Religious observance involves things like reciting prayers and singing the hymns of a particular faith.
Religious instruction involves teaching about a faith (like Christianity). It is not neutral; it assumes belief in that faith.
Religious education (religious studies) is teaching about religion as part of a broader context. It should be neutral, and not favour any particular religious belief.
Any school is free to teach religious education – facts about religions and the role of religion in society. The curriculum must be inclusive and reflect our cultural identity – no particular belief should be supported.