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Time in Lieu Explained

Luisa Syed 24 Oct 23:21 5 min read
office worker and clock

In a modern workplace, flexible working is becoming an increasingly common arrangement in companies. It is often sought after by potential employees as it allows them to plan alternative working arrangements or schedules. Whereas with employers, it allows them to initiate various schedules to help meet their companies’ deadlines or customer needs.

As an employer or employee, you may have already come across the term “Time in Lieu”, which is often seen in a flexible working environment. You may have either offered or accepted Time in Lieu.

In this article, we will look at Time in Lieu and go over the following questions and points:

  • What is Time in Lieu (TOIL)?
  • What are the rules regarding TOIL in the UK?
  • How to offer Time in Lieu to your employees?
  • Pros and Cons with TOIL

What is Time in Lieu (TOIL)?

Time in Lieu, also known as TOIL, is when an employer offers time-off to their employees instead of paying for any additional hours they worked beside their contractual hours. The literal term for “in Lieu” means ‘instead’ or ‘in place of' - employees accept extra time-off instead of payment for working overtime.

What are the rules regarding TOIL in the UK?

In the UK, there is no obligation from employers to pay their employees for working overtime. However, there are laws regarding working hours that TOIL is liable to. Under The Working Time Regulations 1998, employers cannot make employees work for more than 48 hours (including overtime) unless the employee has chosen to ‘opt-out’ voluntarily and provides a written statement wanting to work for over 48hrs.

How to offer Time in Lieu to your employees?

To begin with, it is essential to have a written agreement between employer and employee where the terms and conditions are outlined and agreed upon. It should not be assumed or enforced that your employee agrees with TOIL; they may or may not want to be paid for working overtime or simply cannot work overtime. TOIL strictly applies to the additional hours that employees have worked above their contractual hours. Meaning that if an employee has worked two hours extra, they will be entitled to two hours of time in Lieu.

Once an agreement is in place, it is important to always record any extra hours employees have worked. Companies may use spreadsheets, timesheets or online HR software to record or keep track of extra hours that their employees have worked.

Furthermore, a TOIL policy should be considered and included in the employees’ contract or handbook. Ensure to outline the necessary terms and conditions. These could include:

  • If employees will be paid or not for working overtime.
  • The maximum amount of TOIL that employees can take.
  • When employees can use their banked hours – i.e. if there is a cutting off date for them to be used.
  • How extra hours worked will be recorded.

Pros

Time in Lieu is mainly an advantage for employers, as TOIL can come in handy during the busier times of a business. Offering TOIL during busier times will increase productivity and could even help reduce the pressure on smaller teams that need extra help.

TOIL can also be beneficial to employees by allowing them to get extra time off. It could help them with their mental and physical well-being (allowing them to destress and recharge) and improve their job performance.

Cons

There are possible downsides with TOIL (which can be avoided) if it is not managed correctly, such as:

  • Employees may take advantage of TOIL, where they could try to take extra time off to avoid participating in future projects.
  • There could be confusion regarding TOIL if no policy is in place.
  • Accumulation of TOIL.
  • Employers or employees not keeping track or recording time off appropriately.
  • Employees not using their accrued TOIL.
  • It could lead to disruptions of employees’ holiday scheduling.
  • Employees may get overworked, resulting in them feeling more stressed, which could lead to employee turnover. Also, if your employees have to work overtime frequently, it could mean that your team is alarmingly understaffed.

Final Thoughts

Time in Lieu is an efficient way to help your business increase productivity and meet project deadlines quicker, especially during busier times. However, it is essential to note that a proper TOIL management system is required to avoid unnecessary problems. As an employer, it’s your responsibility to have a fair TOIL system, so make sure that both you and your employees agree to the terms.

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