Board seeks to clarify definition of salary

PUBLISHED : Tuesday, 25 April, 2006, 12:00am
UPDATED : Tuesday, 25 April, 2006, 12:00am

The Labour Advisory Board is seeking to amend the Employers Ordinance to ensure that the meaning of wages is clear after a ruling that commissions did not have to be considered when calculating workers' statutory benefits.

The Court of Final Appeal in March ruled against worker Mandy Luk See-ming's claim of $200,000 in holiday pay which was based on her basic salary and commissions on sales over a month. The judge decided commissions did not fit the definition of a daily wage because the Employers Ordinance covered what an employee 'would' have earned, not what they 'might' have earned. Ms Luk was a former worker of Lisbeth Enterprises - a holding company of the Philip Wain chain of women's health and beauty clubs.

The Labour Department believes the original intention of the ordinance was to include - when calculating all statutory benefits - the one-month termination notice payment, severance pay, maternity leave, annual leave, statutory holiday and sick leave.

Employer representatives on the board agreed, in principle, to amend legislation to include monthly commission as wages, but have not agreed on the calculation.

Ip Wai-ming, deputy director of the Federation of Trade Unions, and a board member, said usually calculating a worker's holiday pay was to base it on the last month's salary. But employer representative Ho Sai-chu said such a method could be biased. 'If there is a huge transaction, and the worker receives a large amount of commission, [for a certain month] do we calculate [the holiday pay] based on that month's earnings?'

Legislator Andrew Leung Kwan-yuen, of the business sector, said if the method was based on a longer period of time it would be fairer.

Both parties will hold talks by the end of next month.