People Ops - HR

Time Off in Lieu (TOIL) in the UK Workplace

Elena Segura


Mar 19, 2024

Time Off in Lieu (TOIL) in the UK Workplace

In the evolving landscape of work, Time Off in Lieu (TOIL) is emerging as a pivotal concept, balancing the scales between operational demands and employee well-being. This guide delves into the intricacies of TOIL, providing a deep dive into its definition, legal standing in the UK, the concept of lieu days, and the strategic benefits it offers. Moreover, we'll touch upon the possibilities surrounding compensation in lieu of holidays and offer a template for a TOIL agreement, tailoring our discussion to the nuanced needs of HR professionals, finance leaders, and business founders.

What is TOIL (Time Off in Lieu)?

TOIL refers to the practice of compensating employees with additional time off for hours worked beyond their standard contractual obligations, instead of traditional overtime pay. This approach prioritizes flexibility and acknowledges the diverse preferences of the modern workforce, offering an alternative to financial overtime compensation.

What Is A Lieu Day Or A Day In Lieu?

A lieu day, or day in lieu, is the actual time off granted to an employee as compensation for extra hours worked. It's a tangible expression of TOIL, providing employees with a day off that can be used at a later date, agreed upon by both the employer and the employee. This system ensures employees are rewarded for their dedication and hard work without the immediate fiscal implications of overtime pay.

What Does UK Law Say About TOIL?

Under UK law, TOIL is not specifically mandated, but it's widely recognized as a legitimate form of compensating for overtime. The Working Time Regulations 1998 outline the maximum work hours and rest entitlements for workers, setting a legal framework within which TOIL can operate. However, any TOIL arrangement must respect these regulations, ensuring that employees don't exceed 48 hours of work per week on average, unless they've opted out, and that they receive their statutory rest periods and holiday entitlement.

Can Employees Be Paid In Lieu of Taking Holiday?

In the UK, employees have the right to 5.6 weeks of paid holiday per annum, but payment in lieu of taking these holidays is generally not permitted, except upon termination of employment. Any TOIL arrangement should be distinct from statutory holiday entitlements, ensuring that employees still take their minimum paid holidays as required by law.

What Are The Benefits Of a TOIL Policy?

Implementing a TOIL policy offers a myriad of benefits for both employees and employers:

  • Flexibility: It provides employees with more control over their work-life balance, enabling them to take time off when needed or preferred.

  • Cost-Effectiveness for Employers: It allows businesses to manage extra workloads without the immediate financial outlay associated with overtime pay.

  • Employee Well-being: By recognising and compensating extra efforts, TOIL policies can boost morale and job satisfaction, contributing to a positive workplace culture.

  • Attractiveness as an Employer: Offering TOIL can make an organization more attractive to potential employees who value flexibility and work-life balance.

Time Off In Lieu Agreement Template

A TOIL agreement template should clearly outline the terms and conditions under which TOIL is granted, tracked, and utilised. Essential components include:

  1. Eligibility Criteria: Define who is eligible for TOIL within the organization.

  2. Accrual and Use: Detail how TOIL is accrued (e.g., hour for hour, any caps on accrual), and the process for requesting and approving TOIL.

  3. Expiration: If applicable, include any rules around the expiration of accrued TOIL to encourage timely use and prevent excessive accrual.

  4. Compliance: Ensure the agreement complies with UK Working Time Regulations and other relevant laws, specifying that TOIL is not a substitute for statutory holiday entitlement.

  5. Modification and Termination: Outline the conditions under which the TOIL policy or individual agreements can be modified or terminated.

This comprehensive guide to TOIL underscores its value as a strategic tool for enhancing workforce management and employee satisfaction. By carefully crafting a TOIL policy that respects legal standards and addresses both employer and employee needs, organizations can foster a supportive, flexible, and productive working environment.


Can all employees request Time Off in Lieu?

Eligibility for TOIL varies between organizations. While some offer "lieu time off" to all employees, others may limit it to specific roles or levels. It's crucial for employees to consult their HR department or employee handbook to understand if they're eligible for "time off in lieu."

How is TOIL calculated?

The calculation of "time in lieu" often follows a 1:1 ratio, where one hour of overtime work equals one hour of "lieu time." However, arrangements such as "lieu time off" policies can differ, so employees should refer to their organization's TOIL policy for specifics.

Is there a limit to how much TOIL an employee can accumulate?

Yes, most organizations set limits on the amount of "lieu time" an employee can accrue. These limits are designed to prevent excessive banking of work hours and ensure employees take regular rest periods. The specifics are typically outlined in the company's TOIL or "time in lieu" policy.

How does an employee request TOIL and schedule their time off?

An employee usually needs to submit a request through their organization's People Operation system or directly to their manager for approval. The process for scheduling "lieu time" is outlined in the company's TOIL policy, promoting fairness and operational efficiency.

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