Partial win for Cathay attendants on appeal

PUBLISHED : Friday, 18 March, 2011, 12:00am
UPDATED : Friday, 18 March, 2011, 12:00am

The Court of Appeal has ruled that Cathay Pacific Airways should include commission for selling duty-free goods and certain allowances when calculating flight attendants' holiday pay, in a decision partially welcomed by their union.

In a judgment handed down yesterday, the court said that line-duty allowance and ground-duty allowance - payments attendants receive for time in the air and waiting for flights - as well as commissions they earned from selling duty-free goods should be included in the holiday-pay calculations.

'We think in those respects it was a fair judgment,' the chairwoman of the Flight Attendants' Union, Dora Lai Yuk-sin, said.

However, the court ruled that outport-duty allowance - payments to cover flight attendants' expenses during overseas stays between flights - should be excluded in holiday-pay calculations. It also sent an issue regarding holiday pay for one attendant back to the Labour Tribunal to decide. The attendant was employed on a monthly basis with a guaranteed monthly pay, the court said.

The ruling stems from cases involving three flight attendants who lodged claims at the Labour Tribunal. The tribunal had ruled in their favour regarding the allowances and commissions and ordered Cathay to pay shortfalls, but Cathay later won an appeal. The attendants then appealed against that decision, leading to yesterday's judgment.

Cathay said it was pleased that the Court of Appeal upheld an earlier ruling that outport allowances were not 'wages' under the Employment Ordinance. 'This decision provides legal certainty regarding the provisions of the ordinance and we are pleased that this has been clarified,' a spokesman for the airline said.

The spokesman added: 'However, we are disappointed with the decision on other aspects of the ruling, on which we will be seeking legal advice and consider our next step.'

Lai said that based on the union's calculations, if the attendants had won on all counts including the outport allowance and the holiday pay issue sent back to the Labour Tribunal, Cathay would have had to pay HK$300 million. However, because the ruling excluded these two matters, an estimate could not be made.

In the written ruling, Mr Justice Peter Cheung Chak-yau said the line-duty allowance and ground-duty allowance were 'clearly' payments to Cathay employees for work done or to be done under their contracts.

'They are not allowances of a gratuitous nature nor paid at the discretion of [Cathay]. They are part and parcel of the employees' remuneration when they perform their contractual duty.'

He said the ordinance clearly mandated that wages meant all remuneration and allowances payable to an employee for work done or to be done under his contract, with some specified exceptions. 'This is to avoid employees, particularly those without bargaining power, from being unfairly deprived of their benefits.'

The cases involved flight attendants Becky Kwan Siu-wa, Vera Wu Yee-mei and Jenny Ho Kit-man.