CHAN HOI CHI AND NOTHER v. CITY TELECOM (HK) LTD

IN THE SUPREME COURT OF HONG KONG

LABOUR TRIBUNAL APPEAL NO. 15 OF 1996

(CLAIM NO. E5507 OF 1995

COUNTERCLAIMS NOS. E5855 & E5858 OF 1995)

-----------------

-----------------

JUDGMENT

-----------------

Facts

1. In the Labour Tribunal, the two Claimants, who were former employees of the Appellant sought, among other things, "over-achieved bonus" from the Appellant.

2. The Claimants were sales persons. Apart from receiving a monthly commission based on the actual sales carried out by them, they were also entitled to "achieve bonus". The sales persons have to project the volume of sales that they would be able to achieve in a year and a percentage bonus based on the amount of the projected figure would be awarded on the monthly sale increment. The award would be paid monthly. At the end of the year, or when the sales persons leave the employ, if their actual sales figure is less than the projected figure, they have to repay the employer any overpaid bonus by a stated formula. On the other hand, if the actual sales figure exceeds the projected figure, they are entitled to an "over-achieved bonus". This bonus would be paid at the end of the year.

3. In February 1995, the 1st Claimant signed a projected plan for 1995 with a sales figure of $640,000. The bonus was 10%. On 28th January 1995 the 2nd Claimant signed a projected plan with a figure of $480,000. The bonus was 6%.

4. By the end of May 1995, the employer asked the employees to revise the plans. Under the new plan, the percentage of the bonus would be reduced.

5. Both the Claimants eventually signed the new plans in June 1995. From the new plan, one could see that a 6% bonus would be awarded on a projected sale of $560,000, whereas the same percentage bonus was based earlier on $480,000, and a 8% bonus would be awarded on a projected figure of $640,000, whereas the projected sale would previously attract a 10% bonus.

6. The new plan also stated that no "over-achieved bonus" would be paid if the employees resign or terminate from the employment before the year end. There was no similar provision in the old plan.

7. The Claimant's case was that Mr Wong, a director of the employer, had stated in a meeting that in respect of the old plan "it would be finalised and bonus would be paid calculated up to 31st May". Based on the sales figure up to 31st May 1996, the Claimants were entitled to "over-achieved bonus". They left the employ in August but the employer did not pay them the "over-achieved bonus".

Grounds of appeal

8. The learned Presiding Officer found for the Claimants and awarded them the "over-achieved bonus". The grounds of appeal of the employer is that the employee should not be entitled to the extra bonus should he resign before the end of the year: see letter of 29th January, 1996. This presumably is a reference to the terms of the new plan. Mr Wong, the director who appeared in this appeal elaborated on this point in his written submissions handed up at the hearing.

The decision

9. At page 6 of the Reasons for Decision, the Presiding Officer stated this:

"Under the revised sale plan, the percentage of achievement bonus has been amended. It would affect the overall performance. It is natural for the salesmen to raise queries on how to resolve the problem. It makes sense if Mr Wong agrees to calculate the OAB as at 31/5/95. That must be his statement of (埋單計數). I found that as a co-lateral agreement for the salesmen to sign the revised sales plan and therefore the Defendant is bound by the agreement."

10. I agree with his view. The revised plan was obviously disadvantageous to the employees. If an employee had previously opted for a projected income of $640,000, he would receive a bonus of 10%, but under the new plan he would only receive a bonus of 8%. He would have to achieve a higher volume of sales in order to achieve the same bonus.

11. Furthermore, a review of the evidence of the witnesses for the employer do not, in my view, contradict the Claimants' case. Mr Wong did not attend the hearing at the Labour Tribunal.

At page 14 of the Notes of Proceedings, DW1 was asked:

At page 16, DW2 said:

"In the meeting, Mr Wong did say the account be cut off. I understand there be a calculation of the over achievement bonus. But the same would not be paid until the end of the year."

DW3 at page 18, stated this:

"At first meeting he said cut off and calculate payment. But he did not mention immediate payment. When we clarify with him after the second meeting, he told us certainly the bonus would not be paid until end of the year."

12. All these points to one conclusion, namely the employees were entitled to the "over-achieved bonus" for the period up to 31st May 1995. This could only mean that the projected figure would have to be apportioned up to 31st May 1995. If the actual sales of the employee up to 31st May 1995 exceeded the apportioned projected figure, then they were entitled to the "over-achieved" bonus, although the payment would only be made at the end of the year.

13. As to the issue whether Mr Wong had told the sales persons that those who left before the year end would not be entitled to "over-achieved" bonus, the Presiding Officer had fully considered the evidence and come to the view that he did not. At page 7 of the Reasons for Decision he stated this:

This conclusion reached by the Presiding Officer is supported by the evidence. For example, although DW1 at page 13 stated that "left before the end of the year, no payment" and DW2 at page 16 stated "Staff left before the end of the year will not get over-achieved bonus", DW1 also stated that "after the second meeting, the accounts managers met Mr Wong and it was then said that there would be no over-achieved bonus if we left". DW3 also said this: "Mr Wong did not mention if the staff left before the end of the year, he would not get paid, therefore we clarify with Mr Wong." Hence, irrespective of the terns of the new plan, the actual agreement was that the "over-achieved bonus" earned up to 31st May 1995 would be paid.

Appeal dismissed

14. Appeals from the Labour Tribunal is based on points of law. I can see no error being committed and the appeal is therefore dismissed.