Workers rostered on Christmas Day will receive public holiday penalty rates after a government backflip that followed a backlash from unions.

Small Business Minister Philip Dalidakis had been labelled a "Grinch" by union leaders for the original decision to scrap public holiday rates for Christmas Day, which falls on a Sunday this year.

Small Business Minister Philip Dalidakis said the original decision was a mistake. Credit:Jessica Shapiro

But on Friday he said he had reconsidered his original decision and admitted it was a mistake.

"I think it's important that when you make a mistake you put your hand up, acknowledge it and get on with life," he said.