MAK CHIU YING AND OTHERS v. LA CUISINE SEAFOOD RESTAURANT

IN THE SUPREME COURT OF HONG KONG

LABOUR TRIBUNAL APPEAL NO. 68 OF 1994

(ON APPEAL FROM EASTERN LABOUR TRIBUNAL
CLAIM NO. E-3638/93 C/W E-3644/93)

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J U D G M E N T

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1. This is an appeal against an award for year end bonus made by the learned Presiding Officer on 13 July 1994 in favour of 5 claimants against their former employer, the appellant in this appeal. Leave to appeal was granted on 13 September 1994 on the ground that the learned Presiding Officer erred in law and in fact in finding that all respondents had worked for the appellant for half a year for the year under consideration to give rise to an entitlement for pro rata year end bonus.

2. None of the respondents made any claim for pro rata year end bonus in their claim forms. Their claims were for arrears of wages, annual leave pay, statutory holidays pay and severance payments. It is therefore not surprising that in their statements to the tribunal officers the circumstances that would give rise to an entitlement to year end bonus were not gone into. On the contrary, it was clearly stated by all of them in their said statements that no year end bonus was payable. It was during the course of the trial that the issue of year end bonus was raised. The learned Presiding Officer then granted leave to the respondents to add a claim for year end bonus. However, it is most unfortunate that the issue was never explored at any length at all during the trial. Only a few questions were asked of the Respondents by the learned Presiding Officer on this issue. The state of evidence relating to this particular claim is far from being satisfactory or adequate. It was never canvassed in evidence whether any bonus payable was of a contractual or gratuitous nature. It is also wholly unclear from the record whether the year under consideration for the purpose of considering year end bonus should be a lunar year or the Gregorian year.

3. Section 11A of the Employment Ordinance Cap. 57 excludes annual bonus ¨which is of a gratuitous nature or which is payable only at the discretion of the employer〃. There is no finding from the learned Presiding Officer as to the nature of the alleged bonus. It appears that the issue was never considered either during evidence or when the reasons for the award were given.

4. Section 11B applies the provisions of Part IIA of the Ordinance to "an employee employed under a continuous contract if an end of year payment is payable by the employer to that employee by virtue of a term or condition (whether written or oral, express or implied) of the contract of employment〃. No reference was made by the learned Presiding Officer in his reasons to any written document or oral testimony of witness relating to any contractual term for payment of a year end bonus. But, in fact, there was a provision in the "resume for employees" providing for such matters. In clause 5 it was stipulated that "if the company issues annual bonus, it would be calculated on the basis of the basic monthly wages and the average for the months in employment (minimum period of employment is 3 months). Only those still employed as at the date when such annual bonus is paid can enjoy such a benefit." It appears, prima facie, that there are qualifications to be satisfied before any entitlement to such bonus can arise. The learned Presiding Officer ought to have looked into the said clause, considered its proper interpretation and effect prior to a decision on the applicability of the provisions in Part IIA to the employment of the respondents.

5. Furthermore, no reference was made by the learned Presiding Officer in his reasons to the basis for his finding that the respondents should be entitled to a pro rata bonus for the "half year" they were employed by the appellant. The respondents left the employment of the appellant on 30 June 1993 - a fact though not the subject matter of any finding by the learned Presiding Officer in his reasons, was nevertheless not disputed at the trial. By finding that the respondents had worked for the appellant "for half a year for the current year before they were dismissed", the learned Presiding Officer effectively adopted the Gregorian year as the effective year for the purpose of calculation under s.11F. Though there is no evidence adduced at the trial when did the lunar year commenced in 1993, I can take judicial notice that it commenced on 23 January 1993.

6. There is no indication in the reasons of the learned Presiding Officer that the effect of s.11C of the Ordinance has been duly considered by the tribunal. Section 11C provides that the payment period in respect of which an annual bonus is payable under Part IIA shall be the payment period specified in the contract of employment, or if it was not so specified, a lunar year. I am unable to find any stipulations in the "resume for employees" specifying the payment period for the bonus. In the premises, it would appear that, in the absence of other evidence to the contrary, the payment period for the respondents' claims should be calculated in accordance with the lunar year rather than the Gregorian year. A period of less than 6 months had lapsed between 23 January and 30 June in 1993. To be exact, only 5 months and 11 days had lapsed according to the lunar year. Thus, the finding that the respondent had worked for half a year in the year under consideration by the tribunal is an erroneous finding of fact brought about by an error of law in respect of the effective payment period. Section 11F of the Ordinance provides that to be entitled to a pro rata bonus, the employee must have been employed for not less than 26 weeks in the payment period. From 23 January 1993, the respondents had only been employed for 22 1/2 weeks before they were dismissed on 30 June. Furthermore, clause 3 of the "resume for employees", if it formed part of the contract of employment, restricted entitlement to those who are still employed at the time when the bonus is payable. The effect of this on the provisions of the Ordinance should have been considered by the learned Presiding Officer.

7. I have come to the conclusion that it would not be just for me to draw inferences from the available evidence when the issues had not been properly explored before the tribunal. The proper way to bring the matter to a just end is to remit the case to the learned Presiding Officer with a direction that he do further consider the said claim for year end bonus in a rehearing. During the rehearing the learned Presiding Officer should bear in mind the issues of law and fact raised in this judgment in making specific findings of law and fact before determining the claim. No fault can be attributed to any of the parties presently before me, thus no order as to costs of the appeal was made.

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