Any time off work as holiday has to be taken at a time agreed with your employer. Usually there's give and take with this - you ask for a certain day off and the employer decides if its suitable.
To tell you that you must take a particular day as your day off in lieu would seem a bit harsh. I'd say it really depends on what it says in your contract and company policies. Company policies can change from time to time but a change to your contract would have to be negotiated.
So, its possible they can do it legally but you need to read your contract.