday this way, the employers are more reluctant and aware of eventual output gaps that might occur.

Therefore, we talk about output loss, leading to ‚’’compromising production yield and lowering productivity’’(http://www.bnm.gov.my/index.php?ch=en_publication&pg=en_papers&ac=43&bb=file) . Other consequences would be affecting the individual schedule and appointments. More leisure time involves an increase in consumption and tourism spending.

In 2018, the largest amount of public holidays is found in Cambodia, followed by Sri Lanka, India and Kazahstan. (Figure 1, Source: https://www.worldatlas.com/articles/countries-with-the-most-public-holidays.html)

From my point of view, we cannot relate the demographics of a country to the labour policy(Cambodia’s population is of only 16 million people), but it is claimed that the emerging economies have more legal holidays than the developed countries.  Moreover, it is also important to observe the connection between the working hours and productivity in every national context, because there are many differences amongst labour policies around the globe when it comes to working hours and paid annual leave.

In 2018, in Romania there are stipulated in the Employment Act 15 days of public holidays, with 2 more than there were in 2015 and with a few more under observance.

What is your thought regarding public holidays? How many are there in your home country and what is the government’s and employers’ view towards legal holidays?

Irina Badea, PhD

University of Craiova, Romania

About the Author

Irina Badea

Author

I was born in Craiova, Romania, in 1989. I graduated from the Faculty of Economics and Business Administration, where I studied Finance and Banking. In 2016 I took my PhD in Finance and worked as a Graduate Teaching Assistant in the Finance, Banking and Economic Analysis Department at the University of Craiova for 2 years. My research interests are related to finance and public administration, but open to a multidisciplinary approach.

View All Posts