Hi Niwantha, The word "lieu" comes from "locus" (which has the meaning of a central location) and means "place". "In lieu of" is a common collocation which simply means "in place of", and is often used to refer to situations where an employee is compensated with leave on another day because they have worked on an actual public holiday or a weekend. Let's take a look at this sentence: Today is a holiday for us in place of Labour Day. We replace "in place of" with "in lieu of", which is your sentence: Today is a holiday for us in lieu of Labour Day. You may also hear someone say "time off in lieu". Come companies give "time off" to employees who have worked extra hours and these companies compensate them by allowing them to take time off. In this case, they are entitled to "time off in lieu". We worked on Labour Day, so today, we are having time off in lieu. It depends on how you write your sentence. Hope this helps.

"In lieu of" is essentially a fancy way of saying 'instead of' (it's basically stolen French and in French would be 'en lieu de' [lit. in the place/position of]... which is the etymology for "lieutenant" etc.). It typically is used with 'of' as it is usually not correct without the word 'of' following on after 'lieu'. However, in the context you've provided, 'labour day' tends to be a public holiday in most countries, so you wouldn't use 'in lieu of' or its equivalents here in terms of what is actually being described. However, you can use it regarding the name (some countries have public holidays, none of which are explicitly called 'Labour Days'), though it does seem a tad overdone(?) for this purpose e.g. we just call today a public holiday in lieu of a labour day. Or something along those lines.