Airline ignored spirit of contract in cutting pilot's pay, High Court rules

PUBLISHED : Friday, 09 July, 2010, 12:00am
UPDATED : Friday, 09 July, 2010, 12:00am

A Hong Kong-based airline came under fire from a High Court judge for 'snubbing the contractual spirit' by unilaterally cutting the salary of a pilot by 20 per cent.

After its appeal was dismissed yesterday, Hong Kong Airlines said it would take the legal battle to the Court of Final Appeal.

In his judgment, Court of First Instance judge Mr Justice Pang Kin-kee accused the airline of 'twisting the arguments' and 'snubbing the contractual spirit' because the company had not obtained written approval or any other form of consent from the pilot before it cut his monthly salary from HK$135,000 to HK$100,800 for the period between January and April of last year.

The employment contract clearly stated that both sides were obliged to obtain consent for any changes to employment terms, the judge said.

But the airline argued that it genuinely believed the pilot had accepted the pay cut, as he had made no objections to it during the four-month period of the cut. The issue was officially raised by the pilot only when he was fired in May of last year.

At the appeal hearing, barrister Shahmim Khattak, for the airline, argued that the company had honestly believed that the pilot had already accepted the pay cut.

But Pang disagreed. He said the company should not presume its workers had accepted pay cuts simply because they did not react promptly.

'I agree that the worker was not slow in response, as he brought it up with the company a few months later,' the judge said.

The airline was fined HK$24,000 in Tsuen Wan Court in January of this year for breach of the Employment Ordinance over the outstanding salary due to the pilot.

The court action was launched by the Labour Department after it received a complaint.

The Employment Ordinance states that wages due upon expiry of the last day of a wage period or upon termination of employment shall be paid as soon as practicable, but not later than seven days.

Any employer who fails to do so wilfully and without a reasonable excuse could face a maximum fine of HK$350,000 and imprisonment for three years, the department warned.