Travel firm denied appeal on ruling over guides' tips

PUBLISHED : Thursday, 09 October, 2008, 12:00am
UPDATED : Thursday, 09 October, 2008, 12:00am

Verdict that service fees are income is final, says court

The Court of Appeal refused to give permission to Wing On Travel yesterday to appeal in the top court against a ruling that tips should be included in the wages of tour guides for the purpose of claiming holiday pay.

The Travel Industry Council expressed concern over the ruling, saying it might push up labour costs and that consumers might have to shoulder the increase.

Mr Justice Anthony Rogers, Mrs Justice Doreen Le Pichon and Mr Justice Azizul Suffiad refused to grant leave to the travel agency to appeal.

Yau Tik-wai, assistant general manager of Wing On Travel, said outside court that the company was disappointed by the decision.

When asked whether the firm would make another attempt to obtain leave from the Court of Final Appeal directly, Mr Yau said Wing On Travel would seek advice from lawyers before making a decision.

Yesterday's application stemmed from a Court of Appeal judgment in May ruling that the Employment Ordinance stated tips that tour guides or escorts received from visitors should be recognised as part of their wages.

In the May ruling, Mrs Justice Le Pichon said: 'The reality is that the income of the tour guides comprised not only the basic salary, but also the net tips earned.'

The case was brought to the Court of Appeal by tour guide Lam Pik-shan, one of 15 claimants who went to the Labour Tribunal in 2004. The claimants wanted the service fees included in the calculations for compensation for extra days they had worked. Tips make up 90 per cent of tour guides' income.

Ms Lam joined the company in April 1997 and her contract was terminated in February 2003, when her basic salary was only HK$2,200. She was seeking about HK$150,000 from the company, including annual leave pay, statutory holidays and overtime.

The tribunal, however, rejected the claims in 2005 and Ms Lam appealed against the decision in the Court of First Instance, which ruled in June last year that tips were part of her pay. The Court of Appeal subsequently upheld the decision in May.

Yesterday, Mr Justice Rogers refused to grant leave for the appeal because he said it did not involve great public importance.

At a press conference yesterday, Ms Lam hailed the ruling as a victory for all tour guides. 'The company did not consider the tips as part of my salary when it paid me to work while I should have been on paid holiday. It therefore paid me very little for my extra working days. But when the company filled in tax forms for tour escorts, it considered the tips in our basic salary,' she said.

'The Inland Revenue Department then asked us to pay tax on money that we had never received. This is unfair.'

Dicky Tong Kim-sang, of the Hong Kong Travel Industry (Outbound) Tour Escort and Tour Guide Union, said it was handling about 100 similar cases.

'Our union has already filed these 100 cases with the Labour Tribunal. If Wing On Travel does not file an appeal, then these cases will be handled by the tribunal,' he said.

'We appeal to all tour escorts who are facing the same problems to come forward and file a case against their employing companies, to claim back money that they deserve.'

Ronnie Ho Pak-ting, chairman of the Travel Industry Council, said the court case would have a huge impact on travel agencies, especially those that hired many guides. 'The cost of human resources will surely go up and the extra cost might be shifted to consumers. The council will have a meeting to study the impact of the case on the whole industry.'


A former tour guide at Wing On Travel hails the ruling that tips were part of her salary

The number of similar cases is: 100


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