Web viewIt follows that holiday pay and annual leave pay form a context which requires that the word...

Lesson no. 6

Ref: 08 CX Judgment

FACV No.5 of 2012

IN THE COURT OF FINAL APPEAL OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

FINAL APPEAL NO. 5 OF 2012 (CIVIL)

(ON APPEAL FROM CACV NO. 92 OF 2010)

_____________________

Between :

CATHAY PACIFIC AIRWAYS LIMITED Appellant

and

KWAN SIU WA BECKY

WU YEE MEI VERA

HO KIT MAN JENNY 1st Respondent

2nd Respondent

3rd Respondent

____________________

Before: Chief Justice Ma, Mr Justice Bokhary PJ,Mr Justice Chan PJ, Mr Justice Ribeiro PJ and Lord Neuberger of Abbotsbury NPJ

Date of Hearing: 6 September 2012

Date of Judgment: 26 September 2012

________________________

JUDGMENT

________________________

Chief Justice Ma :

A INTRODUCTION

1. A number of aspects of employment law relating to holiday pay and annual leave pay fall to be determined in this appeal. The ordinance which has to be considered is the Employment Ordinance Cap 57 (“the EO”) as it stood prior to the Employment (Amendment) Ordinance 2007. The particular provisions are the former ss 41 and 41C. In the determination of the issues in the appeal, it will also be necessary to clarify the decision of the Court in Lisbeth Enterprises Ltd v Mandy Luk (2006) 9 HKCFAR 131. Clarification of this decision is required, particularly in the light of the way the courts below (and other courts) have treated it.

2. The EO was amended in 2007 following the decision in Lisbeth. Although the statutory provisions relating to holiday pay and annual leave pay have been amended (the amended ss 41 and 41C do not fall to be considered in this appeal), the old provisions (which I shall simply refer to in the remainder of this judgment as ss 41 and 41C) continue to apply to contracts of employment made prior to the 2007 amendments. In the appellant’s application for leave to appeal, it was contended that over 4,000 other employees of the appellant were employed on the same or similar terms as the respondents and therefore await the result of the present appeal. It is said that the judgment of this Court will be determinative of those cases. It was for these reasons that the Appeal Committee granted leave on 23 February 2012 on three questions which reflected (as the appellant contends) the errors made by the Court of Appeal.

3. These three questions were as follows:-

“1. The Court of Appeal erred in holding:

(1) that Line Duty Allowance (“LDA”), Ground Duty Allowance (“GDA”) and Duty Free Sales Commission (“DFSC”) should be included in the calculation of statutory holiday pay and statutory annual leave pay (under, respectively, s.41 and s.41C of the Ordinance[1]);

(2) that, where the contracts of employment provide for periods of annual leave in excess of those prescribed by the Ordinance, in the absence of provision to the contrary, the parties must be taken to have intended that the statutory rate of annual leave pay (under s.41C of the Ordinance) would apply to the excess contractual annual leave period;

(3) that Jenny Ho had worked overtime and in remitting to the Labour Tribunal the question of whether she earned overtime pay in such sum as to fall within the second limb of the exception to s.2(2) of the Ordinance, for the purpose of computing her statutory holiday pay under s.41 of the Ordinance.

4. As can be seen, the questions arise from the decision of the Court of Appeal in their judgment dated 17 March 2011, on appeal from the decision of Stone J dated 6 November 2009 (who had in turn heard an appeal from the decision of the Labour Tribunal dated 12 January 2009).

5. Before dealing with the relevant statutory provisions and facts in the present case, I can quickly dispose of the third question relating to overtime. It would appear that the discussion on the aspect of overtime and the order to remit to the Labour Tribunal came from the Court of Appeal entirely of its own initiative. The appellant has appealed that order and the respondents now support the appellant’s position (they had adopted a neutral position in their written Case). No question of principle arising, I am content to allow

the appeal on this aspect and set aside the order to remit the question of overtime to the Labour Tribunal.

B THE RELEVANT STATUTORY PROVISIONS

6. As stated above, we are concerned in the present appeal with the EO prior to the 2007 amendments, and specifically with those provisions relating to holiday pay and annual leave pay. The references made in this judgment to provisions in the EO refer of course to the old EO. There are similarities in the present (post-2007 amendments) version, but, as I have said earlier, the current statutory provisions do not fall to be considered in this appeal.

7. Part VIII of the EO is headed “HOLIDAYS WITH PAY”. Section 39 sets out the 12 statutory holidays (such the Lunar New Year Holidays etc) to which every employee is entitled. Section 40 provides that an employee who has been employed under a continuous contract of three months prior to a statutory holiday, will be entitled to holiday pay for that holiday. The rate of holiday pay is dealt with s 41, this being one of the two provisions engaged in the present appeal:-

41 Rate of holiday pay

“(1) Holiday pay shall be a sum equivalent to the wages which the employee would have earned on a full working day. (Amended 41 of 1990 s.18)

(2) Notwithstanding subsection (1), where an employee is employed on piece rates or where the daily wages of an employee vary from day to day, the holiday pay shall be a sum equivalent to the average daily wage earned by the employee, and for the purposes of this subsection the average daily wage shall be the average of the daily wages earned by the employee on each day on which he worked during every complete wage period, comprising not less than 28 days and not more than 31 days, immediately preceding or expiring on the holiday or first day of the holidays.”

8. Part VIIIA of the EO deals with “ANNUAL LEAVE WITH PAY”. Annual leave is the leave which an employee is entitled beyond the statutory holidays, rest days and maternity leave. Section 41AA provides that, just as in the case of statutory holidays under s 41, an employee (who has been employed under a continuous contract of not less than 12 months) should be entitled to be paid for each day of annual leave. A formula is provide in s 41AA setting out the number of days of paid leave to which an employee is entitled, ranging between seven and fourteen days, dependent on the number of years of service. I would observe here that the EO sets out the minimum period of annual leave pay to which an employee is entitled. Individual employers may (and often do) allow more annual leave, as the appellant has done in relation to the respondent, but employers cannot go below the statutory minimum.

9. Section 41C provides for the rate of annual leave pay (this is the other provision directly engaged in the present appeal):-

41C Rate of annual leave pay

“(1) Annual leave pay shall, subject to subsection (2), be a sum equivalent to the wages which the employee would have earned if he had worked every day during the period of annual leave.

(2) Where an employee is employed on piece rates or where the wages of an employee vary from day to day, the annual leave pay shall be calculated by reference to the average daily wage earned by the employee, and for the purposes of this subsection the average daily wage shall be the average of the daily wages earned by the employee on each day on which he worked during every complete wage period, comprising not less than 28 days and not more than 31 days, immediately preceding or expiring on the first day of the annual leave or on the day on which the contract of employment terminates, as the case may be.”

10. Sections 41 and 41C are virtually identical in wording. Both sections will have to be analyzed in due course. For the time being, I draw attention only to the definition of “wages”. This is to be found in the definition section of the Ordinance: s 2. Section 2(1) defines wages in the following way:-

“(1) In this Ordinance, unless the context otherwise requires -

….

“wages” (工資) subject to subsections (2) and (3), means all remuneration, earnings, allowances including travelling allowances and attendance allowances, attendance bonus, commission, overtime pay, tips and service charges, however designated or calculated, capable of being expressed in terms of money, payable to an employee in respect of work done or to be done under his contract of employment, but does not include-

(a) the value of any accommodation, education, food, fuel, light, medical care or water provided by the employer;

(b) any contribution paid by the employer on his own account to any retirement scheme;

(c) any commission which is of a gratuitous nature or which is payable only at the discretion of the employer; (Replaced 74 of 1997 s.3)

(ca) any attendance allowance or attendance bonus which is of a gratuitous nature or which is payable only at the discretion of the employer;

(cb) any travelling allowance which is of a non-recurrent nature;

(cc) any travelling allowance payable to the employee to defray actual expenses incurred by him by the nature of his employment

(cd) the value of any travelling concession;

(d) any sum payable to the employee to defray special expenses incurred by him by the nature of his employment;

(da) any end of year payment, or any proportion thereof, which is payable under PartIIA;

(e) any gratuity payable on completion or termination of a contract of employment; or

(f) any annual bonus, or any proportion thereof, which is of a gratuitous nature or which is payable only at the discretion of the employer;”

It is a definition in very wide terms, restricted only by the situations enumerated in sub-paras (a) to (f) thereof.

11. For the purposes of ss 41 and 41C, wages should be given their statutory meaning. In Lisbeth, this Court also considered these

same provisions. Nothing in the judgment of the Court in that case suggests that the reference to wages in these sections would in any way exclude the statutory definition. I shall return to that decision presently. I must first deal with the facts of the present case germane to the two questions and the relevant statutory provisions.

C THE RELEVANT FACTS RELATING TO THE QUESTIONS

12. The appellant is Cathay Pacific Airways Ltd (“Cathay”). The three respondents were at all material times employees of Cathay. Where convenient to do so in this judgment, I shall refer to them as Ms Kwan (Kwan Siu Wa Becky), Ms Wu (Wu Yee Mei Vera) and Ms Ho (Ho Kit Man Jenny). The respondents were apparently chosen as being representatives of particular classes of Cathay employees. Ms Kwan joined Cathay in 1975 first as a Junior Flight Hostess. She was promoted to Chief Purser on 1987 (later this title was renamed Inflight Services Manager). Ms Wu joined in 1995 as a Cabin Attendant and was promoted to the position of Purser in 2000. Ms Ho joined in 2005 as a Flight Attendant of the Inflight Services Department.

13. Each of the respondents is paid a basic salary under her contract with Cathay. The terms of the individual contracts for the respondents vary but have this feature in common: apart from the basic salary, provision is made for the payment of various allowances, bonuses and benefits.

14. The first question on which leave to appeal was given relates to Line Duty Allowance (“LDA”), Ground Duty Allowance (“GDA”) and Duty Free Sales Commission (“DFSC”). These allowances and

commission are contractual. The appellant’s written Case describes them in the following way:-

“24. LDA is essentially an allowance paid to cabin attendants for time spent while on flying duties. Time begins to run when the cabin crew reports for flying duty and finishes when the engine is turned off at the end of the final sector flown. LDA varies based on the flight that the cabin crew is rostered to operate and the length of time spent on the flight. LDA is calculated down to the minute. No two flights produce the same amount of LDA.

25. GDA is essentially an allowance paid to cabin attendants for time spent on the ground preparing to fly (such time being calculated from the time when the cabin attendants are required to report for duty until the time when the aircraft commences to move under its own power) and time spent on the ground immediately after landing. GDA is also calculated down to the minute.

26. DFSC is a commission paid to the cabin attendant based on the inflight duty free sales she has achieved. DFSC is earned at a rate of 3.5% of each sale made. The commission is paid at the end of the month following the sale. The commission is discounted by any late payment of bar cash, discrepancies, lost credit card payments etc. There is also a system of incentives in the form of awards, an award being given to the top team with the best inflight sales performance and individuals receiving awards for top performance. The awards are earned on a quarterly basis and made or paid 3 months after the end of each quarter.”

15. LDA is relevant only to Ms Kwan and Ms Wu. GDA and DFSC apply only to Ms Ho.

16. Under the first question, a consideration of LDA, GDA and DFSC is relevant to the calculation of both statutory holiday pay (under s 41) and statutory annual leave pay (under s 41C). Can they be taken into account? The appellant says no, the respondents contend that they should be taken into account in the computation of statutory holiday pay and statutory annual leave pay.

17. In relation to the second question, the particular feature common to all three respondents is that under their contracts of employment with the appellant, each respondent was entitled to more annual leave days than the statutory minimum. Ms Kwan and Ms Wu were entitled to five weeks’ paid annual leave, Ms Ho to three weeks.

18. The issue under the second question boils down to this: while the rate of annual leave pay applicable to the statutory period of annual leave (that is, the minimum period of annual leave required under s 41AA) will be governed by s 41C, what rate will govern the excess period (the amount of annual leave given by the employer beyond the statutory minimum)? The appellant submits that in relation to the excess, the rate of pay should be referable to the basic salary. The respondents contend that the rate of pay applicable to the excess is the same as for the statutory period of annual leave (because, if they are right in their submission under the first question that LDA, GDA and DFSC should be taken into account, this would entitle them to a larger amount of annual leave pay).

19. A consideration of the second question will involve looking into the contracts of employment between the parties; the applicable rate of pay for annual leave in respect of this excess period will be

determined according to the contract between the parties and not by reference to any statutory provisions. The respondents contended that as a matter of contract, they ought to be paid at the same rate as that prescribed by s 41C. On the other hand, the appellant submits that regarding Ms Kwan and Ms Wu, the effect of their contracts would impliedly suggest that they ought to be paid only at the basic salary rate for the excess period. In relation to Ms Ho, the appellant submits that under her contract of employment, express provision has already been made for payment of her annual leave so that she is not entitled to the paid anything more for the excess period. In relation to all three respondents, the appellant of course accepts that it will have to make payment in relation to the statutory period of leave according to ss 41 and 41C.

D DETERMINATION OF THE FIRST QUESTION: RATE OF HOLIDAY PAY AND ANNUAL PAY UNDER THE EO

20. Before applying ss 41 and 41C of the EO to the facts in the present case, I think it important first to set out the effect and meaning of these provisions (which, as observed earlier, are virtually identical and can therefore for present purposes be considered together):-

(1) As a general approach to statutory interpretation, particularly where a piece of legislation deals with a subject matter which most people would expect to be dealt with in a common sense and purposive manner (and I would put holiday pay and annual leave pay in this category), the Court should aim to arrive at an interpretation that, as far as the wording of the legislative provision in question will allow, will accord with such common sense and which can be easily applied. I mentioned this approach at the outset because I believe (as shown by the various judgments in the

courts below and in other decisions), there has been some misunderstanding of the Lisbeth decision of this Court.

(2) The objective of ss 41 and 41C is obviously to ensure that an employee will be paid for every statutory holiday or of annual leave, to which he or she is entitled. As to the precise amount the employee is entitled to receive, the answer lies in ss 41(1) and 41C(1): for every statutory holiday or day of annual leave, the pay should be an amount which the employee would have earned on a full working day (s 41(1) refers to “full working day” whereas s 41C(1) states “if he had worked every day”, but there is no material difference here). This is of course to be taken as a notional working day because the employee of course does not actually work on the particularly day in question (whether it is a statutory holiday or a day out of the employee’s annual leave).

(3) Where an employee merely earns a monthly salary without any additional allowances or other items which can make up an employee’s earnings (which is the most common situation), the calculation of this notional working day is straightforward. As Mr Mark Strachan (for the appellant) stated (and this was not disputed by Mr Martin Lee SC for the respondents), one would simply take the annual salary of the employee and divide by 365 to arrive at the daily rate for the purposes of ss 41(1) and 41C(1). This method (by reference to 365 days) is sensible as it avoids the complications arising from months in the year having different days (I leave aside any complications arising from leap years). Weekends, statutory holidays and other leave days are included. There is no reason to exclude such days from the calculation because employees on a monthly or annual salary are paid for such days even if they do not work on the particular day. This is to be contrasted with the position of, say, most casual workers: these types of workers are generally engaged (and paid) on the days they actually work.

(4) However, where an employee is employed on piece rates (this is not relevant in the present appeal) or where the daily wages of an employee vary from day to day, the calculation of the notional working day will involve more than just a straightforward division of the employee’s basic salary. There are many situations in which an employee’s salary may vary from day to day. For example, an employee may earn commissions over and above his or her basic salary or the employee may earn bonuses or tips: all such items (which can be included as part of an employee’s wage: see the definition of “wages” in s 2(1) of the EO (para 10 above)) will often mean that the wages of an employee may vary from day to day. How then in such situations, is the notional working day under s 41(1) and 41C(1) to be ascertained?

(5) The answer lies in ss 41(2) and 41C(2). As those subsections make clear, the wage that an employee would have earned on the notional full working day is arrived at by taking an average of the daily wages earned by the employee “on each day on which he worked during every wage period.” The term “wage period” refers to that period comprising not less than 28 days and not more than 31 days immediate preceding or expiring on the relevant holiday or first day of the holidays (in relation to s 41), or immediately preceding or expiring of the first day of the annual day (where annual leave pay is concerned. I ignore in this context the reference to the position where a contract of employment terminates. The reference to 28 days and 31 days is clearly a reference to the different number of days in different months.

(6) The term “on each day on which he worked during every wage period” means, in the case of a monthly employment, each day of the relevant wage period; as we have seen in the case of an employee who is simply paid a basic monthly salary, an employee is paid for each day of the period, notwithstanding that he or she may not actually be working on certain days (for example during

weekends or during statutory holidays). It would be odd indeed, not least from a common sense point of view, if, in the case of a monthly employment, it were to be thought that an employee would only be paid for those days he or she actually worked in the month. Employees engaged on monthly basis (which all three respondents were) are generally to be treated as being paid for each day of that month.

(7) A simple example may help in the understanding of how ss 41and 41C, operate in practice. Take an employee, ‘X’ I shall call this person, who earns $30,000 a month as a basic salary. X works five days a week. X also earns commission on top of his basic salary but the amounts so earned vary from day to day. What would be his statutory holiday entitlement for July 2 this year (the day after HKSAR Establishment Day)? Section 41(2) is applicable in view of the fact that his daily wages vary. The wage period (from June 1 (midnight) – July 1, the day preceding July 2 holiday) is 30 days. As we have seen, A’s basic monthly wage is $30,000, but he also earned, say, $15,000 as commission over that period. The calculation of his statutory holiday pay (for July 2) is accordingly $45,000 ÷ 30 = $1,500. If on the other hand, X earned no commission but merely the basic monthly salary of $30,000, his entitlement would be: $360,000 (his annual salary) ÷ 365 = $986.

(8) I should also add this. The above analysis of ss 41 and 41C, is I believe consistent with common sense, taking into account for the purposes of computing a daily wage all amounts which properly come within the statutory definition of wages in s 2(1) of the EO. Nothing in ss 41 or 41C suggests any other approach.

21. Applying this analysis of ss 41 and 41C to the facts of the present case, I am of the view that LDA, GDA and DFSC clearly fall

to be taken into account in the calculation of statutory holiday pay and statutory annual leave pay:-

(1) The nature of these allowances and commission (see para 14 above) is such that they fall within the definition of “wages” in s 2(1) of the EO. The statutory definition of “wages” is, as we have seen, in wide terms and, in its express reference to allowances and commission, will cover LDA, GDA and DFSC. Mr Strachan accepted that LDA, GDA and DFSC came within the definition of “wages” under the EO, but advanced a number of submissions to which I shall have to return.

(2) As LDA, GDA and DFSC by their nature were not amounts of money that were earned by the respondents on every working day, it follows from this that the respondents’ daily wages varied from day to day. This was common ground. Sections 41(2) and 41C(2) are therefore applicable.

(3) Under these provisions, the applicable rate of holiday pay or annual leave pay (as the case may be) would consist of the average daily wage calculated using the formula set out in these provisions. In the case of the respondents, this would involve taking the basic monthly salary of each respondent, adding to this salary any applicable DFA, GDA and DFSC and then arriving at the average daily wage by dividing these sums by the number of days in the relevant wage period.

22. Mr Strachan raised 4 arguments to suggest that LDA, GDA and DFSC should not be taken into account in the computation of holiday pay and annual leave pay. As I understood them : -

(1) First, as a matter of construction, ss 41 and 41C could only be read as applying to basic salary and could not cover additional payments such as LDA, GDA or DFSC. Reliance was placed on that part of the judgment in Lisbeth where it was said (in para 23 at 142A-B) in the context of ss 41(2) and 41C(2) that “the term ‘daily wages’ applies only to wages in the sense of salary”.

(2) Secondly, LDA, GDA and DFSC lacked what Mr Strachan referred to as the “requisite quality of dailiness”, meaning that the “average daily wage” referred to ss 41(2) and 41C(2) could only refer to wages that “accrued and are calculated on a daily basis”. None of the two allowances nor DFSC had this quality as they did not accrue nor were they calculated on a daily basis. Reliance was again placed on the judgment in Lisbeth where at para 24 (at 142B-D), it was said:-

“24. What then would supply the requisite quality of dailiness? Wages may not have to be paid on a daily basis before they can be regarded as “daily wages”. But I do not see how wages can be so regarded unless they at least accrue and are calculated on a daily basis. Subject therefore to the possibility that ss.41(2) and 41C(2) can be read to cover contractual commission accruing and calculated on a daily basis in amounts varying from day to day, those subsections do not cater for commission. It follows that holiday pay and annual leave pay form a context which requires that the word “wages” be read as excluding commission save possibly for commission accruing and calculated on a daily basis in amounts varying from day-to-day.”

(3) The third point was that nothing in the two sections permitted a situation in which both a basic salary and additional payments such as LDA, GDA or DFSC could be taken into account. This was essentially the same point as the first argument, but the particular

submission here proceeded on the assumption that ss 41(1) and s 41C(1) operated separately and alternatively to ss 41(2) and 41C(2). According to Mr Strachan, sub-section (1) applied to the situation where there was a basic salary without any additional payments; here, the basic annual salary could simply be divided by 365. Subsection (2) could not apply to cover situations where payments such as LDA, GDA and DFSC existed, because if it did, an approach inconsistent with that adopted for sub-section (1) situation would be created, in that the relevant sums would be calculated by reference, not to 365 days (which would cover days in which the employee did not work such as weekends etc) but only the days that the employee actually worked. The point was presumably that in order to achieve consistency, only a basic salary could be taken into account under ss 41 and 41C.

(4) Finally, calculating holiday pay or annual leave pay by reference to LDA, GDA and DFSC was unworkable. This argument proceeded on the assumption that it was very difficult, if not impossible, to know which days the respondents could be said to have been working for the purposes of ss 41(2) and 41C(2). Paras 63 and 64 of the appellant’s written Case puts it in the following way:-

“63. LDA, GDA and DFSC are not earned every day in any particular wage period. So should the whole month immediately preceding the holiday/the first day of annual leave be counted as working days for the Respondents? Or should only those days on which the Respondents were required to perform duties (in air and on ground) be counted as working days? Should only those days on which Becky Kwan and Vera Wu are required to perform air duties (but not on the ground) be counted as their working days (as LDA is payable for time in the air)? Should only those days on which Jenny Ho is required to perform duties on the ground (but not in the air) be counted as her working days (as GDA is payable for time on the

ground preparing to fly etc)? Similar questions arise from the fact that DFSC, also, is earned only spasmodically.

64. Similarly it is unclear whether the days on which the Respondents were scheduled for “stop over in outports” or “standby duties” should be counted as working days.”

23. In my view, none of these arguments can be supported.

24. For the argument set out in para 22(1) above, it simply ignores that plain words contained in the definition of “wages” in s 2(1) of the EO. Wages can encompass much more than just the basic salary. The sentence relied on by the appellant from the judgment in Lisbeth (at para 23) is not authority for the proposition advanced.

25. As for the argument in para 22(2) above, this requires a little more discussion of the Lisbeth decision. The particular paragraph in the judgment (para 24) relied upon by Mr Strachan, cannot, in my view, be taken in isolation. I cannot for one moment believe that sight had been lost either of the wide meaning of “wages” in s 2(1) of the EO, or, more important, of the precise wording of ss 41(2) and 41C(2) and their effect. As analyzed above, the purpose of these subsections is to enable the wages that an employee would have earned on the notional working day to be computed, and the way the computation is made is through the averaging exercise set out in those provisions. There is no question (much less any necessity) to require in addition, on a daily basis, what wages or items which go towards such wages (such as commission or allowances) actually accrued or whether a calculation could be made. As mentioned above, the exercise is an averaging exercise taking into account all the wages earned by the employee during the relevant wage period.

The exercise simply does not require any inquiry to what happened on a daily basis.

26. For my part, I do not think it is either helpful or desirable to introduce the term “dailiness” into ss 41 and 41C. Of critical importance in my view is the need to look at the actual wording of these provisions and discover their true intent and effect (as I have attempted to do in para 20 above). With respect, this was all I think was intended to be said in para 24 of the Lisbeth. However, insofar as it may be thought that the said passage did introduce an additional requirement of accrual and calculability on a daily basis (the element of “dailiness”), I would take this opportunity to say that such a view is wrong. In my judgment, from now, one ought to discard the use of the term “dailiness” altogether.

27. I have earlier mentioned the reliance placed on the Lisbeth decision by the courts below. It is clear that the courts regarded the dailiness factor as an additional requirement of ss 41(2) and 41C(2): see for example the judgment of Stone J at paras 63 and 64; the judgment of the Court of Appeal at paras 17 to 24 and 71. Other cases have similarly applied the dailiness factor. See for example the decision of the Court of Appeal in Lam Pik Shan v Hong Kong Wing On Travel Service Ltd [2008] 3 HKC 578. As I have observed in the previous paragraph, it is wrong to regard Lisbeth as being authority for the proposition that there is this additional requirement of dailiness.

28. The third argument (in para 22(3) above) proceeds on the wrong assumption ss41(1) and 41C(1) involve alternative and different situations to that covered by ss 41(2) and 41C(2). Quite the contrary. Both ss(1) and (2) must be read together in the way described in para 20 above. No inconsistency in approach is involved in the way that the provisions should be construed

together. Whether the applicable wages comprise only a basic salary or where there are additional payments to be considered as well, there is simply no real difficulty in applying ss 41 and 41C in the way set out in para 20 above.

29. As for the fourth point (para 22(4) above, once the meaning of “on each day on which he worked” in ss 41(2) and 41C(2) is properly understood (see para 20(6) above), the difficulties highlighted by the appellant disappear.

30. It is clear that the courts below had difficulties in dealing with this Court’s judgment in Lisbeth. The key, in my view, is really to bear in mind at all times the true meaning and effect of the relevant statutory provisions. Lisbeth, on its facts, involved the question of commission earned by an employee: in that case, the commission earned by a beauty consultant at a health and beauty club for selling beauty products to customers. On the facts of the case, it would appear that the commission payable to the employee was changeable by the employer without notice (see para 4 of the judgment at 135D) and that commission simply could not be calculated for the purposes of ss 41 and 41C (hence the emphasis on unworkability in the judgment). I am inclined to treat the decision of Lisbeth as a case decided really on its own particular facts. It is certainly not an authority for the proposition that commission, even if calculated on a monthly basis, is excluded from the definition of “wages” for the purposes of ss 41 and 41C. Such a conclusion would be contrary to the definition of “wages” in the Ordinance.

31. Additionally, I would like to draw attention to the passage in the judgment in Lisbeth in which there is some discussion about the qualifying phrase at the beginning of the definition section of the EO (s 2(1)) “unless the context otherwise requires (see paras 16-18 of

the judgment). I have already briefly mentioned this aspect in para 11 above. The conclusion in Lisbeth appears to be that the commission in that case did not come within the statutory definition of “wages” by reason of this qualifying phrase. I take this opportunity to stress that, in my view, these qualifying words in s 2(1) can only refer to the context of the Ordinance itself; in other words, the definitions contained in the definition section will apply to the other provisions in the Ordinance unless in the context of the Ordinance itself, a different meaning should be given. It should not be thought that these qualifying words, which are common in most definition provisions in a statute, are of any application outside the confines of the relevant statute. Of course, provisions in a statute may or may not be applicable to any given set of facts, but this is simply construing the effect of the relevant statutory provision and then applying it. A definition provision may itself have to be construed, and where, a set of facts do not come within a statutory definition, this will be a consequence of construing the definition clause rather than because of the qualifying words “unless the context otherwise requires.”

32. In Lisbeth, this Court held that the commission earned by the beauty consultant did not come within the definition of “wages” in s 2(1) of the EO. This was because, as I have said earlier in para 30 above, the commission simply could not be calculated and such commission was in any event under the contract of employment in that case changeable by the employer without notice. This may have added to the difficulties in calculating commission and may well even have taken the commission outside the definition of “wages” in s 2(1) (any commission that is of a gratuitous nature or which is payable only at the discretion of the employer is excluded from the definition of wages; see para (c) to the statutory definition: para 10 above). In other words, on analysis, the payments received by the beauty consultant were not the type of commission that constituted wages at all or even if they did, they could not be calculated.

33. The first question falls to be answered in the following way: LDA, GDA and DFSC are to be included for the purposes of calculating statutory holiday pay and statutory annual leave pay under ss 41and 41C of the EO.

E DETERMINATION OF THE SECOND QUESTION: THE EXCESS PERIOD OF ANNUAL LEAVE

34. As observed above, the determination of this question which relates to what I have called the excess period (that is, the period of annual leave beyond the statutory leave period), is wholly dependent on the true construction of the relevant contracts of employment between the appellant on the one hand and the respondents on the other.

35. In relation to Ms Kwan and Ms Wu, the determination of the second question can be disposed of shortly. Both Ms Kwan and Ms Wu’s contracts provide for an entitlement to annual leave and that such leave should be “paid leave” : see cl 16(A) of the Cathay’s Conditions of Service (1986 version) in the case of Ms Kwan, cl 12(A) of Cathay’s Conditions of Service (1993 version) in the case of Ms Wu. Nothing in these contracts makes a distinction between statutory leave and excess, much less a distinction in the rate of payment for such leave and any excess period of leave. The contractual intention can therefore be assumed to favour the same rate of pay irrespective of whether such relates to the statutory annual leave or to the contractual annual leave.

36. Mr Strachan submitted that the contracts of employment (of Ms Kwan and Ms Wu) impliedly provided that there should be different

computations of leave pay as between statutory leave and the excess period. We were not taken to any provision in the contracts that remotely suggested this result; as shown above, quite the contrary. Additionally, reliance was placed on concepts such as the parties having contracted on the basis of the law as it previously stood and estoppel by convention. It is sufficient to say that they were not sustainable arguments and in fairness, not really pursued before us.

37. Accordingly, for Ms Kwan and Ms Wu, they are entitled to be paid for the excess period at the same rate of annual leave pay under s 41C of the EO.

38. Different considerations, however, apply to Ms Ho. In her case, it was submitted by Mr Strachan that she was in any event not entitled to any annual leave pay by reason of the fact that she had already been paid under her contract of employment in relation to such leave.

39. Here, it becomes necessary to examine the terms of her employment with the appellant. The applicable conditions of service in her case are the 2003 version. Under these Conditions:-

(1) Ms Ho’s salary was calculated by reference to what was called the Minimum Guaranteed Flying Pay (“MGFP”) (cl 3.1), which, according to the Notes to the Conditions meant 70 “block hours” a month.

(2) The term “block hours” in the contract comprised not only the hours of actual working time but also so-called credits. Such credits

included the time used, for example, attending training courses or the time taken up by various duties (these were called work credits). Other credits included leave credits and, in the context of the present case, they are important: these are the credits given in respect of items such as annual leave.

(3) Credits, whether work credits or leave credits, are converted into block hours. Crucially, in the case of Ms Ho, each day of annual leave equated to 3.25 block hours (under para 2 of the Notes to the Conditions, this conversion to block hours was directly referable to “Paid annual leave”).

(4) We are told that Ms Ho was in fact paid for the 70 hours MGFP irrespective whether or not she actually worked or earned any credits.

40. From this analysis of her contract of employment, it can readily be seen that Ms Ho would effectively have been paid for each day of her annual leave (in the form of leave credits, at 3.25 block hours a day). And the evidence before us does show that she has actually been credited in this way for her annual leave. Accordingly, I agree with Mr Strachan when he submits that, in relation to the excess period, Ms Ho cannot be entitled, as a matter of contract, to any further payments. Mr Lee was unable to counter this argument except to say that double-recovery by Ms Ho of annual leave pay in respect of the excess period, was somehow acceptable. I cannot agree with this submission.

41. Accordingly, for Ms Ho, I am of the view that she is not entitled to be paid any annual leave pay in respect of the excess period.

F CONCLUSION

42. To summarise, the three questions should be answered in the following way:

(1) Question 1: LDA, GDA and DFSC should be included for the purposes of calculating statutory holiday pay and statutory annual leave pay under ss 41 and 41C of the EO.

(2) Question 2:-

(a) The respondents, Ms Kwan and Ms Wu, are entitled to be paid for the excess contractual annual leave period at the same rate of annual leave pay under ss 41C of the EO.

(b) The respondent, Ms Ho, is not entitled to be paid any annual leave paid in respect of the excess period.

(3) Question 3: the order of the Court of Appeal remitting the question of overtime (in the case of Ms Ho) should be set aside.

43. Accordingly, the appellant’s appeal should be allowed in part. As to costs, these should be dealt with by way of written submissions, as to which the parties should seek the directions of the Registrar.

Mr Justice Bokhary PJ and Mr Justice Chan PJ:

44. This appeal between an airline and three cabin crew members in its employ raises a number of points of employment law. It affects the position of the airline and all its cabin crew members like these three. Cathay Pacific Airways Ltd (“Cathay”) is the appellant airline. The respondent cabin crew members are: Ms Becky Kwan, an Inflight Service Manager; Ms Vera Wu, a Purser; and Ms Jenny Ho, a Flight Attendant. They each brought a claim against Cathay in the Labour Tribunal. Those claims were heard together. On 12 January 2009 the Labour Tribunal (Pang Ka Kwong, Esq) gave its decision on liability. That decision generated an appeal to the High Court by Cathay and cross-appeals to that court by Ms Kwan, Ms Wu and Ms Ho. On 6 November 2009 the High Court (Stone J) allowed the appeal and dismissed the cross-appeals. Ms Kwan, Ms Wu and Ms Ho then appealed to the Court of Appeal against the whole of the High Court’s decision. On 17 March 2011 the Court of Appeal (Tang Ag CJHC and Le Pichon and Cheung JJA) reversed Stone J’s decision in so far as he had allowed Cathay’s appeal and affirmed his decision in so far as he had dismissed Ms Kwan, Ms Wu and Ms Ho’s cross-appeals.

Leave to appeal on three questions

45. Leave to appeal to this Court was granted on three questions. Each involves the Employment Ordinance, Cap. 57, as it stood prior to the amendments made by the Employment (Amendment) Ordinance 2007. All the references in this judgment to sections will be to those of the Employment Ordinance prior to those amendments.

46. Those amendments were passed after this Court’s decision in Lisbeth Enterprises Ltd v. Mandy Luk (2006) 9 HKCFAR 131. Having regard to the reliance placed on that case by Mr Mark Strachan for Cathay in the present appeal, it is necessary to state the pivotal point in that case. And it is convenient to do so at once. Among the words defined by s.2, the interpretation clause, is the word “wages”. But, as is common with interpretation clauses, the section makes the meanings which it provides subject to what the context might otherwise require. The commission in the Lisbeth Enterprises Ltd case was of a special nature. So much so that including it in the calculation of statutory holiday pay or statutory annual leave pay would be unworkable. So the context required that wages do not include commission of that nature when it comes to such calculation. That is the point on which the Lisbeth Enterprises case turned.

47. The first of the three questions on which leave to appeal was granted concerns two types of allowance and one type of commission paid by Cathay to its cabin crew members. Should such allowances and commission be included when calculating statutory holiday pay due under s.41 and statutory annual leave pay due under s.41C? The two types of allowance concerned are Line Duty Allowance (“LDA”) and Ground Duty Allowance (“GDA”). As for the type of commission concerned, it is Duty Free Sales Commission (“DFSC”). The nature of LDA, GDA and DFSC may be taken from paras 24-26 of Cathay’s printed case which read:




48. Cathay had not included LDA, GDA and DFSC when calculating statutory holiday pay and statutory annual leave pay. Nor had Cathay included the type of allowance called Outport Allowance (“OA”) which is paid as a pre-estimate of the costs of meals and services at layover ports. Ms Kwan and Ms Wu who receive LDA and OA contended that LDA and OA should be included when calculating statutory holiday pay and statutory annual leave pay. As for Ms Ho, she receives GDA, DFSC and OA. And she contended that GDA, DFSC and OA should be so included. Cathay contended that LDA, GDA, DFSC and OA should all be excluded.

49. The Labour Tribunal held that LDA, GDA and DFSC should be included but that OA should be excluded. Cathay appealed to the

High Court against the inclusion of LDA, GDA and DFSC. Ms Kwan, Ms Wu and Ms Ho cross-appealed against the exclusion of OA. Both courts below held that OA should not be included. And there is no appeal to this Court against such exclusion. As far as LDA, GDA and DFSC are concerned, Stone J held that they should be excluded but the Court of Appeal held that they should be included. Cathay appeals to this Court against such inclusion. Hence the first question, namely whether LDA, GDA and DFSC should be included.

50. We turn now to state the second question on which leave to appeal to this Court was granted to Cathay. It is whether, where contracts of employment between Cathay and employees like Ms Kwan, Ms Wu and Ms Ho provide for periods of annual leave pay in excess of those prescribed by the Employment Ordinance, the parties must be taken to have intended that the statutory rate of annual leave under s 41C would apply to such excess periods.

51. Ms Kwan, Ms Wu and Ms Ho contend, as they have throughout, that the statutory rate applies to excess periods while Cathay contends, as it has throughout, that the statutory rate does not apply to excess periods. The Labour Tribunal held that the statutory rate applies. Mr Justice Stone held that it does not. The Court of Appeal held that it does. Hence the second question, namely whether the statutory rate applies to excess periods.

52. We now turn to state the third question on which leave to appeal to this Court was granted to Cathay. It is whether the Court of Appeal was right in finding that Ms Ho might have worked overtime and right in remitting to the Labour Tribunal the question of whether she had earned overtime pay in such sum as to fall within the second limb of the exception to s.2(2) for the purpose of computing her statutory holiday pay under s.41.

53. This question arises in the following way. Unlike Ms Kwan and Ms Wu who contend that they have not received all the statutory holiday pay due to them, Ms Ho contends that she has not received any statutory holiday pay at all. She says that this is so because she was employed on an hourly basis and that hourly cabin crew members were not paid for days without duties which coincided with statutory holidays. Cathay, on the other hand, contends that Ms Ho has received her statutory holiday pay. It says that this is so because she was employed on a monthly basis and her pay for any statutory holiday falling within any given month was therefore included in her salary for that month.

54. The Labour Tribunal held that Ms Ho was employed on an hourly basis and has not received any statutory holiday pay at all. Mr Justice Stone held that Ms Ho was employed on a monthly basis and that it is therefore incorrect to say that she has not received any statutory holiday pay at all. The Court of Appeal shared Stone J’s view that Ms Ho was employed on a monthly basis and that it is incorrect to say that she has not received any statutory holiday pay at all. Ms Ho does not appeal against that part of the Court of Appeal’s decision. The third question arose because the Court of Appeal went on to find that she might have worked overtime, and they remitted to the Labour Tribunal the question of whether she had earned overtime pay in such sum as to fall within the second limb of the exception to s.2(2) for the purpose of computing her statutory holiday pay under the second limb of the exception to s.2(2). Hence the third question, namely whether the Court of Appeal was right in so finding and ordering such remitter.

Complaint under the third question withdrawn

55. No one had asked the Court of Appeal to order that or any other remitter. Nothing had been said about a remitter during the hearing in the Court of Appeal. It was ordered on the Court of Appeal’s own initiative. In their printed case, Ms Kwan, Ms Wu and Ms Ho said that they adopted a neutral stance on the third question. Just before the luncheon adjournment and before Mr Strachan addressed this Court on the third question, Mr Martin Lee SC for Ms Kwan, Ms Wu and Ms Ho was invited to take instructions on whether they wished to join Cathay in seeking the setting aside of the remitter. At the commencement of the afternoon session, Mr Lee said that his clients joined Cathay in seeking a setting-aside of the remitter. Having regard to how the remitter came to be ordered, the appropriate course is to set it aside as both sides ask.

Answer to the first question

56. In submitting that LDA, GDA and DFSC are not to be included in the calculation of statutory holiday pay under s.41 or annual leave pay under s 41C, Mr Strachan puts forward three points.

57. His first point, which appears to be his main point, runs as follows. The first subsections of s 41 and s 41C (s 41(1) and s 41C(1)) deal with one type of employee, namely, an employee who receives the same salary for each working day. Such as an employee who is paid a monthly salary. This, he says, is not the case here. The second subsections of s 41 and s 41C (s 41(2) and s 41C(2)) deal with a different type of employee, namely, an employee whose wages vary from day to day. However, he argues that these subsections are not apt to cover – and are not intended to cover – the situation of a basic salary plus allowances or other payments, as is the case here. If it were otherwise, there would be no need for the first subsections since s 41(2) and s 41C(2) can cater for the situation of a basic salary as well as the situation of a

basic salary plus allowances or other payments. This, he submits, would also create an inconsistency in the amount of basic salary per day under the two sets of subsections since the calculation under the first subsections is based on what an employee would have earned whereas the calculation under the second subsections are based on the number of days on which the employee had actually worked.

58. Mr Strachan’s second and third points can be dealt with together. He submits that LDA, GDA and DFSC are not earned every day in any particular wage period and that this makes calculating statutory holiday pay and annual leave pay by reference to these allowances and this commission unworkable. In the calculation of the average daily wage, he asks rhetorically: should one take into account any part or the whole of a day on which the employee had worked or the whole of the immediately preceding month or only the days on which these allowances and commission were earned? He also argues that they cannot be characterized as “daily wages” because, he contends, they lack the requisite quality of dailiness.

59. We reject these submissions.

60. Section 39 confers on all employees an entitlement to statutory holidays. And s 40 provides that employees who have worked under a continuous contract (as defined in the Ordinance) for three months are entitled to holiday pay. Employees who have been employed under a continuous contract for not less than 12 months are, by virtue of s 41AA, entitled to paid annual leave according to their length of service. And s 41 and s 41C specify respectively the rate of statutory holiday pay and the rate of annual leave pay to which the employee is entitled. The intention of the legislation is clearly to enable an employee who has completed the length of

service required by s 39 and s 41AA to enjoy statutory holidays and annual leave without any financial detriment.

61. Both under s 41(1) and under s 41C(1), an employee’s entitlement is to a sum equivalent to what she would have earned if she had worked. In the case of a statutory holiday that equates to the wages of a full working day. And in the case of annual leave that equates to the wages for the annual leave period. These subsections usually apply to the situation where for example the employee is paid a monthly salary or a fixed or constant remuneration.

62. In the case of an employee who is employed on piece rates or whose daily wages vary from day to day, there would be days on which she may not be provided with any work and hence will not be paid any wages at all. There would also be days on which she is paid more than what she is paid on other days. In such a case, she falls within s 41(2) and s 41C(2) which provide as follows. The statutory holiday pay and the annual leave pay to which the employee is entitled shall be a sum which is to be calculated by reference to what she had earned in the immediately preceding period of 28 to 31 days (which is basically the previous month). And it is to be a sum equivalent to the average daily wage earned by such employee on each day on which she had worked during that period.

63. There are thus two questions for consideration in the application of s 41(2) and s 41C(2): first, whether the employee’s daily wages vary from day to day and if so, second, what are her statutory holiday pay and annual leave pay entitlements? It is only when it can be shown that the employee falls within s 41(2) and s 41C(2) (i.e. after the first question is answered in the affirmative)

that it is necessary to adopt the method of calculation to ascertain her entitlements under those provisions.

64. Reference to “daily wages” is made in s 41(2) and 41C(2) because we are concerned with the entitlement for each statutory holiday or each day during the annual leave period. However, these subsections do not require that the employee is paid a daily wage or that she works every day to come within the ambit of these provisions. Nor is there a requirement in the statute that there must be a “requisite quality of dailiness” in her wages or that they must “accrue and is calculated on a daily basis”. In so far as Lisbeth Enterprsies Ltd decided that there was such a requirement, this was done in the peculiar context of considering whether the commission in that case fell within these subsections. Such a general requirement is not supported by the wording of these provisions. What is required in order to invoke s 41(2) and s 41C(2) is that the employee’s daily wages vary from day to day and this usually happens where for example her wages consist of several components, some fixed and some varying from day to day (as in the present case). It is clear that s 41(2) or s 41C(2) are intended to apply to employees earning variable wages or a basic salary (a fixed component) coupled with other allowances or other payments (a variable component).

65. When considering whether an employee’s wages vary from day to day and if so, what are her entitlements under s 41(2) and s 41C(2), it may be relevant to examine whether a particular allowance or payment can be regarded as part of her wages. In such examination, it is necessary to take into account the meaning of “wages” as defined in s 2 and the circumstances of the case, including the terms of her contract of employment.

66. Subject to the context otherwise requiring, the word “wages” is very widely defined for the purposes of the Employment Ordinance. It is defined to include various types of allowance and commission and to exclude those items specified in (a) to (f) in that definition, which is to be found in s 2(1). In the case of a basic salary coupled with variable allowances or other payments, deciding whether such allowances or payments are part of the wages involves considering: the nature of the allowances or payments in question; how they are earned; and how they are calculated and paid.

67. We reject the suggestion that applying the method of calculation specified in s 41(2) and s 41C(2) in the case of a basic salary coupled with variable allowances or other payments is unworkable or would create an inconsistency. This method involves an investigation of what actually happened in the immediately preceding month, and that is easily ascertainable as a matter of fact. Essentially, applying s 41(2) involves taking the aggregate of the employee’s basic salary together with any allowance or payment which is included as part of her wages, and arriving at the average wage for each day. An employee who is paid a basic salary plus an allowance or other payment which can properly be included as her wages is on average obviously earning more a day than if she is paid only a basic salary.

68. The dispute in the present case is whether LDA, GDA and DFSC can be regarded as part of the wages of a crew member for the purpose of calculating her statutory holiday pay and annual leave pay. If these allowances and this commission are included, there is little doubt that her wages vary from day to day and that her entitlements for statutory holiday pay and annual leave pay fall to be calculated according to the specified statutory formula in s 41(2) and s 41C(2). We also see no difficulty in the method of calculation specified in s 41(2) and s 41C(2) for these allowances or this commission.

69. According to the terms of the relevant contracts of employment, LDA and GDA are earned whenever a cabin crew member is required to perform the relevant duties, and they are calculated down to the minute. That these allowances may be earned over a period of more than one day does not alter the fact that they are earned by a cabin crew member during the performance of her or his duties. They clearly qualify for inclusion as part of her or his wages for the purpose of statutory holiday pay and annual leave pay.

70. DFSC is earned whenever the cabin crew member performs flight duty and is assigned to conduct the sale of duty free items. The amount of commission (i.e. 3.5% of the total sale) can be calculated easily. Just because payment is made at the end of the following month and the exact amount may be subject to some slight adjustments upon the occurrence of some specific events, that does not affect her or his entitlement. This commission is clearly intended to form part of the wages of a cabin crew member who performs such duty.

71. The answer to the first question is that LDA, GDA and DFSC should be included when calculating statutory holiday pay under s 41 and annual leave pay under s 41C.

Answer to the second question

72. In the absence of any term providing for some other rate, the parties obviously ought to be taken to have intended that the statutory rate of annual leave pay under s 41C (“the statutory rate”) would apply to any period of annual leave pay in excess of those

prescribed by the Employment Ordinance (“excess periods”). Mr Strachan submitted that there is an implied term to that effect in Ms Kwan and Ms Wu’s contracts and an express term to that effect in Ms Ho’s contract.

73. We see no such implied term in Ms Kwan and Ms Wu’s contracts.

74. Mr Strachan’s argument that there is such an express term in Ms Ho’s contract, which argument we accept, runs thus. Ms Ho’s monthly salary is calculated by reference to the number of hours which she has flown (“Block Hours”) together with the credits, being work credits and leave credits, which she has earned. Those credits, per calendar day, are assigned a particular number of Block Hours in the amounts set out in for contract. This is a Minimum Guaranteed Flying Pay (“MGFP”) which is equivalent to 70 Block Hours per month. Ms Ho would receive the MGFP even in a month in which she has neither flown nor earned any credit. However, if the total value of Block Hours together with the credits in the relevant month exceeds the MGFP, she receives a salary calculated by reference to the actual Block Hours and credits earned in that month. Leave credits in respect of paid annual leave per calendar day are granted at the rate of 3.25 Block Hours. Over the course of a year, therefore, Ms Ho is credited with 21 x 3.25 x the hourly rate in respect of her annual leave, in recognition of the fact that during her 21 days of annual leave, which include both statutory and contractual annual leave, she will be unable to perform flight duties. So, in the foregoing way, Ms Ho’s contract expressly provides a contractual rate for excess periods which contractual rate is different from the statutory rate.

75. The answer to the second question is that the statutory rate applies to excess periods under contracts like Ms Kwan and Ms Wu’s but not to excess periods under contracts like Ms Ho’s.

Conclusion

76. For the foregoing reasons, this appeal is allowed to the limited extent of (i) holding that the statutory rate does not apply to excess periods under contracts like Ms Ho’s and (ii) setting aside the remitter. The appeal is otherwise dismissed. Unless agreed, costs here and below will be dealt with on written submissions in respect of which the parties should seek procedural directions from the Registrar.

Mr Justice Ribeiro PJ:

77. I respectfully agree with the judgment of the Chief Justice which I have had the benefit of reading in draft. This is a case which has caused me some concern since consideration of the first question upon which leave to appeal was granted has compelled re-examination of the reasoning in Lisbeth Enterprises v Mandy Luk,[2] a unanimous decision of the Court to which I was party. I shall confine my judgment to a discussion of that question which is formulated as follows:

“Whether Line Duty Allowance (‘LDA’), Ground Duty Allowance (‘GDA’) and Duty Free Sales Commission (‘DFSC’) should be included in the calculation of statutory holiday pay (under s 41 of the Ordinance[3]) and statutory annual leave pay (under s 41C of the Ordinance).”

A. The relevant payments

78. The material facts and the course of the proceedings below have been set out in the judgment of the Chief Justice, and it is unnecessary for me to repeat them. The precise terms on which each of the respondents was employed are not material for present purposes. It is sufficient to note that the present discussion concerns employees who received a combination of a fixed salary and title allowance each month and who were additionally paid varying sums representing the two allowances and the commission mentioned.

79. The allowances and commission are described in the appellant’s printed case as follows:




80. The question is whether sections 41 and 41C require such allowances and commission to be taken into account when calculating the employees’ entitlement to holiday and annual leave pay.

B. The provisions of the Ordinance

81. Employers are obliged to grant employees statutory holidays on each of the 12 days listed in section 39. By section 40, employers are obliged to pay them holiday pay. The rate of such payment is provided for by section 41 as follows:

“(1) Holiday pay shall be a sum equivalent to the wages which the employee would have earned on a full working day.

(2) Notwithstanding subsection (1), where an employee is employed on piece rates or where the daily wages of an employee

vary from day to day, the holiday pay shall be a sum equivalent to the average daily wage earned by the employee, and for the purposes of this subsection the average daily wage shall be the average of the daily wages earned by the employee on each day on which he worked during every complete wage period, comprising not less than 28 days and not more than 31 days, immediately preceding or expiring on the holiday or first day of the holidays.”

82. The entitlement to paid annual leave is conferred by section 41AA. The right is to have between seven and 14 days annual leave, depending on length of service. The rate of annual leave pay is laid down by section 41C which is similar to section 41 and provides as follows:

“(1) Annual leave pay shall, subject to subsection (2), be a sum equivalent to the wages which the employee would have earned if he had worked every day during the period of annual leave.

(2) Where an employee is employed on piece rates or where the wages of an employee vary from day to day, the annual leave pay shall be calculated by reference to the average daily wage earned by the employee, and for the purposes of this subsection the average daily wage shall be the average of the daily wages earned by the employee on each day on which he worked during every complete wage period, comprising not less than 28 days and not more than 31 days, immediately preceding or expiring on the first day of the annual leave or on the day on which the contract of employment terminates, as the case may be.”

83. The definition of “wages” in section 2 is important and relevantly runs as follows:

“‘wages’ – subject to subsections (2) and (3), means all remuneration, earnings, allowances including travelling allowances and attendance allowances, attendance bonus, commission, overtime pay, tips and service charges, however designated or calculated, capable of being expressed in terms of money, payable to an employee in respect of work done or to be done under his contract of employment, but does not include [11 defined categories of payments].”

84. Before examining those sections in more detail, their purpose should be addressed. They are provisions for determining how much an employee is entitled to be paid when enjoying a statutory holiday or a period of annual leave. Since, as we have seen, holiday and annual leave entitlements are measured in individual days – 12 statutory holidays and the number of annual leave days linked to length of service – the Ordinance provides for the amount of pay they should receive on each such day. It requires the employee to be paid the sum he or she would notionally have earned as wages for each such day off.

85. Since very few employees actually work on daily contracts (that is contracts whose individual duration is a single day, with payment of wages at the end of each day) a mechanism is needed for working out the equivalent of one day's pay, however the employee’s wages might actually be calculated and paid. Sections 41 and 41C provide that mechanism. They implicitly recognise that employees work under a whole range of differently structured employment contracts, ranging, for example, from monthly contracts on fixed salaries, through to piecework or commission-based contracts with variable remuneration. It is with these purposes in mind that the two provisions must be construed.

C. The appellant’s principal argument

86. Mr Mark Strachan, appearing for the appellant, contended that LDA, GDA and DFSC fall outside sections 41 and 41C. He submitted first, that on its true construction, subsection (1) in each of those sections caters only for employees with a fixed remuneration and therefore applies to cases where there is little difficulty calculating holiday or annual leave pay for each day off in a “sum equivalent to the wages which the employee would have earned on a full working day”. With respect, I agree. That was recognized in paragraph 23 of Lisbeth (set out below) which focussed on the word “would” used in sections 41(1) and 41C(1). In my view, the same conclusion is arrived at when one reads the first and second subsections together. Subsection (2) caters for employees whose remuneration varies from time to time.

87. The issue is whether the respondents come within subsection (2) in each of sections 41 and 41C. Mr Strachan’s argument that they do not rests fundamentally on the proposition, derived from Lisbeth, that such wages can only come within those subsections if the allowances and commission “at least accrue or are calculated on a daily basis”. The relevant paragraphs in Lisbeth run as follows:

“23. Plainly no mode of calculating holiday pay or annual leave pay based on commission is to be found in sections 41(1) or 41C(1). Those subsections are directed to what the employee “would” have earned. But commission involves what the employee might have earned, depending on whether the contractual requirements for entitlement to commission are satisfied. To the extent that provision is made for holiday pay and annual leave pay based on what the employee might have earned, that is done by sections 41(2) and 41C(2) which cater for piece rates and daily wages that vary from day to day. “Piece rates” have nothing to do with commission. What

about “daily wages”? Perhaps the term “daily wages” applies only to wages in the sense of salary. But let us suppose for the sake of the present argument that the term extends to commission.

24. What then would supply the requisite quality of dailiness? Wages may not have to be paid on a daily basis before they can be regarded as “daily wages”. But I do not see how wages can be so regarded unless they at least accrue and are calculated on a daily basis. Subject therefore to the possibility that sections 41(2) and 41C(2) can be read to cover contractual commission accruing and calculated on a daily basis in amounts varying from day to day, those subsections do not cater for commission. It follows that holiday pay and annual leave pay form a context which requires that the word “wages” be read as excluding commission save possibly for commission accruing and calculated on a daily basis in amounts varying from day to day.

25. It is unnecessary to express any view in relation to that possible exception. It is irrelevant to the present case since Ms Luk’s commission accrued and was calculated on a monthly basis. Her commission was payable according to fluctuating monthly results and on a sliding scale which moved up and down with such results. So her commission simply could not accrue or be calculated until the end of the month arrived and that month’s results were known.”

88. Applying those paragraphs, Stone J decided in favour of the appellant at first instance.[4] His Lordship held that the employees failed on this point because “...the term ‘daily wages’ ... connotes a form of employment patently different from monthly wages”.[5] He held that, “In no sense do Ms Kwan and Ms Wu earn ‘daily wages’ properly so-called ...”[6] and concluded:

“... just as the CFA held in Lisbeth Enterprises, op cit., that commission accruing and calculated on a monthly basis did not fall to be included in the calculation of statutory holiday pay and annual leave pay, so in the present instance neither LDA nor GDA fall to be included on the ground that neither can be said to accrue on a daily basis.”[7]

89. Stone J’s judgment and Mr Strachan’s argument depend crucially on interpreting sections 41(2) and 41C(2) as laying down as an essential condition for their application, the requirement that the parties must have entered into contracts which stipulate that “wages”, in whatever form, “accrue or are calculated on a daily basis”. Paragraph 24 of Lisbeth set out above, may reasonably be thought to support that approach. That, in my view, is the problematical point in this appeal.

D. The provisions construed

D.1 The problem

90. The construction adopted by the Court in Lisbeth (to which of course, I subscribed) results in sections 41(2) and 41C(2) being given a very narrow ambit. Ms Luk’s commission was excluded on the basis that it did not accrue and was not calculated on a daily basis. Instead, it:

“... was payable according to fluctuating monthly results and on a sliding scale which moved up and down with such results. So her commission simply could not accrue or be calculated until the end of the month arrived and that month’s results were known.”[8]

91. As already mentioned, only very few people actually contract to be employed on terms that their remuneration (whether salary, allowances or commission, etc) accrues and is calculated on a daily basis. It is much more common – if only for administrative convenience – for calculations to be made on a monthly or other periodic basis, taking fluctuations into account.

92. That the sections should be given a very narrow ambit may well be thought to be inconsistent with the policy of the Ordinance. It treats all forms of remuneration, including allowances and commissions, “however designated or calculated”, as falling within its definition of “wages” in section 2. Yet on the construction adopted in Lisbeth and now advanced by the appellant, LDA, GDA and DFSC are to be excluded because they are not designated as “daily” and not calculated on a daily basis.

93. Moreover, sections 39 and 40 of the Ordinance provide for every employee to be granted statutory holidays and for employees to receive statutory holiday pay if they have worked under a continuous contract for at least 3 months. The Ordinance then specifies that holiday pay is to be paid “at the rate specified in section 41”.[9] The rate of payment is obviously of central importance to the statutory scheme providing for paid statutory holidays and there is no indication that section 41 is intended to apply only to a small segment of the employee population. If those who fall foul of the “accrued or calculated on a daily basis” requirement are excluded from section 41, one is left with a large legislative gap. How does one determine how much such excluded employees should be paid on each statutory holiday to which they are entitled? It is hard to accept that such a gap was intended. The legislative intent cannot be to leave this to the parties’ express agreement. Statutory employment protections are needed precisely because employment relationships are often ill-defined.

94. The same points apply to annual leave pay. Section 41AA confers on employees the right to paid annual leave and section 41C quantifies such pay. If many employees are excluded from section 41C(2) by a narrow interpretation of its ambit, a gap appears in the legislative scheme as to how annual leave pay for such excluded employees is to be calculated.

95. In Lisbeth, it was held that the commission in that case did not come within the statutory definition of “wages” was excluded because the context indicated otherwise. On this point, I respectfully agree with the Chief Justice’s analysis of the difficulties which undermine that conclusion.

D.2 The true construction of sections 41 and 41C

96. I have come to the conclusion that on their true interpretation, the relevant sections are not confined by a requirement that the wages must have “accrued or be calculated on a daily basis”. In my view, the two sections should not be understood to be laying down as conditions of their application, specific requirements regarding the actual terms of the employment contract entered into between employer and employee. Both subsections (1) and (2) of each of sections 41 and 41C, are instead concerned with laying down a mechanism for ascertaining the notional equivalent of a daily wage for the purposes of establishing holiday and annual leave pay, whatever may be the actual terms and structure of the parties’ contract. The statutory mechanism imports (as paragraph 21 of Lisbeth recognizes) an element of deeming so as to arrive at the equivalent of a daily wage, involving a process of averaging in cases where the remuneration is variable.

97. Thus, when dealing with employees whose salary is fixed and regular, section 41(1) prescribes that the entitlement on each statutory holiday is to payment of “a sum equivalent to the wages which the employee would have earned on a full working day”. It is a notional sum since the employee does not in fact work on the statutory holiday, but one looks to see what he would have earned if he had worked. His entitlement is not to payment of a contractually specified amount, but to the equivalent of a day’s wages which he would haveearned on the notional hypothesis. The ascertainment process involves dividing the annualised fixed salary by 365 days (for the reasons given by the Chief Justice) and treating the deemeddaily wage as the employee’s holiday pay entitlement.

98. As previously noted, section 41(2) caters for employees whose salary is not fixed, but which may vary. The respondents, in my view, come within this subsection. Their remuneration has two elements, a fixed monthly salary and title allowance on the one hand, and variable allowances and commissions on the other. These must be taken in combination since they are both components of the respondents’ “wages” under section 2 of the Ordinance. When taken together, they constitute sums of wages which vary from time to time because of the variable element consisting of the allowances and commission.

99. In providing that “where the daily wages of an employee vary from day to day, the holiday pay shall be a sum equivalent to the average daily wage earned by the employee”, section 41(2) is mandating the same approach as that discussed above in relation to section 41(1). Mr Strachan, in my view correctly, accepted that the two expressions “full working day” in section 41(1) and “each day on which he worked” in section 41(2) have the same meaning. Accordingly, where a variable element is introduced into an employee’s remuneration package, section 41(2) provides the

mechanism for ascertaining his holiday pay entitlement by ascertaining the equivalentof what he notionally would have earned as an average day’s wages. This requires one to take the total of the fixed and variable elements applicable to the wage period in question and dividing that total figure by the number of days in that wage period (as envisaged in subsection (2)), deemingthe resultant sum the equivalent of the average daily wagewhich the employee would have earned and thus his or her daily holiday pay entitlement.

100. The same applies mutatis mutandis to sections 41C(1) and 41C(2). Section 41C(1) deems the annual leave pay entitlement to be “a sum equivalent to the wages which the employee would have earned if he had worked every day during the period of annual leave” and operates in the same way as section 41(1). Section 41C(2) deals with employees with variable remuneration (“where the wages of an employee vary from day to day”) and requires their annual leave pay entitlement to be calculated “by reference to the average daily wage” based on prior completed wage periods.

101. Adopting this construction, the fact that the respondents’ actual employment arrangements did not provide for their allowances and commission to accrue and be calculated on a daily basis does not exclude such payments from being taken into account. Their total wages, comprising both fixed and variable elements taken from the prior completed wage period, can simply be added together and divided by the number of days of the wage period to obtain what is deemed to be an average daily wage, to serve as the measure of holiday pay and annual leave pay.

102. It has to be accepted that the reasoning in Lisbeth poses problems and may not be consistent with the abovementioned approach. It was held in Lisbeth that the facts of that case made

calculation unworkable, although the basis of such unworkablility now appears somewhat obscure. Lisbeth, in my view, must to be confined to its own special facts and I would adopt the construction discussed above as the true construction of sections 41 and 41C.

Lord Neuberger of Abbotsbury NPJ:

103. In common with the other members of the Court, I agree that the three questions raised on this appeal (as set out in paragraph 3 of the Chief Justice’s judgment) should be disposed of in accordance with the order proposed in paragraph 42 of the judgment of the Chief Justice. I also agree with para 43.

104. As to the first question, which raises the most difficult point in the appeal, I consider that Line Duty Allowance, Ground Duty Allowance and Duty Free Sales Commission should all be included when calculating pay under sections 41 and 41C of the Employment Ordinance Cap 57, for the reasons given by the Chief Justice in paras 20 – 33 above, and by Ribeiro PJ in paras 90 – 102 above.

105. Cathay’s appeal on the second question should, in my view, be dismissed in relation to Ms Kwan and Ms Wu, and allowed in relation to Ms Ho, for the reasons given by the Chief Justice in paragraphs 34 – 41 of his judgment, and, as I do not understand Bokhary and Chan PJJ to be giving different reasons, for the reasons set out in paras 72 – 75 above.

106. Cathay’s appeal on the third of the questions raised should, in my opinion, be allowed for the reasons given by the Chief Justice in

paragraph 5 above, and for the reasons given by Bokhary and Chan PJJ in paragraph 55 above.

107. No further comments are called from me in relation to the latter two questions.

108. I think that any difficulties in answering the first of the questions, primarily arise from two factors. The first is the decision and reasoning of this Court in Lisbeth Enterprises Ltd v Mandy Luk (2006) 9 HKCFAR 131. The second factor which gives rise to difficulties is the meaning of “full working day” and “every day during the period of annual leave” in, respectively, sections 41(1) and 41C(1), coupled with “each day on which he worked” in sections 41(2) and 41C(2) (and I shall refer to these four phrases as “the phrases”).

109. So far as the decision in Lisbeth is concerned, I am content for present purposes to say, in common with all other members of the Court, that it was decided on its own special facts, and cannot be taken as laying down any principle of general application in relation to the interpretation of any of the statutory provisions under scrutiny on this appeal. I would not want to be thereby understood as suggesting that Lisbeth was rightly decided; that is not a point which properly falls for decision on this appeal, as it was not ventilated before us, and it does not need to be resolved for the purpose of disposing of this appeal. However, as at present advised, not least in the light of what is said by the Chief Justice in paras 24 – 27 and 30 – 32 above, and by Ribeiro PJ in paragraphs 90 – 95 and 102 above (with all of which I agree), I am by no means convinced that Lisbeth was rightly decided.

110. I would like to say a little more about the second factor, namely the effect of the phrases in a case such as this (where the employees are employed effectively on a full-time basis, as opposed to a piece-work basis), because I have found it a particularly difficult topic, on which my views have fluctuated.

111. Although sections 41(1) and 41C(1) employ different phrases, namely “full working day” and “every day during the period of annual leave” respectively, it seems to me that they must have the same meaning. It would be inconsistent in principle and capricious in practice if it were otherwise, given that the two subsections have essentially the same aim. For similar reasons, the phrase used in subsection (2) of each section, “each day on which he worked”, should have the same meaning as the phrase used in subsection (1) of each section (and the fact that the same expression is used in subsection (2) of section 41 and section 41C therefore confirms the view that the phrases used in subsection (1) of the two sections should be given the same meaning).

112. On the face of it, the meaning and effect of these phrases seem to be innocuously clear, until one starts to consider just how they are to be applied in practice. Even in a simple case where the issue arises in the case of an employee who works full-time for an employer, as in this case, the expression “full working day” appears to present a problem. In a case where such an employee regularly works five (or six) days a week, does one assume that she works 365 days a year or 261 - or 313 - days a year (or around 30 days, or around 22 - or 26 - days a month), and does one reduce that number of days to allow for holidays and annual leave? The question is crucial, because the employee’s annual (or monthly) pay is fixed, and number of “full working days” is crucial for the purposes of calculating the sum payable under section 41(1).

113. In most, or at any rate many, such cases, the issue will be academic, as the employee will be paid under a contract which fixes a fixed monthly rate or annual rate of pay, and specifies the number of days holiday and leave to which the employee is entitled. In such a case, the employee’s rights under section 41(1) are already catered for in her employment contract, and there is no need to consider precisely how section 41(1) works or means. In such a case, the employee is treated as if she was, in effect paid a fixed amount each day of work, holiday or leave.

114. However, the sort of question which I have identified would arise in a case where the employee was paid at a daily rate, on the days when she actually works. In such a case, I agree with the view, as expressed by the Chief Justice and Ribeiro PJ, namely that, in a case such as the present, where the employee is a full time employee of the employer, she is to be treated on the basis that every day is a “full working day”.

115. At first sight, that seems unfair and inconsistent. Take an employee who works five days a week and is paid $1,000 each day she works. At first sight, one would expect her to be paid $1,000 for a day’s holiday or leave to which section 41 or 41C applies. However, that would only be the outcome if the employee’s “full working day” was confined to weekdays. For this simple reason, it initially appeared to me that “full working day” should not be taken as applying to weekends in the example just given.

116. However, further consideration has convinced me that, in such a case, the employee should be treated on the basis that every day is a “full working day”.

117. First, it would be inconsistent if an employee employed full-time on a five-day week basis, at monthly wage of $20,000 per month (assuming, to keep it simple, a non-leap year February) should have her pay under sections 41(1) and 41C(1) calculated on a different basis from an employee employed on effectively identical terms except that her pay was at the rate of $1,000 per day.

118. Secondly, where an employee works a three-day week (or even a two-day week) but is nonetheless employed full-time in practice (e.g. because the nature of her work means that when she is working she must put in 15 hours a day), it would seem inconsistent if her pay under sections 41(1) and 41C(1) was based on what she earned on the three (or, a fortiori, the two) days on which she worked. It would be far more logical to treat such an employee as entitled to pay under those sections in the same sort of amounts as if she worked for the more normal five days, rather than the more intensive three (or two) days, a week.

119. Thirdly, as the Chief Justice has emphasized, the application of sections 41 and 41C should, if possible, involve a clear and simple exercise. The more consistently those sections are applied, the more likely employers and employees will know where they stand, and the less room there is for manipulation of the terms of employment contracts to minimize or maximize the benefits to be enjoyed under the two sections.

120. Fourthly, there is a logical problem in treating only every weekday as a “full working day” in the case of an employee who works every weekday. Such an employee is entitled to holidays and leave days, so those days should not, on the basis of this assumption, be “full working day[s]”. Thus, if one is going to limit the phrase to days when the employee is bound to be at work, it would produce a result which would involve a degree of circularity,

and which would not be easy to calculate. It might also be a disincentive to employers to grant longer holidays and more leave days to employees, as the more such days were granted the fewer the “full working days”, and therefore the greater the pay per working day, which would result in an increased amount payable under the two sections.

121. Fifthly, in the normal holiday case, where an employee takes a week or two weeks off in one tranche, there would be no difference in outcome under the two sections between treating every day as a “full working day” and an approach which would limits the expression to weekdays.

122. Sixthly, the meaning is the one supported by counsel for the appellant in this case, and it was not challenged by counsel for the respondents.

Chief Justice Ma:

123. In the result, the three questions for determination in this appeal should be answered as set out in para 42 above. Costs are to be dealt with as indicated in para 43 above.

(Geoffrey Ma)

Chief Justice

(Kemal Bokhary)

Permanent Judge

(Patrick Chan)

Permanent Judge

(R A V Ribeiro)

Permanent Judge (Lord Neuberger of Abbotsbury)

Non-Permanent Judge

Mr Mark Strachan and Mr Jeffrey Chau, instructed by Mayer Brown JSM, for the appellant

Mr Martin Lee, SC and Mr Erik Shum, instructed by Tsangs, for the 1st, 2nd & 3rd respondents

[1] All references to provisions of “the Ordinance” are references to the provisions of the Employment Ordinance (Cap.57) as it stood prior to the Employment (Amendment) Ordinance 2007.

[2] (2006) 9 HKCFAR 131.

[3] The Employment Ordinance (Cap 57) as it stood prior to the Employment (Amendment) Ordinance 2007.

[4] HCLA 3-5 and 7-9/2009 (6 November 2009) at §§57-69.

[5] Stone J, §66.

[6] Stone J, §57.

[7] Stone J, §69.

[8] At §25.

[9] Section 40.

Lesson no. 7

Ref 05: A HK Case: Archer, Harold Dean v The Hong Kong Channel Limited 1997

IN THE COURT OF APPEAL OF THE HIGH COURT

1997, No. 155(Civil)

______________

BETWEEN

ARCHER , HAROLD DEAN Plaintiff

AND

THE HONG KONG CHANNEL LIMITED

Defendant

______________

Coram: Hon Nazareth, V-P, Liu, J.A. and Cheung, J. in Court

Date of hearing: 14 November 1997

Date of handing down judgment: 5 December 1997

______________

J U D G M E N T

______________

Liu, J.A.:

1. Stripped of all his other capacities, the plaintiff was an employee of the defendant company under an Employment Agreement date 6 July 1990 for a period of three

http://legalref.judiciary.gov.hk/lrs/common/search/search_result_detail_body.jsp?ID=&DIS=9202&QS=$(Archer%7CHarold%7CDean&%2341;&TP=JU%23ctx2





years commencing from even date on a salary of $40,000 per month and a housing allowance of $25,000 per month.

2. The plaintiff continued to be employed by the defendant in the same capacity and, in the absence of any evidence to the contrary, on the same terms after the expiration of the Employment Agreement. Throughout, the provisions of the Employment Ordinance, Cap. 57 applied. The plaintiff was thus liable to dismissal on payment in lieu of notice pursuant to s. 7 of that Ordinance.

3. At a meeting of the Board of Directors of the defendant company held on 17 June 1995, it was resolved that the employment of the plaintiff be terminated forthwith. The plaintiff claims that his dismissal was without proper cause, but it was the consensus before Deputy Judge Longley that the plaintiff's employment with the defendant company was nevertheless effectively terminated. The plaintiff accepted a cheque for $40,000 as one month's salary in lieu of notice at the beginning of July, the next month. The trial judge held that the plaintiff's dismissal was entirely disassociated from any of the elements prescribed by s. 31B(2)(a) or (b) of the Employment Ordinance and that therefore it was not a case of redundancy which would have attracted a severance payment.

4. However, the plaintiff complains that the trial judge was wrong in rejecting his claim for a long service payment under s. 31R of the Employment Ordinance. In order to be entitled to a long service payment, it was incumbent upon the plaintiff to establish, for a man of his age, a continuous employment by the defendant company for not less than five years. That the plaintiff was effectively dismissed as from 17 June 1995 by a resolution passed at a meeting of the Board of Directors of the defendant company convened on 17 June 1995 was not, as stated earlier, in dispute. Computing the period of employment from the date of the Employment Agreement i.e. 6 July 1990 to the date of dismissal i.e. 17 June 1995, it was less than five years. The plaintiff maintained before the trial judge that he had in fact been employed since May 1990. He also submitted that his dismissal took effect some days after 17 June 1995. It is quite unnecessary to rehearse the matters on which the trial judge deliberated for reaching his conclusion that the plaintiff did not become an employee of the defendant company until the date of his Employment Agreement on 17 June 1995. The Deputy Judge also upheld the validity of the resolution. They are primarily findings of fact. The arguments advanced to the trial judge were re-ventilated in the prosecution of this appeal, but I am not persuaded that the factual evaluation process of the trial judge is open to just criticism.

5. The main issues put to us are the Chinese New Year Bonus, the Housing Allowance, the Long Service Payment and the Leave Entitlement for half of 1995.

Lunar Year-end Bonus

6. The plaintiff took a Chinese New Year bonus for 1992. The Deputy Judge found as a fact that the plaintiff had not been authorised to award himself any Chinese New Year bonus, and accordingly the plaintiff's claim on that account was rejected. The plaintiff was ordered to repay the bonus to which he had helped himself in 1992. The plaintiff advanced to us the same arguments he submitted to the trial judge. Nothing brought to our attention is sufficient to disturb the factual finding of the seeing judge in the court below.

Housing Allowance

7. The plaintiff drew housing allowances over and above the stipulated monthly sum of $25,000 in the Employment Agreement. The Deputy Judge found that the plaintiff continued to be employed by the defendant company after the expiration of the Employment Agreement on the same terms. On the allegations and counter-allegations raised with respect to the plaintiff's claim for an increase in housing allowance, the trial judge preferred the evidence adduced on behalf of the defendant company and found the plaintiff to have met part or all of his rental increase from the company's coffers without authority. This court is disadvantaged as against the trial judge on findings of fact. The Deputy Judge proceeded to consider the evidence with great care, and the conclusion he reached after detailed analysis and proper evaluation can in no way be faulted.

Long Service Payment

8. It is unarguable that the plaintiff was employed before the Employment Agreement or that he was not effectively dismissed as at 17 June 1995. The plaintiff served the defendant company for less than five years. There is no substance in this complaint.

Leave Entitlement

9. The plaintiff's employment was terminated in June 1995. Under his terms of employment, the plaintiff was entitled to 14-day annual leave. For his almost half a year in 1995, the plaintiff was entitled to, say, 7 days. The trial judge found that the plaintiff had taken 6 1/2 days' leave in 1995. The rationale in the trial judge's

approach was : under Clause 6 of the Employment Agreement no annual leave could be carried over to the following or subsequent years, and the unused annual leave would be forfeited at the end of any one leave year. The Deputy Judge therefore regarded the leave taken by the plaintiff in January 1995 as part of his 1995 leave entitlement because whatever the balance of annual leave in the previous year must have been forfeited. The plaintiff left Hong Kong on 22 December 1994 and returned to work at mid-day on 10 January 1995. Excluding public holidays, in 1995 the plaintiff was absent on leave for 6 1/2 days. Hence the Deputy Judge concluded that the plaintiff had taken 6 1/2 of the 7 days for the half year in 1995 before his dismissal. The plaintiff was accordingly allowed only half a day's annual leave in the sum of $659 (9,230 for 7 days ( 7 x 1/2 ).

10. In the plaintiff's Notice of Appeal, he was originally content with the award of $659 for half a day. In the course of the hearing before this court, the plaintiff sought leave to amend his Notice of Appeal with the view to rehashing his 7-day annual leave claim for 1995. The amount for 7 days was agreed to be $9,230. The plaintiff's application to amend was resisted. We granted leave and dispensed with re-service.

11. The plaintiff relies on paragraph 3 of the witness statement of Mrs Sheena Andrea Hardy dated 15 April 1997 and the agreed entries in his American passport. It is obvious that the plaintiff was out of Hong Kong between 22 December 1994 to 10 January 1995. From his period of absence proximate to the year of 1994, this court is invited to draw an inference that the vacation taken between the year-end in 1994 and early January 1995 would probably have come from his accrued annual leave for 1994. But for Clause 6 of the Employment Agreement, it would be more probable, so the plaintiff argues, for him to spend his 1994 earned leave instead of his unearned leave for 1995 assuming, of course, that he had a balance of his 1994 paid leave. Under s. 41AA(5)(a) of the Employment Ordinance, as an employee the plaintiff could take his annual leave earned in the previous year within a period of twelve months after the expiration of the leave year. The contrary provision in Clause 6 of the Employment Agreement for forfeiting unused annual leave at the end of each leave year should therefore have been ignored for this reason: Clause 6 of the Employment Agreement ran counter to s. 41AA(5)(a) and s. 70 of the Employment Ordinance avoided any contracting out which would lead to, inter alia, an erosion of any rights, benefit or protection conferred upon an employee by the Ordinance. Hence, there existed no apparent inhibition against the plaintiff taking his 1994 leave balance in 1995. This is a matter debated for the first time in the course of the prosecution of this appeal. Naturally, it stands to reason that for the period nearer to

1994 as between 22 December 1994 to 10 January 1995, the plaintiff would more probably have taken his 1994 leave which he had earned. But to begin with, this probability presupposes that the plaintiff had an unused balance of paid leave for 1994. It is further contended that the trial judge's reliance on Clause 6 of the Employment Agreement is indefensible and that the conclusion he reached on a misconceived legal premise cannot be supported.

12. On the other hand, there is no evidence that the parties to the Employment Agreement were concerned with any provisions of the Employment Ordinance or that they were alive to the overriding effect of its s. 70. It is highly probable that the parties conducted themselves in accordance with Clause 6 of the Employment Ordinance they had signed and treated the leave taken in January 1995 as paid leave for 1995. Balance, if any, of all previous leave must have been assumed to have been forfeited under that clause. No one raised the question of contracting out of the Employment Ordinance, not even before the trial judge. No leave record was found by the Deputy Judge to have been kept or produced at the trial. This court is told that the only reference made to paid leave at the trial was the agreed calculation of $9,230 for the 7 days claimed as set out at page 34 of the transcript. Against this scenario, it would not be unreasonable to expect the plaintiff to have regarded himself as bound by Clause 6 and taken the 1995 leave in the belief that any unused balance of his 1994 leave could not be carried over. In any case, there was no evidence that the plaintiff had any balance of paid leave for 1994. There was some faint suggestion that the plaintiff had previously over-spent his contract leave. Insofar as it was open to the trial judge to take cognizance of what must have been the mutual understanding, correct or mistaken, viz. "by virtue of the term of his employment contract, the plaintiff could not carry over the balance of leave entitlement from one year to the next", the Deputy Judge's rationale is not wholly without merit and could not be totally disregarded. It may reasonably be concluded, as the Deputy Judge did, that the plaintiff must have taken the 6 1/2 days from his 1995 leave. The trial judge found that the plaintiff took 6 1/2 days of his 1995 leave with only half a day's entitlement left in his favour. The plaintiff made no complaint of this finding in his original Grounds of Appeal. The reopening of this claim based on the validity of Clause 6 by his amended Notice of Appeal has deprived the defendant company of a fair opportunity of testing it as a joined issue by, at least, further cross-examination of the plaintiff on his 1994 leave balance.

13. In the light of the circumstances in which the parties must have then found themselves, it would seem more or equally probable that the plaintiff intended to and

did take his 1995 paid leave. There is no warrant for this court to prefer the other suggested probability of the plaintiff enjoying his earned 1994 paid leave in between 22 December 1994 to midday 10 January 1995, particularly when there was no evidence whether in fact the plaintiff had to his credit any unused 1994 leave entitlement. Worst still, the matter cannot now be fully canvassed. For these reasons, we are unable to rely on one probability over another for overturning the conclusion of the trial judge that the plaintiff had only half a day's leave entitlement for his half year in 1995. After all, the Deputy Judge's approach was not against the weight of the evidence which had to be evaluated in the frame of mind of the parties as at January 1995.

14. It is not otherwise suggested that the trial judge's summation is in error, viz. "The plaintiff's claim for unpaid wages (inclusive of bonuses)(which the plaintiff quantified at $582,096) succeeds only to the extent of $457,667 which is the amount admitted by the defendant in its Defence."

15. On the findings of the Deputy Judge, the defendant succeeded in its counterclaim for unauthorised drawings by the plaintiff in respect of housing allowance to the extent of $335,970 and the 1992 Chinese New Year bonus in the sum of $40,000.

16. The Deputy Judge's computation set out below must be also correct:

"After the plaintiff's successful claim ($457,667 + $659) is set off by the defendant's successful counterclaim ($335,970 + $40,000), a balance of $82,356 remains owing to the plaintiff".

17. The trial judge gave judgment in that sum and allowed interest at 11.5 per cent per annum to run 7 days after the plaintiff's dismissal until payment. 7 days was a reasonable period for payment.

18. The plaintiff succeeded only to the extent as admitted by the defendant and the trivial sum of $659 was not significant enough to dissuade the trial judge from disallowing the plaintiff costs of the action, particularly when the dispute as to unused paid leave for 1995 could have been averted by proper supervision over the keeping of records of his own leave. The defendant succeeded substantially on its counterclaim. The costs orders made by the trial judge would seem to be well grounded, and we should not interfere.

19. In the circumstances, I would dismiss the appeal and make an order nisi that the plaintiff to pay the defendant's costs of this appeal.

Cheung, J. :

20. Apart from the claim relating to the Plaintiff's leave entitlement for 1995, I agree that his appeal should be dismissed.

21. The Plaintiff asked for one half of his annual leave entitlement for the year 1995. The Defendant conceded that the Plaintiff would be entitled to seven day leave at $9,230. However, it claimed that the seven day leave was exhausted because the Plaintiff had taken leave from 1st January to 11th January 1995.

22. The Plaintiff's case that was presented to us and in the court below was the same, namely the leave he took in the early part of January 1995 was part of his 1994 annual leave which he took from 22nd December 1994 to 10th January 1995. This was made abundantly clear at the cross-examination of DW2 Sheena Andrea Hardy when the Plaintiff stated that :

"... the 1994 entitlement of 14 days was commenced in December, and it is the Plaintiff's argument that that entitlement doesn't stop automatically with the calendar year, but he's taking the leave when he returns for the leave, that entire leave is plied towards his 1994 entitlement ..."

23. The Plaintiff further stated that :

"... the leave taken regarding December was indeed the 1994 leave and I don't believe that the 1995 leave which has yet to actually effect -- I've not work in 1995 yet. I could not very well go in on 1st January 1995, take 14 days leave and say 'Thank you very much, I've got my leave, now I'll work the rest of the year' ..."

(Page 140 of the Appeal Bundle)

24. There was no doubt whatsoever that the Defendant was fully aware of the nature of the Plaintiff's claim on the leave entitlement. The only defence it had advanced was that the Plaintiff could not carry his 1994 annual leave into 1995. In the evidence - in - chief of the Plaintiff, Counsel for the Defendant referred to paragraph 6.01 of the Employment Agreement and argued that the paid leave could not be accumulated. Likewise in Paragraph 11 of the Defence and Counterclaim it was pleaded that :

"(i) the Plaintiff was only entitled to 6.5 days annual leave for the period from 1st January 1995 to 17th June 1995 pursuant to Clause 6 of the Employment Agreement;

(ii) the Plaintiff took annual leave from the Defendant for the period from 23rd December 1994 to 11th January 1995, which period was longer than what he was entitled to under sub-paragraph (i) hereinabove;"

In my view the only relevance of pleading the leave period from 23rd December 1994 to 11th January 1995 was that the leave taken in 1995 was referrable to the 1994 annual leave which it said could not be carried over to the following year.

25. It was argued by the Defendant that it was precluded from exploring whether the Plaintiff had any unused leave in 1994. This argument was clearly untenable because of the concession of the Defendant in the court below. The exchange between the learned Judge and Counsel for the Defendant was as follows :

"Court : ... Can I just clarify that your claim is not that Mr Archer exceeded his leave for 1994, but that the period he took within 1995 exceeded his allowance for 1995.

Mr Chow : Yes.

Court : Just to get this absolutely clear, you are not suggesting that he took too much leave in 1994, you are suggesting he took too much leave in 1995.

Mr Chow : Yes, that is precisely ..."

26. The Defendant clearly had the opportunity to find out from the Plaintiff whether he still had any unused leave in 1994. It had chosen not to do so, but instead relied solely on the terms of the Employment Agreement. The argument that there was no evidence that the Plaintiff had any balance paid leave for 1994 was removed by the very concession made by the Defendant. In the circumstances, it would be unreasonable to expect the Plaintiff should nonetheless adduce evidence in relation to his leave balance in 1994.

27. Once it is accepted that Clause 6 is contrary to s.41AA(5)(a) of the Employment Ordinance, then the defence fails and the Plaintiff is entitled to $9,230. For my part, I would allow the appeal to the extent that I have indicated and concur in the costs order nisi proposed.



Nazareth, V.-P.:

28. Save as to the appellant's claim in respect of leave entitlement, to which I shall come, I agree with Liu JA that his appeal should be dismissed.

29. The judgment appealed against is characterised by the care with which the judge dealt with all the issues before him. He was plainly entitled to make the several findings of fact that he made. More than that all of them seem to me to be right. Nothing the appellant has urged upon us leads me to doubt those conclusions. They dispose of the issues concerned with the Lunar New Year bonus and housing allowance claims, both of which were decided upon findings of fact.

30. Likewise, the issue concerned with the additional month's salary claimed by reference to the disputed date of termination of employment was resolved by the judge's relevant finding of fact. In any case, the appellant's contention before us that despite payment of a month's salary in lieu of notice, his employment yet did not terminate until the expiration of the month for which the payment was made, is absurd.

31. As to the claim for long service payment, it seems to me perfectly plain that notwithstanding the earlier resolution of the Board that the appellant be employed, his employment did not commence until that resolution was given effect by the two sides entering into the employment agreement. Likewise it is plain, as I have indicated, that his employment terminated immediately upon payment of a month's salary in lieu of notice. Clearly, the judge was right in determining that he was not entitled to a long service payment as his service fell short of the qualifying period of five years.

32. Turning then to the appellant's claim to 7 days' leave, this was not raised in his notice of appeal, nor before the judge below upon the basis on which he pursued it before us. The latter was that although the employment agreement provided that his leave had to be taken in the year in which it was earned, s. 41AA(5)(a) of the Employment Ordinance provides that annual leave to which an employee is entitled shall be granted by his employer and be taken by the employee within the period of 12 months beginning immediately after the expiration of the year to which it relates. It is not disputed that the leave claimed would be annual leave. Accordingly, there is a clear conflict between the provisions of the employment agreement and s. 41AA(5)(a). In this regard, s. 70 of the Employment Ordinance provides as follows:

"Contracting out

Any term of a contract of employment which purports to extinguish or reduce any right, benefit or protection conferred upon the employee by this Ordinance shall be void."

33. Plainly, in my view, that part of the employment agreement which requires the appellant's annual leave to be taken within the year it is earned, is rendered void. I did not understand Mr Lawrence Ng for the respondent to dispute that.

34. Instead, he sought to demonstrate by an argument Liu JA has outlined, first that the appellant failed to establish that he had not taken some leave that would have used up the 7 days, alternatively that by in effect harmonising the operation of the employment agreement and of s. 41AA(50(a), part of the leave that the appellant took between 22nd December 1994 and 10th January 1995 must have been leave due in respect of the 1995 year. That would have had the result that the appellant would not have had an unused balance of 7 days. I cannot say that I am persuaded by that argument. It seems to me far more probable that the appellant would use his leave earned earlier before that earned later, particularly in the light of clause 6 which causes its forfeiture if not taken within the year. Upon that basis, which Cheung J has set out rather more comprehensively, the appellant would be entitled to a payment in respect of the 7 days of untaken leave for 1995 less the half day the judge found he had taken. It is agreed that the amount due in that respect would be $9,230.

35. I would accordingly allow the appeal only to that extent, set aside the order below and substitute an order that he be paid the amount of $9,230. As to costs, the respondent has succeeded in all but one very minor aspect of the entire appeal, and even in that respect only upon a new ground that not only was not taken before the judge but raised on the eve of the hearing of this appeal. In my view, clearly the respondent should have its costs of the appeal.

36. By a majority, therefore, the appeal is allowed to the extent I have mentioned but dismissed in all other respects. The order below is set aside only to the extent that the appellant's claim for a payment in lieu of 7 days annual leave was dismissed. There will be judgment for the appellant in

the sum of $9,230 and a costs order nisi that the appellant is to pay the respondent's costs of the appeal.

(G P Nazareth) (B Liu) (P Cheung)

Vice-President Justice of Appeal of the Judge of Court of First

of the Court of Appealof the High court

Court of Appeal of the High Court

Instance of the High Court

Representation:

Plaintiff/Appellant - Archer , Harold Dean in person

Mr Lawrence Ng M/s Chui & Lau for Defendant/Respondent

Application for leave to appeal by the plaintiff to Court of Final Appeal. Leave to appeal granted. Please refer to the appeal judgment of FAMV7/1998.






Lesson no. 8

Ref 10 : 香港特别行政区区域法院雇员补偿案件编号 2006 年第 312 宗申请人谭权光及答辩人臧兰英全文

DCEC 312/2006香港特别行政区区域法院

雇员补偿案件编号 2006年第 312宗________

申请人谭权光及

答辩人臧兰英________

主审法官：区域法院法官梁俊文公开聆讯聆讯日期：2008年 7月 24日判案书日期：2008年 10月 10日

判案书 1. 申请人谭先生就他指于 2005年 4月 26日因工受伤，向答辩人臧女士追讨雇员补偿。臧女士指谭先生是自雇人士，并非她的雇员。臧女士又指当天下午，谭先生因工作能力不足而被辞退。但谭先生却自行折返，然后声称意外受伤。言下之意，臧女士也争议谭先生是否在受雇期间因工受伤。2. 谭先生和臧女士皆有出庭作供。臧女士原有另一位证人，但经考虑后她决定不传召该证人。该人士之陈述书自然不被接纳为证据。谭先生是否雇员3. 有关雇员的定义和界定，终审法院于 Poon Chau Nam v Yim Siu Cheung trading as Yat Cheung Air Conditioning & Electric Co [2007] 2 HKC 135 (第 144D-145C段)一案中，参考了英国案例Market Investigations Ltd v Minister of Social Security [1969] 2 QB 173及枢密院案例 Lee Ting Sang v Chung Chi Keung [1990] 2 AC 374，并引述以下重要段落:“…… the fundamental test to be applied is this: ‘If the person who has engaged himself to perform these services performing them as a person in business on his own account?’ If the answer to that question is ‘yes’, the contract is a contract for services. If the answer is ‘no’, then the contract is a contract of service. No exhaustive list has been compiled and perhaps no exhaustive list can be compiled of the considerations which are relevant in determining that question, nor can strict rules be laid down as to

the relative weight which the various considerations should carry in particular cases. The most that can be said is that control will no doubt always have to be considered, although it can no longer be regarded as the sole determining factor; and that factors which may be of importance are such matters as whether the man performing the services provides his own equipment, whether he hires his own helpers, what degree of financial risk he takes, what degree of responsibility for investment and management he has, and whether and how far he has an opportunity from sound management in the performance of his task.The modern approach to the question whether one person is another’s employee is therefore to examine all the features of their relationship against the background of the indicia developed in the abovementioned case-law with a view to deciding whether, as a matter of overall impression, the relationship is one of employment, bearing in mind the purpose for which the question is asked. It involves a nuanced and not a mechanical approach, as Mummery J emphasised in Hall v Lorimer (in a passage approved by the English Court of Appeal):‘……The object of the exercise is to paint a picture from the accumulation of detail. The overall effect can only be appreciated by standing back from the detailed picture which has been painted, by viewing it from a distance and by making an informed, considered, qualitative appreciation of the whole. It is a matter of evaluation of the overall effect of the detail, which is not necessarily the same as the sum total of the individual details. Not all details are of equal weight or importance in any given situation. The details may also vary in importance from one situation to another.’4. 大致上，关键是有关人士在提供服务时是否在自负盈亏经营生意，还是只是打工而已。要解答这问题，法庭须客观考虑所有案中有关因素，达致整体印象。至于有关双方曾选用甚么字眼去形容双方关系，并非决定性。5. 没争议的是谭先生在意外发生的前一天即 2005年 4月 25日，才开始为臧女士在意外发生的地铺执行装修工作。根据谭先生的陈述书和庭上证供，在相关的这两天工作之前，他向来都是替不同的雇主做装修工作，工资以日薪计算，一般以现金出粮。今次他是从报章招聘广告得悉有此装修技工空缺。他根据广告致电一位先生，双方在电话中说好以日薪港币 500元雇用谭先生，工时朝九晚六。6. 翌日即 2005年 4月 25日，谭先生前往上述地铺上工。在场除了该位先生外，还有一名女士。谭先生后来知道她是臧女士，并从意外后她呈交的表格 2中，得悉她申报是雇主。该先生和臧女士皆在该地铺视察装修工程进行。7. 谭先生被安排做木工。首天及意外当天上午的工作，皆按指派进行。当天下午，谭先生被指派装配吊柜。工作地点位于通往阁楼第二排楼梯对上位置。谭先生用从工地上拾回来的铁板，自行架起脚踏进行工作。这两天的工作中，其它工具材料都是由场地供应的。

8. 意外后即 2005年 5月 5日，谭先生返回该地铺递交病假纸。同日谭先生收取了港币 1,000元作为该两天工作的工资。9. 根据臧女士致法庭的文件及庭上证供，她指当初在电话中和谭先生交谈的是她的丈夫。并指在对话中，其丈夫已表明谭先生将会是自雇人士。另外，又提及有 3天试用期，如不合要求则决不录用；如对他工作满意，才“正式签约成为判工(自雇人士) ”。10. 在庭上被问及该所指 3天试用期内谭先生的身份又是甚么，臧女士一方面指谭先生是散工，另一方面指不甚清楚。当本席问臧女士如何理解“自雇人士”，她则指意思是无论发生任何事包括意外的责任皆由该人士自负。11. 另外，臧女士不否认谭先生是按指示执行正作。她承认工作材料由她供应。就工具方面，她指谭先生是用其它工人的工具，但指责他连应有的工具都没有带傋。12. 在观察证人并衡量证供及当时客观情况后，本席认为谭先生的说法，较臧女士的说法可信及切合实情。本席裁定事实上谭先生替臧女士工作该两天是雇员的身份，并非甚么判工或自雇人士。意外是否在受雇工作期间因工发生13. 根据谭先生，当天下午他被指派要装配吊柜，是在通往阁楼第二排楼梯对上的位置，他曾向管工问及有否工作台，但管工示意他自行解决。由于担心工作危险，他曾向臧女士的丈夫请辞，但被劝“ 做埋今日先啦”。谭先生亦同意。14. 如上所述，谭先生唯有自行以铁板架于楼梯对上位置作为脚踏。在装配吊柜时，该铁板突然滑开，他即失去平衡跌下。他的右手撞倒梯级受伤。其它工人告知臧女士，臧女士遂报警和召救伤车，并陪同谭先生到医院。15. 臧女士指，其实谭先生是被辞退并离开后，自行折返工地，继而报称意外发生。在臧女士于 2005年 5月 11日呈交的表格 2 内，其实并没有这些指称。但她在同一天，却想到致函劳工处处长作出所谓补充，指在当天意外之前，谭先生已请辞，并获她的丈夫接纳。其后谭先生自行折返。16. 在她 2006年 8月 14日致法庭的档，臧女士指是她本人要求谭先生辞职并实时发薪予他，亦亲眼看谭先生执拾自己的物品，然后离开工地。她于是质疑谭先生私自进入她的工地的原因。但她在庭上的证供，却指是由她的丈夫告诉她谭先生会离开。另外，她见谭先生先离开后折返才执拾自己的物品。至于她是如谭先生所指是在 2005年 5月 5日，或如她所指是在意外当日，支付该两天工资港币 1,000元，臧女士更表示因不是由她发薪予谭先生的，所以不清楚。17. 医院的诊断，显示谭先生右肩脱骹、膧痛、右无名指爆裂、及右边胫部擦伤。这些诊断和谭先生一方聘请的骨科专家的意见中，从未质疑谭先生的伤势，跟他所描述的意外发生经过有何不吻合。18. 基于谭先生在 2005年 4月 20日，即开始替她工作 5天前，才向劳工处申报了另一工伤，臧女士指有足够理由怀疑谭先生企图欺骗劳工处以获得工伤补偿。臧女士抗议谭先生明知已受伤，仍替他们工作而发生意外，是不当的行为。

19. 谭先生从来未有否认 4月 20日的意外。根据他和当时有关雇主呈交的表格2，他是搬运浴缸过重导致腰部受伤。但根据条例，只要雇员是在受雇期间因工受伤，即使意外可能因为雇员本身身体状况欠佳或力有不逮而发生，雇主仍有法律责任作出补偿：见 Ying Yuk Shan v South China Morning Post Publishers Limited, DCEC 479/2003 (2008年 1月 28日之判案书) 中援引(判案书第 38段)英国案例Wilson v Chatterton [1946] 1 KB 360, 第 368 页:“We infer that sick men and partially unfit and partly disabled men in employment were intended by Parliament to get the benefits of the Act just as much as the hale and hearty and perfectly fit men; for any intention of Parliament to exclude them must have found expression, and there is not a hint of it.”20. 条例的确有列明例外情况，雇主无须根据条例支付补偿。例如雇员因蓄意自伤：见第 5(2)(b) 条；或雇员曾在任何时间明知所作陈述是虚假而向雇主陈述他没有或以往没有受该损伤或受类似的损伤：见第 5(2)(c) 条。又或是雇员受伤可归因于其本身犯有严重和故意的不当行为，或雇员蓄意加重其在受雇工作期间因工遭遇意外所致伤势，那该伤引致的补偿将不获发给：见第 5(3) 条。但这些既非臧女士的指称，本席亦不认为臧女士证明了有这些条例列明的例外情况。事实上，文件显示就这较早前意外，谭先生已于 2005年 6月直接与当时雇主达成和解，赔偿金额亦只是港币 1,760元而已。21. 观察和衡量双方证供，本席认为臧女士的证供并不可靠。本席接纳谭先生就这方面的证供，即意外如他所述般，是在他受雇期间并因工发生的。谭先生的伤势22. 臧女士指谭先生的伤势并不严重，认为只需休养十天左右便可复原。她并无任何医学证据去支持这说法。23. 根据 2006年 1月 18日雇员补偿委员会的评占证明书，谭先生因多处受伤引致右肩膊疼痛及僵硬、及右无名指结疤，永久丧失赚取收入能力是 1.5%。委员会覆检后，于 2006年 4月 18日发出证明书，将他的右肩状况引致永久丧失赚取收入能力，调高至 3.5%。就这评估，谭先生根据条例第 18 条提出上诉。24. 谭先生一方提交了骨科专家区家裘医生在 2006年 12月 28日所作之报告。报告有以下主要内容：(1) 谭先生在医院接受了因肩膊脱位而进行的闭合复位手术，还有物理治疗及职业治疗。(2) 谭先生指右肩的侧面及前面仍有间歇性痛楚，约每天 5至 6次，每次历时半小时。提起右上肢亦会使他的右肩感到痛楚又酸软。(3) 区医生发觉谭先生右肩关节活动受到限制；右肩外展时稍觉酸软；右三角肌有萎缩情况。X光检查显示没有半脱位的后遗情况。(4) 谭先生右手无名指伤口以保守疗法治理，已完全康复。(5) 2006年 7月 29日至 8月 2日期间，谭先生在医院接受过与腰背有关的手术，其后要以轮椅代步。但这些手术与状况，与本案意外无关。

(6) 区医生认为谭先生已获得适当的治疗；而进一步的治疗将不会改善他的状况。区医生估计谭先生因右肩状况身体受损 4%，因而丧失赚取收入能力 5%。(7) 区医生认为因谭先生右肩状况，他不适宜再从事意外前的工作，而适合做不太粗重的工作，例如清洁工人、护卫员、工作量较轻的地盘工人、或信差等。(8) 区医生赞同委员会批予谭先生病假期的决定。补偿金额意外时平均月入25. 谭先生在意外发生时，只是第二天替臧女士工作，日薪港币 500元。根据臧女士，她当时聘请类似谭先生的工人，日薪是港币 400至 500元。根据谭先生，意外前他都是替不同雇主做类似装修散工，日薪约港币 500元。他的对上一份工作，即期间发生了 2005年 4月 20日意外该份，谭先生的所得日薪是港币 550元。这也有文件证明。26. 虽然根据谭先生的陈述书，及所提供作为参考的 2005年至 2007年所有选定行业的技工平均薪酬统计，都指平均每月工作日数是 26天。但在庭上，谭先生确认意外发生前的 12个月，他实在每个月工作 18至 26天。换言之，实际的平均每月工作日数中间数是 22天。27. 考虑过条例第 11(1) 、11(1A) 、及 11(2)条，及以上证据，本席认为，以日薪港币 500元及平均每月工作日数 22天去计算谭先生月入应是合理的。换言之，平均月入为港币 11,000元。暂时丧失工作能力方面的赔偿(第 10 条)28. 按条例第 10 条，谭先生可获补偿他病假期间所失，即 2005年 4月 27日至 7月 27日。根据条例和潘大律师提议的公式，金额为港币 11,000元/30 x 92天 x 4/5 = 港币 26,986.67元。永久丧失工作能力方面的赔偿(第 9 条)29. 上述区医生的专家意见，是谭先生因其右肩的状况，不再适宜从事意外前的工作；而较为适合从事不太粗重的工作，例如清洁工人、信差、保安员、或较轻巧的地盘杂工。30. 根据谭先生，他曾尝试在意外后的 8月份做过装修，但因工作需要搬动很重的英泥，所以约两天后他再不能继续下去。9月份，他曾做过油漆工作 1星期，日薪港币 600元，后因右肩仍感疼痛，故不能继续下去。谭先生现年 51岁。本席接纳谭先生的右肩问题令他实际上只适合从事该些不太粗重的工作。谭先生指他也有透过不同型式寻找例如搬货、清洁、看更、酒楼楼面、或地盘杂工等，但雇主多表示已聘请他人。31. 谭先生所受的右肩膊脱位，不属条例附表一指明损伤。代表他的潘大律师指，条例第 9(1)(b) 条和案例Hong Kong Paper Mills Ltd v Chan Hin Wu CACV 45/1981(及在 Lui Kwong Yan v Shu Hing Decoration Workers & Anor [1993] 1 HKLR 168案中解释) 的公式，适用于计算谭先生永久地部份丧失赚取收入能力方面的赔偿。

32. 上述谭先生一方提供的统计，亦包括了区医生建议谭先生现在可以应付较轻巧的某几种工作的平均月薪。当中男性保安员平均月薪为港币 7,277元；男性杂工平均月薪为港币 8,252元；男性信差/办公室助理平均月薪为港币 8,172元；一般男性清洁工平均月薪为港币 5,325元。33. 本席同意应用上述公式，但较倾向采纳上述平均月薪较中间的工种作计算参考。以保安员为例，平均月薪为港币 7,277元。按上述公式，谭先生丧失工作能力的百分比将会是(11,000 – 7,277 ) / 11,000，等如 34%。34. 按条例第 9(1)(b) 条，法庭须考虑以此公式计算得出的百分比，不会超越附表一及附注所指就完全失去有关损伤身体部份时丧失赚取收入能力的百分比。同时，亦须尽可能顾及该附表及附注所指明的百分率计算比例。如上所述，附表一列出的损伤中，有关肩膊关节部份的，乃“肩关节强硬”。此状况若出现在最自然位置的，其丧失赚取收入能力为 35%；若出现在最悪劣位置的，则达55%。35. 代表谭先生的潘大律师，也借参考这附表一有关肩关节强硬状况下丧失赚取收能力的百分率，去印证肩关节对谭先生活动及赚取收入能力的重要性，及区医生所作评估的合理性。综合及比对后，本席认为 34%是合理的百分比。本席批准谭先生据第 18 条提出的上诉。36. 在意外发生时，谭先生 51岁。根据条例第 7及 9 条，补偿金额应该是港币11,000 x 72 x 34%，等如港币 269,280元。37. 谭先生在意外受伤后，2006年下旬因本身腰背问题进行过手术；后因并发情形再接受手术。其后需要以轮椅代步。审讯时谭先生依然需要倚赖拐杖行动。区医生指这此皆与意外无关；谭先生在庭上亦确认这点。或可想象的，是无论本意外有否发生，谭先生的腰背问题也可能会于 2006年令他丧失原有的工作和赚取收入能力。但鉴于条例下的赔偿基制，本席认为不影响谭先生的追讨：见终审案件 LKK Trans Ltd v Wong Hoi Chung, FACV 14/2005，判案书第 37至 47段。另外，亦没有指称谭先生的腰背问题是由于其后任何意外产生的：见 LKK Trans Ltd 判案书第 49段。医疗费用方面的赔偿(第 10A 条)38. 谭先生确认他的医疗费用港币 1,530元已被豁免。总结39. 谭先生应得的补偿是：根据第 9 条港币 269,280.00元根据第 10 条港币 26,986.67元根据第 10A 条无合共：港币 296,266.67元命令40. 本席判谭先生申请得直。臧女士须支付谭先生雇员补偿合共港币 296,266.67

元连利息。由工伤发生当天(即 2005年 4月 26日) 起至今天之利息，以半判定利率计算；今天起至全数支付为止的利息则以判定利率计算。41. 臧女士同时须支付本申请之讼费；若双方未能协议讼费，则由法庭评定。本席并同意颁发大律师证书。谭先生本身的讼费须根据《法律援助规则》评定。此讼费命令乃暂准性质；若任何一方不在今天起计 14天内要求法庭聆讯讼费问题，命令则自动作实。区域法院法官梁俊文出席人士：申请人：由法律援助署委派 Messrs Godwin Chan & Co及转聘潘展平大律师代表答辩人：亲身应讯，无律师代表

Web viewIt follows that holiday pay and annual leave pay form a context which requires that the word...

Documents

Transcript of Web viewIt follows that holiday pay and annual leave pay form a context which requires that the word...