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ARTICLE · 07 JULY 2023

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When Is A Discretionary Bonus Not Discretionary?

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Hong Kong's District Court upheld an employee's claim for unpaid bonus and refund of wrongful deductions in Kan Kin Tong v. Man Leong Fire Services Ltd [2023] HKDC 513.

Hong KongEmployment and HR
Hong Tran
Hong Tran
Duncan Abate
Duncan Abate
Jennifer C. W. Tam
Jennifer C. W. Tam
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Hong Kong's District Court upheld an employee's claim for unpaid bonus and refund of wrongful deductions in Kan Kin Tong v. Man Leong Fire Services Ltd [2023] HKDC 513.

The Court held that the unpaid bonus, which the defendant employer claimed was discretionary, was contractual in nature and formed part of the plaintiff's remuneration or wages under the employment contract.

Facts

The plaintiff was employed by the defendant as engineer responsible for managing fire services installation projects. He was entitled to a basic monthly salary plus a percentage of the defendant's net profit.

His basic monthly salary only increased slightly from HK$10,000 in 2006 to HK$15,000 at the time of termination in 2017. But the percentage of net profit he was entitled to gradually increased from the initial 20% to 45-50% from 2016. The percentage he was entitled to would increase with the amount of net profit.

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