What Is Time In Lieu?

You might be familiar with the term “in lieu”, a French term that generally translates to “in place” or “instead” of. 

Time in lieu, also known as time off in lieu or TOIL, refers to an employee’s entitlement to take time off from work in place of or instead of receiving overtime pay for the additional hours they worked outside of the normal hours they are contracted to work.

In many cases, days in lieu refers to when an employee works on a public holiday. They are then entitled to take a paid day off at a later date, otherwise known as an ‘alternative holiday’.

As a business owner, you might be wondering how you can best manage busy periods where your employees may need to work longer hours to complete projects. Implementing time in lieu arrangements can have several advantages in your workplace, for both you and your employees. 

From managing costs and enabling improved flexibility in working hours, read on to find out more about time in lieu arrangements and what it means for your business.

What’s The Difference Between Overtime and Time In Lieu?

Time in lieu is essentially an alternative to overtime pay an employee would normally be entitled to. Like we mentioned above, this applies to public holidays.

Typically, employees will be entitled to be paid overtime rates if they perform work that is either:

• More than their ordinary hour of work. For example, the ordinary hours for most full-time employees will be 38 hours per week (plus any reasonable additional hours). So, if they work more than 38 hours in a week, they may be entitled to overtime.
  
• Outside the span of ordinary hours of work. The span of ordinary hours of work will usually be specified in the relevant modern award covering your employees.

So, if an employee works outside these hours, they may be entitled to overtime.

In comparison to overtime, time in lieu may offer some benefits, such as:

• Minimising the need to pay overtime rates
• Enabling a greater range of flexible working arrangements and working hours
• Incentivising employees to work increased hours during busy periods by offering a form of leave they can take at a later date
• Strengthening relationships and trust between you and your with employees by being open with them and working together to find solutions

When Can An Employee Ask For Time In Lieu?

Employees can ask you for time in lieu, however, you need to agree to the date. In other words, both th employer and employee need to agree to a date that works for both of them.

Time in lieu arrangements are made by agreement between you and your employees, so it is important to discuss with them whether they will receive overtime pay or time in lieu. This means that, if one of your employees works overtime and asks to take time in lieu of overtime pay, you can say no. Equally, you cannot force an employee to take time in lieu to avoid paying them any applicable overtime or penalty rates.

In some cases, an employee’s request for time in lieu is also subject to any relevant workplace policies you might have, or any clauses that discuss time in lieu in your employment contract.

What Are Some Problems With Time Off In Lieu?

While time off in lieu is often seen as a great solution for employers and employees alike, it can cause some issues. 

For example, it may act as a wrong incentive for employees to work overtime when not needed, and normalising a culture of working beyond your hours may threaten a healthy workplace culture. 

As such, some employees may take advantage of it, or may be inconsistent with other workplace policies. 

These issues can also affect morale within the company or employee confidence in the business’ ability to take care of its employees, especially if there is a pattern of working overtime. 

How Much Time In Lieu Can An Employee Accrue?

As long as any time off is taken within 6 months of being accrued, there is generally no limit on the number of hours of time in lieu an employee can accrue.

You may want to implement your own policies in relation to how time in lieu is managed to avoid any unnecessary burden or strain to your business. 

For example, introducing a system that requires employees to have overtime hours approved can help avoid situations in which they stay late to finish their ordinary tasks.

When Can I Ask My Employee To Work Extra Hours?

Generally, you will be able to ask employees to work ‘reasonable additional hours’. They can refuse to work the additional hours if the request is ‘unreasonable’ in the circumstances.

Furthermore, they do not have to accept additional work or additional hours if there is no clause in the employment contract that requires them to do so.

If you plan on asking your employees to work additional hours when needed, ensure your employment contract clearly sets this out. This way, employees are prepared to accept this additional work as a requirement under a legally binding contract.

Need Help?

From navigating employer obligations to drafting workplace policies, working out the ins and outs of time in lieu doesn’t need to be hard! Our employment lawyers can help you out. 

If you would like advice on whether time in lieu is right for your business, you can reach us at 0800 002 184 or [email protected] for a free, no-obligations chat.

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