Case No.:

(AC-Revision-394-1960)

Court:

Court of Appeal

Issue No.:

1960

Principles

·  Labour—Gratuity on termination of service—Employers and LmploycJ Person. Ordinance, ss. 2, 24—Gratuity included under “wages.” so governed hv Prescription and Limitation Ordinance, Sched. Part I

A claim for a gratuity under section 24 of the Employers and Employed Persons Ordinance is not a claim for damages for breach ol a legal obligation, but is a claim for “wages” within the meaning of the Ordinance. So where, ln action claiming a gratuity was brought one year and four months after the termination of the contract of service,
Held: that the right of action was statute-barred under the prescription and Limitation Ordinance, Sched.. Part 1.
Skailes v. Blue Anchor line, Ltd. [1911] 1 K.B.360 cited

Judgment

(COURT OF APPEAL)

YOUSIF ABDEL RAZIG v. HEIRS OF JOHN POTHITOS

(AC-Revision-394-1960)

Revision

Advocate: Yahia Beshir for appLcunt

December 27, 1960. M. A. Aba Rannt C.J.: —ihc plaintiff in this case was an employed person within the meaning of the Employers and Employed Persons Ordinance. He brought an action claiming  gratuity from his employers under section 24 of the Ordnance. A preliminary point of law was raised by the defendant that the right of action was barred under the First Part of the Schedule to t Prescription and Limitation Ordinance. It is admitted that  the action was brought one year and four months after the plaintiff’s co s was terminated by his employer (the defendant). The defendant contends that gratuities form part of the wages of labour while the plaintiff contends that gratuities are damages in respect of breach of a legal obligation, which comes under Part II of the Schedule.

The District Judge held that it was a legal obligation, but the Hon. the Judge of the High Court t on revison that the gratuity forms part of the contract of service cnH cuch it is included irr the definition of “wages” in the Interpretation Clause, section 2 of the Employers and Employed Persons Ordinance, and decided that the right of action is barred.

This application is made against the decision of the Hon. the Judge of the High Court, Pefor making a decision of the point at issue. I wish to say that an employer and an employed person when entering into a contract ought both of them to know whether it is a contract to which the responsibilities and privileges of the Ordinance attach. The employer needs to know it in order that he may provide against the liabilities, which the Ordinance imposes, and the employed person needs to know it in order that he may form a true conception of the return, which he will receive for his work.

The word “wages is defined in the Ordinance, s. 2, as to mean the aggregate of basic pay and all other forms of remuneration payable to an employed person by an employer; gratuity was not excluded from the definition of the word “wages.” In paragraph 226 of Volume 22, second edition of Halsbury’s Laws of, England, it was stated that the opportunity of earning a gratuity at the end of the period of service may be good as part of the consideration of the contract.

The contract of service provides for the payment of a weekly wage and it also provides for earning remuneration at the termination of his service if certain concjitions were fulfilled. In Skailes v. Blue Anchor Line, Ltd. [1911] 1K.B.360 it was held that “remuneration” under the Workmen’s Compensation Act, 1906. is synonymous with “earnings” as used in the Act. This leads me to think that as a gratuity is a remuneration to be earned at the end of a certain period, it is included in the definition of the word “wages” under the Employer and Employed Persons Ordinance, and consequently the right of action is barred.

                                                (Application summarily dismissed)

Court: M. A. Abu Rannat C.J.