Employment Ordinance - Commission Pay

Mr Matthew Cheung Kin-chung, JP Permanent Secretary for Economic Development and Labour (Labour) & Commissioner for Labour 16/F Harbour Building 38 Pier Road Central Hong Kong Dear Mr Cheung, The proposed changes to the Employment Ordinance, to amend the provisions for holiday pay and annual leave pay, was reviewed by the Hong Kong General Chamber of Commerce's Economic Policy, Manpower, Legal and SME committees. Members noted the Court of Final Appeal ruling in the “Lisbeth Enterprises” case regarding commission accrued and calculated on a monthly basis and the Labour Department's intention to amend the Employment Ordinance. Members of the committees consulted noted that contractual commission in various forms is very common in Hong Kong. In their view, employers are concerned that the proposed amendments would have an adverse impact on employer-employee relations. After review by the General Committee, the Chamber has adopted the following position: The formula set out under Sections 41 and 41C of the Employment Ordinance for calculating statutory holiday pay and annual leave pay, respectively, is itself inadequate to produce a justifiable calculation of the statutory entitlements. Hence, it is suggested that the Labour Department should first look carefully into the specific sections under the Employment Ordinance and consider the potential implications to employers and employees before amending the law to include commissions into calculation of statutory entitlements. On behalf of the Chamber, Sincerely yours, David O'Rear Chief Economist cc: Mr KK Yeung, Mr Jeffrey Lam