People whose pay includes monthly commissions are not entitled to anything more than their basic salary when they go on holiday, the Court of Final Appeal has ruled.
The court was hearing an appeal from Lisbeth Enterprises, which operates the Phillip Wain chain of women's health and beauty clubs, and a worker, Mandy Luk See-ming, who derived most of her income from commissions.
Ms Luk's contract provided for 10 days of annual leave to be paid at 'full salary'. She received a base salary of $5,600 and commission paid according to performance. It was claimed that her commission most months was generally more than 10 times her basic wage.
Ms Luk brought a case against Lisbeth soon after leaving its employ. She and another worker claimed the company owed them money for holidays and annual leave pay because it had paid them only according to the base wage and not total income.
The case was initially dismissed by the Labour Tribunal, which said holiday pay did not take into effect contractual commissions, but the Court of First Instance and the Court of Appeal agreed with Ms Luk that it was part of the calculation.
At issue were two sections of the Employment Ordinance that provided for both annual leave pay and holiday pay - both say the pay is calculated based on daily wage rates.