At Workwise in recent weeks we have had a number of members ending up having issues over excessive ‘time off in lieu’ accruals.
Many employers utilise this system of accounting for and remunerating overtime hours, but unless well managed this practice can lead to a number of issues as time goes on.
What is ‘time off in lieu’ (TOIL)?
‘TOIL’ or ‘TIL’ is a practice which is detailed and allowed in many Awards both State and Federal and the first step when considering adopting this approach is to carefully check your Award to see what ‘rules’ are in place for managing this. Regrettably many employers naively establish an often unwritten procedure of ‘TOIL’ without any regard for any legislative/statutory requirements that underpins it – this can also be because they don’t know that there actually are any specific requirements.
In some Modern Awards – but by no means all – TOIL is taken on an hour for hour basis ie 6 hours of overtime equates to 6 paid hours in lieu to be taken at a mutually agreed time. In addition a number of Awards also require that if the leave has not been taken within a calendar month of its accrual then it must be paid out to the worker at the applicable overtime rate of pay. Other Awards insist that TOIL must be accrued in line with the overtime hours actually worked so two hours of overtime might equate to 3 hours of TOIL for example.
Herein lies the first dilemma, as so often employers/managers simply either cannot find the time to allow the employee to take the accrued time off or forget that it’s there until such time as many hours have accrued and represent – of themselves – a huge liability for the business.
Do you know what your Award says about TOIL and the specific conditions that apply to it?
What should you have in place BEFORE deciding to use a ‘TOIL’ system?
1. Read the Award and have a very clear understanding of your obligations when using TOIL;
2. Establish a clearly articulated written Policy that spells out how TOIL is to be managed, a maximum accrual limit and a time limit for taking it along with the procedure for paying TOIL out and the methodology that sits behind the calculation;
3. A clearly articulated and written Policy regarding the working of overtime ie ‘authorised’ overtime, that also states that unauthorised overtime ‘will not be paid’;
4. Provide a briefing(s) so that you can roll out the Policy documents and support a clear understanding of how the TOIL system is to be managed by your supervisory staff in line with your Policy(ies).
5. Provide a briefing(s) to employees so that they understand how this system is to work and a form where the employee signs off (if TOIL is an option) that they wish to take time in lieu rather than be paid for overtime.
Failure to do these things can lead to a not uncommon situation across a payroll of having hundreds of hours of TOIL owing to staff. Without a clear and transparent system of approving overtime you can be open to abuse and falsification of records of hours worked or find that supervisors ‘play favourites’ with the giving of overtime to selected members of their team.
Make sure that if you are considering utilising TOIL that there is a benefit to the business in going down this path and have a strong business case for adopting it otherwise you may well be better to strictly monitor overtime and pay it as it is worked. You can also use this option inside a properly constructed ‘Individual Flexibility Agreement’ if you are a Federal employer.
Have an issue with TOIL? Call us to discuss your options.
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