Christmas Day will be a public holiday in Victoria this year despite the premier previously ruling it out. 

Small Business, Innovation and Trade Minister Philip Dalidakis announced the change of tack for today, saying it would give Victorians an extra day to spend with their families and friends and those who have to work on Christmas “the penalty rates they deserve”.

“I’ve had time to consider how the existing arrangements unfairly affect those Victorians required to work on Christmas Day when it falls on a weekend – that’s why I’m making this change,” the minister said. 

“Christmas Day is not like any other day, it is a special day for many Victorians and it is a day to spend more time with family and friends.”

The decision will mean Victoria joins every other Australian state to recognise Christmas Day as a public holiday.

Victorian Premier Daniel Andrews had previously come under fire for its so-called "Grinch-like" decision not to make Christmas – which falls on a Sunday this year – a public holiday.

That decision received front page treatment across the state.

Earlier in the year the premier weather a storm of criticism for continuing with his new AFL Grand Final Eve public holiday. 

But while workers and unions may celebrate the news, the business community have already slammed it as a “slap in the face”.

“Adding yet another public holiday at this short notice is not only inconsistent but a slap in the face for many business owners and operators who have already paid out thousands to pay for two extra public holidays this year,” Victorian Chamber of Commerce and Industry chief executive Mark Stone said.

“Businesses will now enter 2017 looking at the Victorian public holiday calendar as a rough guide, knowing that it may be subject to change with just a few weeks’ notice.

“Adding a public holiday in response to criticism on the front page of a newspaper is bad policy, bad for business and bad for Victoria’s competitiveness against other states.”

This year, Victoria will observe Sunday 25 December as a public holiday in addition to the public holiday set to be observed on Tuesday 27 December.

The move will align Victoria with other states and also other public holidays – such as ANZAC Day and Australia Day, which are observed on the date they fall.

While trading restrictions apply to businesses on Christmas Day, Sunday 25 December, trading restrictions will not apply to the substituted holiday on Tuesday 27 December 2016.