Stopover allowance part of pay, Cathay appeal told

PUBLISHED : Wednesday, 14 October, 2009, 12:00am
UPDATED : Wednesday, 14 October, 2009, 12:00am

Allowances paid to cover airline flight attendants' expenses during their stays overseas between flights are part of their wages and should be taken into account in calculating their holiday pay, a court has been told.

The argument came during the hearing of the appeal by three Cathay Pacific flight attendants against a Labour Tribunal ruling that excluded their 'outports allowance' from their wages.

Under their employment contracts, the allowance includes overnight, meal and laundry allowances paid according to the rates laid down in the company's operation manual.

Becky Kwan Siu-wa, Vera Wu Yee-mei and Jenny Ho Kit-man want the amounts added to the base from which their holiday pay is calculated.

Barrister Erik Shum Sze-man, for the flight attendants, argued in the Court of First Instance yesterday that the payment was a 'non-accountable allowance' that was based on a pre-estimate of their expenses and no receipts were required.

He told Mr Justice William Stone that the Employment Ordinance required all allowances, excluding 'special expenses', to be considered as part of wages. He said the outports payment was not regarded as 'special expenses' and was therefore part of their wages. He said attendants' wages should be calculated daily because they did not have a fixed monthly rate and were paid depending on their flight patterns.

For Cathay, Ashley Burns SC countered that the outports payments should not be part of wages because they were paid irregularly and it was impossible to calculate them on a daily basis. He said the outports payments should not be regarded as wages as they were paid to defray attendants' expenses during stopovers when they were off duty.

Stone reserved his judgment.

In January, the Labour Tribunal held that the line-duty and ground-duty allowances, which were paid on top of the attendants' normal salary according to the hours they worked, should be counted in when the company calculated their holiday pay because the allowances were paid as part of their daily work.

But the tribunal said the outport allowances should be excluded because they were sums 'payable to the employee to defray special expenses incurred by him by the nature of his employment'.

More than 4,000 similar claims lodged with the tribunal, believed to total more than HK$400 million, are awaiting Stone's ruling.