Our Recent Success in a Landmark Employment Dispute Case

Fairbairn Catley Low & Kong’s (“FCLK”) litigation team recently represented the Plaintiffs who secured a victory in a high profile employment dispute case - Lajom & Others v Cathay Pacific Airways Ltd, HCA 6733/1999 and 3377/2003. The case has attracted very wide media coverage in Hong Kong.

As a result of the judgment, it is estimated that Cathay Pacific Airways Limited needs to pay out over HK$200million to more than 3,400 monthly paid flight attendants. On average, each flight attendant would get about HK$80,000 to compensate for salary losses over the past seven years.

The action was held by the Court to be properly commenced as a representative action in relation to the construction of the employment contract though as to the question of breach by the Defendant in relation to other flight attendants, it had to be evaluated on a case by case basis.  The Court also held that estoppel by convention had been established for the Plaintiffs.

The court reiterated the law that, unless there were clear words to the effect of such a unilateral right, the court would not read a contract as granting the right to reduce pay at the employer’s discretion.

This ruling has very significant implications for those employees who, even without a pay rise, enjoy annual increments of salary by reference to a basic salary scale.

For further information, please contact Ray Poon: rpoon@fclklaw.com.hk

Prepared by Ray Poon in July 2005.