Advertisement

New holiday-pay deal confirms commissions as part of wages

Reading Time:2 minutes
Why you can trust SCMP

The Labour Advisory Board reached a deal with workers and bosses yesterday on how to calculate holiday pay for 600,000 workers whose monthly income is derived mainly from commissions.

Advertisement

Six labour representatives and three employer group leaders have agreed with a government proposal to calculate a worker's holiday pay based on the average daily wage - including commission - over the previous 12 months.

Previously, it relied only on the previous month's earnings.

Permanent Secretary for Economic Development and Labour Matthew Cheung Kin-chung said he was pleased with the outcome, which would be fairer than previous practices.

'The average daily wages calculated on this basis would be more stable, predictable and equitable,' he said.

Advertisement

Commissions had always been accepted as a component of wages in calculating holiday pay until the Court of Final Appeal dismissed in March a claim for $200,000 by a Philip Wain fitness centre worker who said her employer calculated her holiday pay only on her basic salary and excluded her commissions. The judge ruled that commissions did not fit the law's definition of a daily wage.

The ruling sparked many labour disputes as bosses imposed their interpretation of workers' contracts in light of the court judgment.

loading
Advertisement