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Anita Lam

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.

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.

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.

Under the new proposal, the law will be amended to state clearly that commissions are a part of wages and should be included in the calculation of all holiday pay.

The Labour Department will table the bill in the Legislative Council on September 25.

Stanley Lau Chin-ho,  deputy chairman of the Federation of Hong Kong Industries,  said the government had gained support from the chambers of commerce to change the definition.

'[The chambers of commerce] believe this is what the government wants and they voted for it,' he said.

But Mr Lau said some employers may now be forced to change some of their workers' contracts to partnerships as bosses could not predict their wage bill,  while some small and medium enterprises may have to close.

The Federation of Trade Unions supported the new proposal and urged the government to table the amendments to Legco as soon as possible.



New holiday-pay deal confirms commissions as part of wages