Appeal No. UKEAT/0024/09/DA

EMPLOYMENT APPEAL TRIBUNAL
58 VICTORIA EMBANKMENT, LONDON EC4Y 0DS

	At the Tribunal
	On 17 July 2009
Judgment handed down on 14 October 2009

Before
HIS HONOUR JUDGE PETER CLARK
MRS J M MATTHIAS
MRS L TINSLEY

BEIJING TON REN TANG (UK) LTD	APPELLANT

MS S P WANG	RESPONDENT

Transcript of Proceedings

JUDGMENT

	APPEARANCES

For the Appellant	MR JAMES PETTS
(of Counsel)
Instructed by:
Messrs Lu Oliphant Solicitors
Premier House
112 Station road
Edgware
Middlesex HA8 7BJ	
For the Respondent	MS HARINI IYENGAR
(of Counsel)
Instructed by:
Mary Ward Legal Centre
26-27 Boswell Street
London
WC11N 3JZ	

SUMMARY
UNFAIR DISMISSAL:  Mitigation of loss
PRACTICE AND PROCEDURE:  Bias, misconduct and procedural irregularity
CONTRACT OF EMPLOYMENT:  Sick pay and holiday pay

Principles to be applied when considering whether the Respondent has shown that the Claimant had failed to mitigate her loss.

Whether a procedural irregularity occurred below in relation to ‘agreed’ wages figures or whether ET gave sufficient notice of its intention to assess the figures on basis of evidence put before them.

Whether contractual claim for pay in lieu of unused holiday entitlement following termination of the employment offended reg. 35(1)(a) WTR 1998.

Appeal dismissed.

HIS HONOUR JUDGE PETER CLARK
1.	The parties in this matter, which has been proceeding before the London (Central) Employment Tribunal, are Ms Wang, Claimant and Beijing Tong Ren Tang (UK) Ltd, Respondent.  This is an appeal by the Respondent against the award of compensation made by an Employment Tribunal chaired by Employment Judge Burns following a finding of unfair dismissal, that liability finding not being subject to challenge, in a Judgment promulgated with reasons on 18 September 2008.

Background

2.	The Respondent carries on the business of a Herb and Health shop in Shaftesbury Avenue, London.  The Claimant, a traditional Chinese Medicine Professor, was recruited by the Respondent through an agency in China to work in the business.  She commenced her employment on 15 November 2001.

3.	On 8 January 2008 her employment was terminated by the Respondent.  She left the shop on 12 February 2008.

4.	The Employment Tribunal found, as was conceded on behalf of the Respondent, that the dismissal was unfair.  As to the assessment of compensation the Employment Tribunal made the following findings material to this appeal.

(1)	That although the Claimant’s salary at termination was ‘provisionally stated’ by her then representative Mr Wiggins, a solicitor at the Mary Ward Legal Centre, to be £18,000 per annum that was a ‘pragmatic’ figure and having considered pay documentations in the bundle before them the Employment Tribunal concluded that at the date of termination her net pay was £20,000 per annum, that is £384.61 per week excluding a meal allowance (Reasons, para 15) (the salary issue).

(2)	Due to the onset of tuberculosis in mid-June 2008 her employment would not, in any event, have continued beyond that time.  As to the 17 week period February – June 2008 the Employment Tribunal rejected a contention by the Respondent that the Claimant had failed to mitigate her loss.  They found, at paras. 28 – 32, that although she did not look for alternative work during the relevant period and was fit for work until June 2008, she was shocked by the manner of her dismissal; she was very isolated in the London Chinese Community since arriving in 2001; does not speak English and did not know any parts of the country outside London where some of the similar jobs advertised and relied on by the Respondent were located.  Further, she was so impoverished following dismissal that she had to borrow £30 from one of the Respondent’s directors to pay for food and her lack of funds in itself would have disabled her from at least some aspects of a potential job search (the mitigation issue).

(3)	The Employment Tribunal found as fact (paras. 35-40) that at the time she was recruited in China the Claimant was told by Mr Lo, a director of the Respondent, that she would be entitled to 30 days’ holiday per annum and if she did not take her holidays she would be paid in lieu of holidays not taken at the end of her employment (para. 35);  there was an oral contract she would be paid for holidays not taken during her employment, such payment to be made at the end of her employment (para. 40).

(4)	During the employment she took 4 days’ holiday each year, being public holidays when the shop was closed, and on one occasion visited China for 28 days.  She had thus foregone a total of 131 and a half days’ holiday during the employment.

(5)	The Respondent denied that she was entitled to any pay in lieu of holidays.  The material submission for our purposes was the proposition that the oral agreement found by the Employment Tribunal was void by virtue of Reg. 35(1)(a) Working Time Regulations 1998 (WTR).  At para. 45 the Employment Tribunal misstate the relevant provisions of the Regulations as reg. 39 read with reg. 35(7).  We agree with Ms Iyengar that those references should read reg. 13(9) and 35(1) respectively.

(6)	The Employment Tribunal rejected the Respondent’s submission (para. 46) simply on the ground that this was a claim in contract, not under WTR.  We agree with Mr Petts that this is not, of itself, an answer to the point raised; his submission requires more detailed analysis to which we shall return (the holiday pay issue).

The Appeal

5.	We shall deal with the three points raised in this appeal in the order in which they have been addressed by counsel, namely (1) mitigation (2) salary and (3) holiday pay.

Mitigation

6.	First, the principles of law to be applied.  S.123(4) Employment Rights Act 1996 (ERA) applies the common law duty of a person (the claimant) to mitigate her loss when assessing the compensatory award for unfair dismissal.

7.	The relevant principles are helpfully summarised by Potter LJ in Wilding v BT plc [2002] ICR 1079, para. 37, where he said:

“37	As was made clear in the judgment of the appeal tribunal the various authorities referred to by the tribunal (see paragraphs 22 and 23 above) and Payzu Ltd v Saunders [1919] 2 KB 581 are apt to establish the following principles which (in a form which I have somewhat recast) were accepted as common ground between the parties. (i) It was the duty of Mr Wilding to act in mitigation of his loss as a reasonable man unaffected by the hope of compensation from BT as his former employer; (ii) the onus was on BT as the wrongdoer to show that Mr Wilding had failed in his duty to mitigate his loss by unreasonably refusing the offer of re‑employment; (iii) the test of unreasonableness is an objective one based on the totality of the evidence; (iv) in applying that test, the circumstances in which the offer was made and refused, the attitude of BT, the way in which Mr Wilding had been treated and all the surrounding circumstances should be taken into account; and (v) the court or tribunal deciding the issue must not be too stringent in its expectations of the injured party. l would add under (iv) that the circumstances to be taken into account included the state of mind of Mr Wilding.”

And at paragraph 55 Sedley LJ added:

“55.	Simon Brown I-J's formulation in Emblem v Ingram Cactus Ltd (unreported) 5 November 1997, although it cites no authority and is addressed to the facts of that case, is a restatement of the principle set our by Lord Macmillan in Banco de Portugal v Waterlow and Sons Ltd (1932.) AC 452, 506:
"The law is satisfied if the party placed in a difficult situation by reason of the breach of a duty owed to him has acted reasonably in the adoption of remedial measures, and he will not be held disentitled to recover the cost of such measures merely because the party in breach can suggest that other measures less burdensome to him might have been taken.”
In other words, it is not enough for the wrongdoer to show that it would have been reasonable to take the steps he has proposed: he must show that it was unreasonable of the innocent party not to take them. This is a real distinction. It reflects the fact that if there is more than one reasonable response open to the wronged party, the wrongdoer has no right to determine his choice. It is where, and only where, the wrongdoer can show affirmatively that the other party has acted unreasonably in relation to his duty to mitigate that the defence will succeed.”

8.	Although in this jurisdiction Bessenden Properties v Corness [1974] IRLR 338 (CA) is authority for the general proposition that questions of mitigation are questions of fact for the (Employment) Tribunal, we bear in mind Potter LJ’s caveat at para. 36 of Wilding that although the premise is correct (by reference to the old common law case of Payzu v Saunders [1919] 2KB 581, 588-589, per Bankes LJ) it will always be open to an appellant to contend that the employment tribunal took into account irrelevant factors or failed to take into account relevant factors or otherwise reached a perverse conclusion, thereby falling into error of law.

9.	Mr Petts has also drawn our attention to the personal injury case of Marcroft v Scruttons Ltd [1954] 1 Lloyd’s Rep 395, in which the plaintiff (claimant) suffered minor physical injury in a fall at work.  However, he then developed severe anxiety neurosis and depression following shock;  what may now be classified as post-traumatic stress disorder.  He was advised by the medical practitioners to undergo electric shock treatment at a mental hospital.  Mr Marcroft adamantly refused to do so due to his image of mental hospitals.  The question for the Court of Appeal was whether the claimant had acted unreasonably in refusing to undergo treatment which the doctors believed would probably have been successful in curing his condition, which itself rendered him incapable of work.  In dealing with that issue (p. 401) Denning LJ, as he then was, posed the ‘difficult question’ as to whether the plaintiff’s subjective condition ought to be accepted as a reason for refusing medical treatment.  He answered that question in the negative.  It was unreasonable to refuse potentially beneficial treatment and expect compensation from the Defendant for the rest of his life.

10.	Mr Petts also relies on the NIRC decision in Archibald Freightage Ltd v Wilson [1974] IRLR 10.  There, the issue on appeal by the employer was whether the [Employment] Tribunal was entitled to reject their case that the claimant had failed to mitigate his loss by not taking less well paid alternative employment following his unfair dismissal.  The appeal was characterized as one of fact not law and dismissed, but at para. 3 Sir John Donaldson P., giving the judgment of the Court, formulated the correct approach in this way:

“It is the duty of an employee who has been dismissed to act reasonably and to act as a reasonable man would do if he had no hope of seeking compensation from his previous employer.” 

(See also Wilding, para. 37(i).

11.	Against that legal background we turn to the facts of the present case.  We have earlier summarized the Employment Tribunal’s findings and conclusion at paras. 28–32 of their reasons but we should also bear in mind their finding at para. 11, to which Mr Petts draws our attention:

“11.	She felt upset and depressed and for that reason did not feel in a suitable mood to search for other work and did not do so, although there would have been at least some vacancies for her type of work in London which she might have obtained had she felt able to do it.”

12.	Thus, submits Mr Petts, there were vacancies in London suitable for the Claimant; she was not disabled from working until the onset of TB in June 2008; she did not even look for work during that period.  The Employment Tribunal fell into error in taking into account an irrelevant factor, her subjective condition of being ‘suddenly bowled over with the unexpected dismissal’ (reasons, para. 32), in concluding that she had not behaved unreasonably in failing to make any attempt to find work, when it was available to her, during the relevant period of loss.

13.	We see a superficial attraction in that submission but it does not, in our judgment, tell the whole story.

14.	It is, we think, uncontroversial that in assessing the mitigation question the circumstances of the particular employee must be taken into account; see Fongere v Phoenix Motor Co. Ltd [1976] ICR 495 (EAT).  That is not a case which was specifically cited to us by counsel, but we do not believe that the proposition is contentious and therefore it is unnecessary to invite additional submissions; see Stanley Cole (Wainfleet) Ltd v Sheridan [2003] ICR 1449 and more recently Clark v Clark Construction [2009] ICR 718, both CA.

15.	That is not to say that an Employment Tribunal should simply accept the subjective view of the claimant (see Marcroft); nor that the test is simply objective rather than subjective (see the discussion in Wilding, para. 38).  The Employment Tribunal must consider all the circumstances in deciding whether the claimant has acted unreasonably in failing to find fresh employment.

16.	Here, the Employment Tribunal correctly directed themselves, in our view, at para. 32, in finding that it would not be reasonable to expect a person like the Claimant, when suddenly bowled over with the unexpected dismissal, to get herself straight back into the job market.

17.	As Ms Iyengar submits, that conclusion encompasses a number of findings of fact about this Claimant; hat she was greatly shocked by her sudden dismissal; that she felt isolated in this country; she spoke no English and did not know any part of the country outside London.  She had been recruited in China to do a particular job here and expected to be allowed to do it until 31 December 2008 at the earliest.  The expectation was that she would then return to China.  Accordingly she was left in an unusual and vulnerable position when she was unfairly dismissed.

18.	Mr Petts draws back from contending, as Ms Iyengar imputed to him, that where work is available a claimant who makes no attempt to obtain a new job will inevitably have failed to mitigate her loss.  We think that this is one of those unusual cases where, despite that factual state of affairs, the Employment Tribunal was entitled to conclude that in all the circumstances the Respondent has not shown that this Claimant acted unreasonably in failing to obtain alternative employment during the 17 week loss period upheld and thus had not failed to mitigate her loss flowing from the unfair dismissal.  It is perhaps noteworthy that, after Mr Petts conceded that the Claimant’s dismissal was automatically unfair under s.98A(1) ERA, the Employment Tribunal went on to make the (unchallenged on appeal) finding under s.31 Employment Act 2002 that the maximum statutory uplift on the compensatory award of 50 per cent was appropriate.

19.	Accordingly we reject this first ground of appeal.

Salary

20.	On the face of it there was agreement between the parties before the Employment Tribunal hearing commenced on 2 September 2008 as to the Claimant’s s gross and net weekly wage for the purposes of assessing compensation for unfair dismissal, if found.

21.	In her Claim Form ET1 lodged on 26 April 2008 the Claimant put her salary at £1,400 per month gross (£16,800 p.a.); £1,100 net.  In their Form ET3 the Respondent put her salary at £18,000 p.a. gross. In her schedule of loss the Claimant put her gross weekly pay at £346.15 (£18,000 p.a.); £271.30 net.  In their counter-schedule the Respondent agreed those figures.

22.	Mr Petts makes the point that for the purposes of calculating the basic award a figure of £2,970 was agreed between the parties (and was awarded by the Employment Tribunal; see the calculation following para. 32).  However, nothing turns on that agreement for our purposes, in our view, since the gross statutory maximum weekly pay at the relevant time stood at £330, less than the ‘agreed’ figure of £346.15.

23.	How then did the Employment Tribunal arrive at a net annual figure of £20,000, translating to a net weekly wage of £384.61 (as opposed to £271.30 net), which figure was used by the Employment Tribunal to calculate the Claimant’s loss of earnings over the 17 week period, to which the 50 per cent uplift was applied and to calculate the pay in lieu of holiday (see below)?

24.	Mr Petts submits that the Employment Tribunal departed from the agreed figure and carried out their own assessment of the Claimant’s salary without putting the parties on notice.  That was a material procedural irregularity such that the Employment Tribunal’s finding as to the proper level of salary cannot stand.

25.	In support of that contention he relies principally on the EAT judgment in Laurie v Holloway [1994] ICR 32 (Knox J presiding).  That was, we think, an extreme case on its facts.  The Claimant complained of unfair dismissal; during the hearing questions were put to the Claimant by the Tribunal Chairman directed to the question as to whether the pay arrangements between employer and employee were designed to defraud the Revenue.  No questions were put to the employer’s witnesses.  Neither side contended that the contract of employment was illegal.  The employment tribunal found that it was and on that basis dismissed the claim.  On appeal, the EAT held that if the employment tribunal was minded to take a point which had not been taken by the parties, natural justice required that the parties be put on notice that the tribunal was so minded, the point being potentially dispositive of the case, before closing speeches were concluded.  Accordingly the Claimant’s appeal was allowed and the matter remitted for rehearing by a fresh tribunal. 

26.	In the present case the position is less clear cut.  Despite the apparent agreement as to pay the Claimant’s Forms P45 and P60 were in the trial bundle.  We have before us Mr Petts’ helpful notes of the relevant oral evidence given below; Ms Iyengar  has taken us to a number of passages in the cross-examination of Mr Lo, called on behalf of the Respondent and the Claimant where there is discussion of her wage slips, her Forms P60 and P45 (prepared by the Respondent’s accountants).  Further, in his written closing submissions Mr Wiggins, having drawn attention to the figures for salary contained in the respective Schedules of Loss, then drew attention (under the heading ‘The Contract Claims’) to her ‘actual wage’ by reference to the P45 and P60; said to be £24,128 gross in the 2008 Form P45.

27.	On this question Judge Burns was asked by the EAT to provide his comments on the contention, at para. 7(b) of the Notice of Appeal, that it was both parties’ case that the Claimant’s salary was £18,000 p.a. gross, whereas the Employment Tribunal found that it was £20,000 gross (sic; net).  By his response the Judge stated that he did not believe that there was any such agreement between the parties; that the Claimant’s solicitors had considerably understated her salary and the Respondent’s counsel (Mr Petts) had, perhaps understandably, chosen to keep silent on the point;  that the Employment Tribunal’s role was to make correct findings on the facts; that the Forms P45 and P60 were in evidence and had been generated by the Respondent’s accountants and then this:

“(5)	I made a comment during the hearing about the quantum of the Claimant’s salary.  I cannot remember the exact words used but the gist was that I regarded the Claimant’s solicitors’ figure as too low and the quantum of salary was something which the Tribunal would have to determine among other matters.”

28.	Pausing there, it is common ground before us that this is a reference to a comment made by the Judge to the Claimant during her evidence, recorded by Mr Petts as follows:

“Claimant:	Wonder whether quantum agreed with Respondent …?

  Employment Judge:	Will grant judgment outside any agreements, if [you] settle it, if not the Employment Tribunal will award what it wants to award …”

and later
  “Employment Judge:	Will have to deal with on basis of what claiming unless otherwise persuaded in submissions.”

29.	The parties were also directed to lodge affidavits relating to the question of salary.  In his affidavit dated 3 January 2009 Mr Lu, the Respondent’s solicitor, referred to the above exchange between the Judge and the Claimant and to Mr Wiggins referring to £18,000 as a pragmatic figure during his closing submissions.  Mr Wiggins, in his affidavit dated 17 February 2009, agreed that the figure of £18,000 p.a. was selected by the trainee solicitor who prepared the Claimant’s Schedule of Loss as a pragmatic figure (it was the salary indicated to the Home Office in a letter included in the trial bundle), but he recalled the Employment Judge raising an issue about the correct rate of salary during the hearing.  He agreed with the Judge’s comment set out above and adds:

“I recall saying something to the effect that the Tribunal might come to its own view, but am not certain as to the precise words used.”

30.	Based on this material we have concluded that the question of the Claimant’s actual salary for the purposes of assessing compensation was sufficiently ‘in play’ and raised by the Employment Tribunal to put both parties and in particular the Respondent on notice that the Employment Tribunal would not be bound by the figures appearing in the parties’ respective Schedules of Loss.  Consequently there was no material procedural irregularity on the part of the Employment Tribunal.

Holiday Pay

31.	We have earlier set out the Employment Tribunal’s finding (paras. 35; 40) as to the oral contractual term providing for payment in lieu of holiday not taken following termination of the employment.  Was that contractual term rendered void by virtue of reg. 35 (1)(a) WTR which provides:

“(1)	Any provision in an agreement (whether a contract of employment or not) is void insofar as it purports –
(a)	to exclude or limit the operation of any provision of these Regulations, save insofar as these Regulations provide for an agreement to have that effect.”

32.	The WTR are designed to implement the Working Time Directive 2003/88/EC (WTD).  Article 7 of the WTD provides:

“1.	Member States shall take the measures necessary to ensure that every worker is entitled to paid annual leave of at least four weeks in accordance with the conditions for entitlement to, and granting of, such leave laid down by national legislation and/or practice.
2.	The minimum period of paid annual leave may not be replaced by an allowance in lieu, except where the employment relationship is terminated.

The provisions of Article 7 are to be found reflected in the following provisions of reg. 13 of the WTR; by reg. 13(1), read with para. 2, this Claimant was entitled to 4 weeks paid annual leave, and by reg. 13(9)

“(9)	Leave to which a worker is entitled under this regulation may be taken in instalments, but –
(a)	it may only be taken in the leave year in which it is due, and
(b)	it may not be replaced by a payment n lieu except where the worker’s employment is terminated.”

33.	We should add that reg. 17 permits contractual annual leave more favourable than that provided for in reg. 13.  That is the position here where the Claimant was entitled to 30 days’ paid annual leave.  Further the entitlement to additional leave provided for in reg. 13A came into effect on 10 October 2007. 

34.	Mr Petts submits, relying principally on the ECJ decision in Federletie Nederlandse Vakbeweging v Staat der Nederlanden [2006] IRLR 561 (‘Fed Ned’), that the Employment Tribunal‘s finding, that in respect of 20 days of untaken annual leave required by the WTR and the Directive the Claimant was entitled to recover pay in lieu following termination of the employment, amounted to an error of law because only untaken leave in the final year of employment was subject to a payment in lieu.  As to previous years the principle of “use it or lose it” applies.  Ms Iyengar‘s primary position is that the contractual term found by the Employment Tribunal does not offend reg. 35(1)(a).  We agree with Ms Iyengar.  Our reasoning is as follows.  

35.	The issue in Fed Ned arose in this way.  The Dutch Government interpreted provisions of the Civil Code transposing the WTD as permitting workers to carry forward leave from one year to the next and then taking it as additional holiday or exchanging it  for pay in lieu.  The claimant union challenged that interpretation as being incompatible with Art. 7(2) WTD.  On a reference to the European Court of Justice (ECJ) the Court held [2006] IRLR 561 that whereas leave could be carried forward to subsequent years it could not then be replaced by an allowance in lieu.  Since the social policy behind the WTD was to allow workers proper periods of rest, leave carried forward and taken as leave complied with that policy aim; “selling back” (our expression) leave did not.  The Court added that it is only where the employment relationship ended that Article 7(2) permits an allowance to be paid in lieu of paid annual leave.

36.	Mr Petts submits that the effect of Fed Ned, WTD and WTR is that pay in lieu of annual leave applies only to the final year of employment.  Thus, he contends, the Claimant was only entitled under her contract to the balance of leave not taken each year over and above the statutory minimum (6 out of 30 days) and that not taken in the final year.

37.	We reject that submission.  Accepting that he is correct in his interpretation of the WTD and reg. 13(9) WTR, this is not a claim under the WTR but under contract.  However, para. 29 of the Court’s judgment makes it clear that it is only where the employment relationship is terminated that Art. 7(2) permits an allowance to be paid in lieu of annual leave.  Neither Art 7(2), nor Fed Ned (which was not concerned with post-termination payments) limits the amount of pay in lieu of leave recoverable under a contract of employment post-termination.  It follows, in our judgment, that insofar as the Claimant’s contractual right is to recover all past leave pay in lieu, not simply that in the final year of employment, that provision is more favourable to the Claimant than her rights under WTR reg. 13(9) and thus is permissible under reg. 17.  There is no breach of the provisions of the WTR so as to engage reg. 35(1)(a).

38.	If there was the slightest doubt about our interpretation above, and we have none, it is resolved by the subsequent ‘Ainsworth litigation’, to which we have also been referred.

39.	The issue which arose in Ainsworth was whether certain employees of the IRC (now HMRC) who had been on long term sick leave were entitled to statutory holiday pay after their sick pay entitlement was exhausted either during employment under reg. 13 WTR or, following termination, under reg. 14.  One of the employees claimed arrears of holiday pay under the ‘Wages Act’ provisions of the ERA (ss. 13 & 23).  An employment tribunal upheld their claims and the EAT (Burton P presiding) dismissed the employer’s appeal without hearing argument, relying on the earlier EAT decisions in Kigass v Brown [2002] ICR 697 and List Design v Douglas [2002] ICR 6686, which held that such claims could be brought under the ERA, with its more favourable limitation provisions than are to be found in WTR.  I followed that reasoning in Canada Life v Gray [2004] ICR 573.

40.	The President, in Ainsworth, granted permission to appeal and on appeal the Court of Appeal [2005] ICR 1149] allowed the employer’s appeal.  Giving the leading judgment Maurice Kay LJ held, overruling Kigass, that a worker on long term sick leave was not required to work whilst sick and was thus not entitled to paid holiday under the WTR and further, overruling List Design and Canada Life, that claims under the WTR could be brought only under reg. 30 of those regulations and not under the ERA.

41.	The matter then proceeded to the House of Lords, which referred certain questions to the ECJ.  The Court’s ruling, sub nom. Stringer v HMRC [2009] IRLR 213, resolves among others, a question as to the effect of Art. 7(2) WTD on the rights of long-term sick employees.  That reference was combined with the German case of Schultz-Hoff (C-350/06) in which the employee was on continuous sick leave from 2004 until his employment was terminated in September 2005.  He claimed pay in lieu of annual leave not taken in 2004 and 2005.

42.	We would draw attention to two observations made by the Advocate General in his opinion in Schultz-Hoff.  The first is at footnote 59 to para. 70 of that opinion, where he refers to the unlawful practice of ‘redeeming’ leave during an existing employment relationship, citing Fed Ned and various learned articles;  by contrast, at para. 71 of his opinion, he makes the point that the allowance in lieu (of leave) is intended, in principle, to enable a worker, even following termination of the employment relationship, to take a period of paid rest before embarking on a new employment relationship, repeating words to that effect in the Advocate General’s opinion in BECTU [2001] IRLR 559 (ECJ), which case was cited in the Court’s judgment in Fed Ned at para. 29.

43.	Turning to the judgment in Stringer, at paras. 53-62 the Court answers the question as to whether, in the case of long-term sick employees, Art. 7(2) WTD requires that pay in lieu of leave not taken carries forward to termination of the employment relationship.  It does.  That is the relevant consideration for our purposes, as Ms Iyengar submits; not the holding at paras. 42‑43 on which Mr Petts relies, that it is open to a member state to introduce a ‘use it or lose it’ rule for the carrying over of leave entitlement.  As we have earlier commented, and as the Employment Tribunal in this case recognized, this is a claim in contract, not one made under the WTR.

44.	The Ainsworth litigation has since returned to the House of Lords [2009] UKHL 31. (10 June 2009).  The Court of Appeal decision was reversed and the EAT jurisprudence restored.  Mr Petts seeks to draw comfort from observations made in the speech of Lord Rodger of Earlsferry (paras. 11-13).  We find no assistance for him there.  That passage deals with the effect of WTR on a worker’s right to carry forward leave; an answer to a claim under the Regulations, but not this claim under the (more favourable) contractual term relied on in this case.

Conclusion

45.	It follows, for these reasons, that this appeal fails and is dismissed.