TOIL and the Employment Rights Act 2026: What UK Employers Need to Know

Overview: The Employment Rights Act 2026

The Employment Rights Act 2026 is the most significant reform of UK employment law in a generation. It builds on and substantially expands the Workers (Predictable Terms and Conditions) Act 2023, adding new rights around flexible working, predictable hours, zero-hours protections, and overtime.

For employers who use TOIL arrangements, the Act creates important new considerations — particularly around how overtime hours are offered, how TOIL is managed for zero-hours and variable-hours workers, and what documentation you need to keep.

See our broader Employment Rights Act 2026 guide for a full overview of all changes.

Key Provisions Affecting TOIL

1. Right to Request a Predictable Working Pattern

Workers with 26 weeks of continuous employment (reduced from the previous threshold) can now request a more predictable working pattern. This includes requesting fixed hours rather than variable ones, or regular days rather than on-call arrangements.

TOIL implication: If your TOIL policy relies on employees regularly working irregular overtime hours, you may face more requests to formalise those hours into the contract. Employees who routinely work and bank TOIL — particularly zero-hours or casual workers — may use this right to push for contracted hours instead.

Employers can still decline predictable hours requests on business grounds, but must follow a formal process and respond within a defined timeframe.

2. Zero-Hours Contract Protections

The Act introduces significant new protections for zero-hours and low-hours workers. Employers who regularly offer hours to zero-hours workers must guarantee a minimum number of hours reflecting actual working patterns after a qualifying period.

TOIL implication:If your zero-hours workers regularly work more than their base arrangement and bank the extra as TOIL, the Act may require you to offer them a contract reflecting those hours. Review your zero-hours TOIL arrangements carefully — workers whose "base" is zero but who consistently work 25 hours a week should now be offered a contract reflecting that reality.

3. Enhanced Flexible Working Rights

Flexible working is now a day-one right (it was previously available after 26 weeks). The number of requests an employee can make has increased, and the grounds for refusal have been narrowed.

TOIL implication:TOIL is effectively a form of flexible working — employees accumulate time off instead of pay, giving them flexibility about when they take leave. Employers should ensure TOIL policies don't inadvertently conflict with flexible working rights. For example, requiring all TOIL to be taken on specific days chosen by the employer may be harder to justify if an employee has a live flexible working arrangement.

4. Overtime and Working Time Changes

The Act strengthens requirements around recording working time, particularly for workers without fixed hours. Employers must keep adequate records to demonstrate compliance with the 48-hour average working week limit and night work restrictions.

TOIL implication:If overtime is compensated by TOIL, you need records that show: (a) the overtime was worked, (b) it brought the employee's total hours close to or above WTR limits, and (c) the TOIL was actually taken, providing the necessary rest. Informal TOIL arrangements with no records are increasingly risky.

What You Need to Update in Your TOIL Policy

Given the changes under the Act, review your TOIL policy for the following:

• Zero-hours workers — if zero-hours workers accrue TOIL regularly, review whether their pattern triggers the new hours guarantee obligation. If it does, you may need to offer them a contract reflecting their actual hours before placing TOIL on top of it.
• Record keeping — ensure your TOIL system produces adequate records: date, hours, authorisation, and actual TOIL taken. Spreadsheets that are only updated monthly will not be sufficient for enforcement purposes.
• Predictable hours interaction — if a worker requests predictable hours, review whether your TOIL policy is compatible with the new contracted pattern they're requesting.
• Flexible working compatibility — ensure TOIL booking processes don't inadvertently override existing flexible working arrangements.

TOIL and the Right to Disconnect

The Employment Rights Act 2026 also introduces a right to disconnect for workers — the right not to be contacted outside working hours, and to decline work or respond to messages when not on shift.

This has a direct implication for TOIL: if an employee is contacted outside their shift (for example, by a manager asking them to complete urgent work), and they perform that work, this creates a TOIL obligation. The right to disconnect effectively clarifies the employer's responsibility — if you want out-of-hours work, you must compensate for it (via TOIL or pay), and employees have the right to decline without detriment.

What Good TOIL Compliance Looks Like in 2026

Under the Employment Rights Act 2026, well-managed TOIL looks like this:

1. A written TOIL policy that clearly covers eligibility, accrual rates, caps, expiry, and termination treatment
2. Pre-authorisation for overtime that will be compensated by TOIL
3. Real-time records of overtime worked and TOIL balance
4. Regular review of zero-hours workers with regular TOIL accrual — consider whether hours guarantees are triggered
5. WTR compliance checks showing the 48-hour limit is not exceeded when TOIL is banked but not yet taken
6. A process for TOIL requests that is consistent with any flexible working arrangements in place

Using Software to Stay Compliant

The record-keeping requirements introduced by the Act make manual TOIL management increasingly untenable. Purpose-built TOIL management software gives you:

• An automatic audit trail of every overtime hour and TOIL approval
• Real-time balances that employees and managers can both see
• Configurable accrual rates, caps, and expiry rules
• Integration with timesheets so overtime automatically creates TOIL when approved
• Data exports for compliance reporting

Start a free TimeTally trial to see how TOIL can be managed compliantly and automatically.

Disclaimer: This article provides general guidance on UK employment law and should not be taken as legal advice. The Employment Rights Act 2026 is subject to ongoing implementation guidance from the government. Consult a qualified employment lawyer for advice specific to your business.