Working Time Regulations Cannot be Used to Limit Enhanced Contractual Right

The Employment Appeal Tribunal (EAT) held in Beijing Ton Ren Tang (UK) Limited (BTRT) v Ms S P Wang [2009] UKEAT/0024/09/DA that an employer cannot rely on the Working Time Regulations 1998 (WTR) to limit greater contractual holiday entitlement if an employee makes a claim for unpaid holiday on termination of their employment.

Ms Wang had an oral contract with BTRT under which she was entitled to 30 days' holiday per year. BTRT informed her that she would be entitled to receive payment in lieu of any accrued but untaken holiday on termination of her employment. Ms Wang worked for BTRT for 7 and a half years and took very little holiday during this time. As a result, she asked to be paid in lieu of 131 days of untaken holiday, the balance of her untaken holiday going back several years. BTRT argued that under the WTR, holiday could not be carried over from one holiday year to the next and therefore, Ms Wang was only entitled to receive payment for untaken holiday in the final year of her employment and any contractual untaken holiday that exceeded her statutory entitlement to holiday under the WTR.

This argument was rejected by the EAT which held that the effect of the WTR was enhanced by the oral contract. Ms Wang was therefore entitled to receive payment in lieu of all 131 days of untaken holiday.