'time off in lieu' basically means that any extra hours (when working late) or days that you work in your job are converted into additional hours/days you can take as paid holiday. Not all companies give their staff 'time off in lieu' for working extra hours or days.
It is different to 'overtime', because with 'overtime' you are actually paid for the extra hours that you work.
If you work 5 days a week (Monday to Friday) and one week you are asked to work in addition on Saturday. If your company gives 'time off in lieu', you will have an extra day to take as paid holiday.
To learn more vocabulary connected to money and work, you can do a free online exercise on job related vocabulary.