In light of the CFA decision of Lisbeth Enterprises Limited v Mandy Luk (as reported in the November issue of this Update), the Government is now proposing certain amendments to the Employment Ordinance to ensure that monthly calculated commissions are taken into consideration for the purposes of statutory benefits.

The proposed amendments are introduced by the Government in its Employment (Amendment) Bill 2006, gazetted on 8 December 2006. The amendments, introduced into the Legislative Council on 20 December 2006, seek to change the method of calculating the following payments under the Employment Ordinance:- 

  • payment in lieu of notice
  • damages for wrongful termination of contract
  • end of year payment
  • payment for maternity leave
  • sickness allowance
  • holiday pay
  • annual leave pay 

In brief, the amendments provide for a “rolling twelve month average” (meaning the daily or monthly average of the wages earned by the employee over the preceding 12 months period) method for the purpose of calculating the above entitlements.