Lajom, Esperanza Cruz And Others v Cathay Pacific Airways Ltd

CourtHigh Court (Hong Kong)
Judgment Date04 March 2005
Judgement NumberHCA6733/1999
Subject MatterCivil Action
HCA006733/1999 LAJOM, ESPERANZA CRUZ AND OTHERS v. CATHAY PACIFIC AIRWAYS LTD

HCA 6733/1999

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO. 6733 OF 1999

____________

BETWEEN

  LAJOM, ESPERANZA CRUZ, suing on behalf
of herself and those cabin crew employed
by the Defendant under the Conditions
of Service Cabin Crew (Revised 1.1.86)
1st Plaintiff
CALLEJA, MARIA VICTORIA SANTOS, suing on
behalf of herself and those cabin crew
employed by the Defendant under the
Conditions of Service for Cabin Attendants
joining on or after 1st July 1993
2nd Plaintiff
BIASPAL, SUSHIL DEV, suing on behalf of
himself and those cabin crew employed by
the Defendant under the Conditions of
Service 1995 for Cabin Attendants joining on
or after 1st July 1995
3rd Plaintiff
and
CATHAY PACIFIC AIRWAYS LIMITED Defendant

____________

AND

HCA 3377/2003

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO. 3377 OF 2003

____________

BETWEEN

  LAJOM, ESPERANZA CRUZ, suing on behalf
of herself and those cabin crew employed
by the Defendant under the Conditions
of Service Cabin Crew (Revised 1.1.86)
1st Plaintiff
CALLEJA, MARIA VICTORIA SANTOS, suing on
behalf of herself and those cabin crew
employed by the Defendant under the
Conditions of Service for Cabin Attendants
joining on or after 1st July 1993
2nd Plaintiff
BIASPAL, SUSHIL DEV, suing on behalf of
himself and those cabin crew employed by
the Defendant under the Conditions of
Service 1995 for Cabin Attendants joining on
or after 1st July 1995
3rd Plaintiff
and
CATHAY PACIFIC AIRWAYS LIMITED Defendant

(Consolidated pursuant to the Order of the Honourable Mr Justice Tang dated 6th April 2004)

____________

Before: Hon Reyes J in Court

Dates of Hearing: 22, 23 and 28 February 2005

Date of Judgment: 4 March 2005

_______________

J U D G M E N T

_______________

I. Introduction

1. Cathay employed the plaintiffs as flight attendants on 18 September 1989, 14 December 1993 and 6 February 1996 respectively.

2. The plaintiffs say that they are automatically entitled to an annual pay increment until they reach the ceiling grade of a salary scale attached to their employment contracts. The plaintiffs also say that Cathay may not unilaterally reduce the amount payable on any grade of an agreed salary scale. The plaintiffs complain that, as a result of Cathay so reducing the salary payable for a given grade, flight attendants have received less than they ought to have been paid upon moving up an applicable salary scale.

3. Cathay denies that the plaintiffs are entitled to an automatic increment. Cathay also asserts a contractual right unilaterally to vary any agreed salary scale, so long as the change does not result in a flight attendant receiving less pay than he received immediately prior to the change.

4. The main question before the Court is who is right. More particularly, the issues are as follows:-

(1) Whether the plaintiffs' contracts of employment expressly or impliedly provide as the plaintiffs contend.
(2) If not, whether Cathay is estopped from denying that the contracts provide as the plaintiffs contend.
(3) To what extent (if at all) were the plaintiffs entitled to bring these proceedings as representative actions.

5. In setting out the background to this litigation below, I do not confine myself to matters which specifically relate to the plaintiffs' contracts. I also refer to periodic year-end negotiations and collective agreements between Cathay and the Flight Attendants Union (FAU) over salary benefits.

6. This is because the plaintiffs have all been, and (except for Ms. Calleja who no longer works for Cathay) continue to be, members of the FAU. The plaintiffs contend that their rights as employees and Cathay's obligations as employer should be understood against the backdrop of FAU’s negotiations. Indeed, the plaintiffs go further. They claim that statements made by Cathay in the course of periodic negotiations and collective agreements with the FAU are to be regarded as representations to flight attendants generally, whether or not members of the FAU.

II. Background

7. The earliest Conditions of Service (COS) produced at trial were those which came into effect on 1 July 1966.

8. Clause 3 of these 1966 Conditions (COS 1966) stated as follows:-

"BASIC PAY. An all-in monthly salary will be paid as follows:-
Hostesses Pursers
HK$ HK$
Probation 625 625
Balance of
1st Year 800 800
2nd Year 835 840
3rd Year 870 880
4th Year 905 920
5th Year 940 960
6th Year 975 1,010
7th Year 1,010 1,060
8th Year 1,045 1,110
9th Year 1,080 1,160
10th Year 1,115 1,210"

9. COS 1966 cl.4 further stated:-

"ANNUAL INCREMENTS. Increase of salary may be granted after each year of service up to a maximum of HK$1,150.00 per month to Flight Hostesses and HK$1,1210.00 per month to Flight Pursers for satisfactory service at the discretion of the Management.

10. Between 1966 and 1986, the amount payable in respect of each year of the basic salary scale and the allowances or additional salary payable to senior flight attendants were revised upwards annually, usually following discussion with the FAU, in line with increases in the cost of living.

11. Further, on 1 January of each year, flight attendants automatically advanced one grade up the currently applicable salary scale. Where a flight attendant or senior flight attendant had reached the final grade in his scale, he would remain at that level. His basic salary would then only increase by the percentage rise in cost of living attributable to his grade in the salary scale.

12. In general, year-end negotiations between Cathay and the FAU typically focused on the total percentage (inclusive of increase in cost of living and increment from advancing one year up the salary scale) by which flight attendants' pay should rise on average in the coming year.

13. At some point between 1966 and 1986, the reference in the basic salary scale to "Year" was altered to "Grade" and the number of grades grew from 10 to 18. Over the same period, the basic salary ladder evolved from a single into a double scale: one for cabin attendants running from a starting grade and then grades 1 to 18, and another for flight pursers (a higher rank than cabin attendant) running from grades 2 to 18.

14. On 1 January 1986 new Conditions of Service (COS 1986) came into effect.

15. COS 1986 cl.3 provided:-

"Salary and Allowances (Effective 1st January 1986)
(A) Salary Scales
Cabin Attendant Flight Purser
Starting HK$4,477 HK$ --
Grade 1 5,020 --
2 5,239 5,883
3 5,461 6,132
4 5,693 6,393
5 5,936 6,665
6 6,188 6,948
7 6,420 7,209
8 6,661 7,479
9 6,910 7,760
10 7,169 8,051
11 7,437 8,353
12 7,716 8,666
13 7,967 8,948
14 8,226 9,239
15 8,493 9,539
16 8,769 9,849
17 9,054 10,170
18 9,348 10,500
(B) Title Allowances
Per month Per month
Flight Purser HK$675.00 HK$750.00*
Senior Purser 1,350.00 1,500.00*
Chief Purser
(L1011) 2,700.00 3,000.00*
Chief Purser
(B747) 3,600.00 4,000.00*
*To be effective 1st July 1986
(C) Appointment Allowances
....
(D) Starting Salary
Starting Salary will be payable to cabin crew who join the Company between 1st January and 30th June in any calendar year, and will continue to be paid after completion of probation until the end of that calendar year. They will receive the Grade 1 salary with effect from 1st January of the following calendar year. Cabin crew who join between 1st July and 31st December will receive the Grade 1 salary after completion of probationary period."

16. COS 1986 cl.4 stated:-

"Annual Salary Increases

Salary Scales, Titles Allowances and Appointment Allowances will be reviewed annually and will normally take effect from the first day of each calendar year at the Company's discretion."

17. Reference was made at trial to provisions for maternity leave in various COS as an aid to construing Cathay's obligations. COS 1986 cl.24(D)(i) on the "Continuation of Benefits" stipulated that "seniority will continue to accrue during approved maternity leave".

18. In December 1986 Cathay and the FAU agreed that from 1 January 1987 the salary scale headings in COS 1986 would be amended from "Grade" back to "Year". There were to be other changes. "Cabin Attendant" would become "Flight Attendant", "Flight Purser" become "Senior Flight Attendant". Further, "Title Allowances" would henceforth be called "Rank Allowances". But parties stressed that neither anticipated any consequential effect from the revisions.

19. In December 1987 Cathay and the FAU agreed that from 1 April 1988 there would be a "Year 19" added to the Senior Flight Attendant salary scale.

20. In December 1987 Cathay also acknowledged the FAU's role in the...

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