Wong Leung Bong v. Gammon (Hongkong) Ltd

IN THE DISTRICT COURT OF HONG KONG

HOLDEN AT VICTORIA

CIVIL JURISDICTION

ACTION NO. 2713 OF 1972

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Between

Coram: D. Cons, D.J.

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JUDGMENT

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1. On 1st September, 1970 the plaintiff commenced to work for the defendant company as an Accounts Clerk at a salary of $550 per month, sometime later increased to $730. The terms of' the contract of employment were contained chiefly in written documents comprising letters of offer and acceptance to which were attached a list of standard conditions of service. In addition it is conceded that at the personal interview which the plaintiff had with the defendant's secretary the plaintiff was told that a bonus was usually payable but that the actual amount depended upon the profits of the company. The secretary tells me that it was his usual custom on these occasions to add that it was entirely up to the defendant company to decide with regard to an individual and that it was a discretion and not an entitlement. However I am not prepared to accept that he did so on this particular occasion. Furthermore it would appear that individual consideration was not given by the company but rather that a general bonus was paid in direct proportion to salary. There is thus imported into the contract of service a further term the proper construction of which is to my mind that the plaintiff was entitled to a bonus for any particular year in which the defendant company should declare a bonus for its staff. It was not an absolute right, for the fact and the amount of the bonus would depend upon the discretion of the board of directors. I cannot accept the suggestion that this is a term too vague to be enforceable. I appreciate that it left something that had to be decided afresh each year of the service, but that something could easily be ascertained in its proper course and did not depend upon further agreement between the parties: see May & Butcher v. The King 1934 2 K.B. 17 at p.21:

2. The practice of the defendant company is to declare bonuses with regard to particular calendar years and to pay them partly just before the following Chinese New Year with the balance at the end of May. The bonus for 1971, like that of 1970, was equivalent to 2 months’ salary. It was paid to all staff who had completed the year 1971 with the company and were employed at the time of payment. In accordance with the usual practice of the company it was not paid to those staff who had ceased employment in the interim. This included the plaintiff, who had resigned from the company with effect from the end of 1971. There was in fact one exception to the practice this year but I do not think this makes any difference. The question which therefor arises is whether the defendant company was correct in withholding the plaintiff’s bonus or in other words did he acquire his right to the bonus on the 31st of December 1971 or only when the directors took their decision sometime after he had left the company. After some hesitation I have come to the conclusion that the former is the proper answer. It is clear from the letters accompanying the bonuses, particularly that of 1971, that the bonus is in reward for the effort of the staff during the calendar year completed. The plaintiff could make no further contribution to that year once the 31st of December had passed whether he remained in the company’s employment or not. It therefore seems to me that his right to a share of any bonus which might later be declared derived from that date although it was a right which would not invest him with any practical benefit unless and until the directors made some decision.

3. I should add that the plaintiff referred me to a particular textbook entitled "Legal Aspects or Industry and Commerce by one Frank”. I have been unable to obtain a copy of this work from any library which. is open to my use but so far as I can remember the passage cited was to the effect that payment of a bonus might in certain circumstances be implied from the customary conduct of the employer. That may be so. But if applied to the present circumstances it would have produced a decision adverse to the plaintiff. The conduct of the defendant company could only be taken to imply payment of bonus in favour of those who continued service until the time of its actual payment out. My decision in this action rests upon the fact that the bonus was not implied but was express, although unwritten, term of the contract.

4. For these reasons judgment is entered for the plaintiff in a sum of $1,460.00 and endorsed costs.