How Does Time in Lieu Work?

By Andrew Willis
21 Mar 2019

You’ll most commonly use time off in lieu (TOIL) when you require employees to work extra hours or days. TOIL is useful in environments that encourage flexible working. It allows employees and your business to negotiate working hours.

This post explains how it functions in an organisation and how you can utilise it.

What is time in lieu?

“In lieu” essentially means “instead”.

Some of the confusion created by TOIL is that it’s a term half-written in Middle English.

 This leads some people to ask, “What is the meaning of ‘in lieu’?” Well, the modern translation is: “time off instead”.

British law provides the following time in lieu meaning: “Time off instead of paying for overtime”.

That sums TOIL up accurately but doesn’t explain the complexities of how it works through restrictions, pay, and the working time directive. We’ll cover these points further below.

You should also remember that it doesn't relate to garden leave or PILON - find out about those here

How does time off in lieu work?

You agree to offer TOIL to an employee in writing. You can’t enforce or assume they’ll take it. Once you and your employee agree and sign, you should keep a copy of the agreement in the staff member’s personnel file.

To clarify, you don’t need the written agreement every time the employee wants time in lieu—only upon initial agreement.

Once the system is in place, the employee may then bank the time they want to take off at a later date.

You should place a date on when the employees need to use up these banked hours.

An obvious one for this is the end of the business or financial year.

TOIL is subject to the UK Working Time Regulations, which means no employee can work more than 48 hours a week unless they sign a written opt-out agreement.

That total includes overtime, which limits the amount of extra work employees can do.

Creating a time off in lieu policy

The written agreement entitling your employee to time in lieu can be a separate document to the employee’s contract.

However, it’s usually better to include it, or at least have a copy in their file.

To avoid workers taking lots of time off and accruing weeks’ worth of holiday, you should include a clause that clearly states how much time off they can accrue. And when they need to take it.

It’s up to you how strict or lenient you wish to be with these parameters.

Whatever you decide, remember you and the employee need to agree to your policies.

Compensatory time off in lieu of overtime pay

Depending on the individual’s situation, they may prefer an alternative option to time off in lieu.

Unfortunately, compensatory time off is not one of these options. Why? As it’s exactly the same thing.

The term is often used interchangeably and often causes confusion. The real choice is between:

  • Time off in lieu.
  • Regular overtime pay.

Discuss with your employees which option is more appealing to them. Then you can decide which works best for you and your staff member.

Answers to common TOIL questions

TOIL is a fantastic tool, but can easily become a point of tension if handled incorrectly.

Hopefully, you can now answer all of the main questions put to you by employees. But in case you’re still uncertain, here are some common questions from employees and businesses:

  • “What are lieu days?”: Paid days off on the condition the staff member has worked the same amount of hours above their regular contracted hours.
  • “Can I be forced to work overtime?”: The employee and employer must have a written agreement for the employee to work overtime.
  • “Is time in lieu legal?”: So long as you’re not forcing employees to work time in lieu against their will, it’s legal. But remember, staff still bound by the UK Working Time Regulations—they can’t work any more than 48 hours unless a written opt-out agreement is signed.

Are you toiling with an HR issue?

If you need further guidance on time in lieu, or any other HR issue, speak to a Croner expert today on 01455 858 132.

About the Author

Andrew Willis

Andrew Willis is the senior manager of the Litigation and Employment Department and assumes additional responsibility for managing Croner’s office based telephone HR advisory teams, who specialise in employment law, HR and commercial legal advice for small & large organisations across the United Kingdom.





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