Court Case: No Employer Have the Right to Use Any Means or Methods to Reduce the Employees’ Benefits on Rest Days.
Facts
Mr. Yam and other 9 persons were employed by a restaurant and were retrenched on 31 March 2000 because the business suffered a loss. Their redundancy payment did not include any rest day compensation. Terms of their employment contracts stipulated that the employees could enjoy 4 statutory rest days per month, but they agreed to take rest on 2 days only and worked on the remaining 2 days. The employer considered that extra pay for having to work on the 2 rest days had been included in their monthly salary. On the contrary, the employees opined that the employer failed to comply with the rest day provisions under the Employment Ordinance and decided to claim rest day compensation at the Labour Tribunal.
Ruling of the Labour Tribunal
By setting out in the employment contract and requesting employees to consent to take 2 rest days while working on the remaining 2 rest days every month, the employer contravened the Employment Ordinance which provides for an employee’s entitlement of having at least one rest day in every period of seven days. Besides, no employer had the right to oblige an employee by contract or compel any employee to work on a rest day. The relevant contract term therefore would be treated as void under the Ordinance. Since the employees were unable to enjoy all their rest days during employment and were retrenched, the employer was required to pay them rest day compensation.
Grounds of Appeal
The employer disagreed with the ruling of the Labour Tribunal and appealed to the Court of First Instance for the following reasons:
Mr. Yam and other 9 persons were employed by a restaurant and were retrenched on 31 March 2000 because the business suffered a loss. Their redundancy payment did not include any rest day compensation. Terms of their employment contracts stipulated that the employees could enjoy 4 statutory rest days per month, but they agreed to take rest on 2 days only and worked on the remaining 2 days. The employer considered that extra pay for having to work on the 2 rest days had been included in their monthly salary. On the contrary, the employees opined that the employer failed to comply with the rest day provisions under the Employment Ordinance and decided to claim rest day compensation at the Labour Tribunal.
Point of Contention
Whether it will be in contravention to the Employment Ordinance if the terms of an employment contract set out that the employee agreed to work on some of the rest days.
Whether it will be in contravention to the Employment Ordinance if the terms of an employment contract set out that the employee agreed to work on some of the rest days.
Ruling of the Labour Tribunal
By setting out in the employment contract and requesting employees to consent to take 2 rest days while working on the remaining 2 rest days every month, the employer contravened the Employment Ordinance which provides for an employee’s entitlement of having at least one rest day in every period of seven days. Besides, no employer had the right to oblige an employee by contract or compel any employee to work on a rest day. The relevant contract term therefore would be treated as void under the Ordinance. Since the employees were unable to enjoy all their rest days during employment and were retrenched, the employer was required to pay them rest day compensation.
Grounds of Appeal
The employer disagreed with the ruling of the Labour Tribunal and appealed to the Court of First Instance for the following reasons:
1. The employees could choose to enjoy all 4 rest days and refuse working for the employer on such days.
2. The monthly salary of employees had included extra pay for their work on rest days. Employees might receive double benefit if the employer had to give further rest day compensation to them.
Ruling of the Court of First Instance of the High Court
The Court of First Instance maintained the ruling of the Labour Tribunal and held that:
The Court of First Instance maintained the ruling of the Labour Tribunal and held that:
1. The employees had no choice whether or not to abstain from working on 2 out of their 4 rest
days each month. Besides, if an employee had taken leave for more than the contract specified, he would be regarded as absent and wages would be deducted.
2. The employer did not have the right to use any means or methods to reduce the employees’ benefits. It was not acceptable even if such practices were common in the industry.
3. Even though the employees might receive double benefit, it was the result of the employer’s intent to evade his liability on employees’ protection.
3. Even though the employees might receive double benefit, it was the result of the employer’s intent to evade his liability on employees’ protection.
Grounds of Appeal
The employer appealed to the Court of Appeal and put forward the following reasons:
The employer appealed to the Court of Appeal and put forward the following reasons:
1. Both parties entering into employment contract had the liberty to negotiate on any contract
terms.
2. The employees had received extra pay for the rest day work. Further rest day pay would amount to double benefits.
Ruling of the Court of Appeal
The Court of Appeal did not accept the contention of the employer about freedom on negotiation of whatever contract terms and held that the terms agreed between the parties must be allowed under the law. The Court inferred that as the contract term about rest day of the current case was in conflict with the Employment Ordinance, such term was void. The reasoning of the Court was:
The Court of Appeal did not accept the contention of the employer about freedom on negotiation of whatever contract terms and held that the terms agreed between the parties must be allowed under the law. The Court inferred that as the contract term about rest day of the current case was in conflict with the Employment Ordinance, such term was void. The reasoning of the Court was:
1. The contract term had reduced the employee’s rights and protection on rest days. The employer failed to adhere to the Employment Ordinance and to arrange employees with one rest day in every period of seven days.
2. If the employees failed to obtain the consent of the employer and took rest on days other than the 2 rest days specified in the employment contract, they would be regarded as breaching the contract.
3. The contract term made the employees feel that if they opted to take rest on “a rest day that they were expected to work”, they would violate the employment contract and would result in dismissal or disciplinary actions.
With regard to the double benefits of employees on rest day compensation, the Court of Appeal concluded that if extra pay on the rest day work was proven to have been paid to the employees, they should not have further compensation.
(Adapted from HCLA9/2001 & CACV1950/2001)
With regard to the double benefits of employees on rest day compensation, the Court of Appeal concluded that if extra pay on the rest day work was proven to have been paid to the employees, they should not have further compensation.
(Adapted from HCLA9/2001 & CACV1950/2001)
Practices of Good People Management
- If there are operational needs for an employee to work on rest days, the employer should obtain the employee’s consent each time before arranging him/her to work on rest day originally scheduled.
- An employer should maintain the records of his/her employees’ consent for working on the nominated rest days.
- An employer should clearly set out the compensation for his/her employees if they are required to work on rest days. If the compensation is made in the form of a substituted rest day, it must be arranged within the same month before the original rest day or within 30 days after it. If the compensation is made in pecuniary terms, the daily rate should be specified and payment should be made within the same wage period to which the original rest day belongs.
- An employer should devise a reasonable rest day roster for employees who are required to undertake shift duties. This is to avoid employees working prolonged hours and to maintain their efficiency and productivity.
- Rest days, statutory holidays and paid annual leaves are different types of leave and could not be used to substitute each other.
- Employer should note the restriction on payment in lieu of granting leaves under the Employment Ordinance.
- To meet the needs of both parties, employer should negotiate with his/her employees in advance the arrangement of different kinds of holidays.
- An employer should keep a proper record of the leave arrangements and details of the compensation payable to his/her employees. Such information should be conveyed to the employees periodically, for example setting out the information in employees’ monthly pay slips, so as to enhance communication between the management and staff on leave arrangements.
Comments
Post a Comment