Variable pay earners hold the same legal protections as salaried staff
Withholding commission payments cost a Hong Kong company its entire case and handed its two employees the means to end their employment on their own terms.
In a judgment dated 6 March 2026, the Hong Kong Court of First Instance dismissed all claims brought by Caidao Capital Limited against two former investment managers, with direct implications for employers using variable pay structures.
The case centred on Mr Harmen Overdijk and Mr Lodewijk Lamaison Van Den Berg, who joined CCL in September 2014 to build a wealth management division called Caidao Wealth. Their contracts described their salary as "solely commission based and not fixed," with pay tied to revenue from clients they introduced. From April 2015, CCL paid each of them HK$100,000 per month as an advance against those earnings.
Relations deteriorated from early 2016. CCL's chief executive, Ms Ming Lee, raised compliance concerns during a Securities and Futures Commission audit and pushed to cut the revenue share from 90 to 80 per cent. Minutes of a management meeting on 21 April 2016 recorded the change as agreed, effective from 1 January 2016. Payments continued until December 2016 for Mr Overdijk and November 2016 for Mr Lamaison, then stopped altogether.
Mr Overdijk received nothing for January 2017 and claimed constructive dismissal on 2 February 2017. Mr Lamaison had already ended his employment in December 2016 by offering wages in lieu of notice.
CCL argued neither man had earned wages, accepting the monthly payments were advances against commission but arguing the men had no entitlement to that commission at all, and that any outstanding amount was in any event conditional on passing an internal audit. CCL also sought to recover the HK$2.1 million and HK$2 million in advances paid respectively. It simultaneously claimed wages in lieu of notice from both men, seeking HK$292,337.65 from Mr Overdijk and HK$760,175.68 from Mr Lamaison, a position the court found self-evidently inconsistent with its own argument that neither had earned wages.
Recorder Jin Pao SC rejected each argument. The Employment Ordinance defines wages broadly to include commission, and the employees had generated revenue for CCL throughout their employment through clients they introduced. CCL's demand to recover the advances was dismissed.
On the audit condition, the court found no clear agreement that a failed audit would forfeit accumulated entitlements, and that unequivocal language would have been required for that outcome. The court also found the audit lacked independence. Evidence showed Ms Lee had actively suggested deficiencies for inclusion in the report, provided nine points of written feedback on the draft including a direction to add the word "independent" to the report's own description of the audit, and shaped the review toward documents likely to produce negative findings while omitting others expected in a balanced audit. The court found her reliance on the email exchange to be "opportunistic" and concluded she was "trying to take advantage of the response by Mr Lamaison in order to unjustifiably avoid making TFRS payments to the Defendants."
All of CCL's claims were dismissed. Judgment was entered for HK$316,000 in favour of the defendants' corporate vehicle, Asia Independent Capital Limited, with a provisional interest order at 1% above HSBC's best lending rate from 1 April 2017 until the date of judgment. The court made a provisional order that CCL pay the defendants' costs. The individual defendants' counterclaims covering outstanding commission and, in Mr Overdijk's case, constructive dismissal damages, proceed to a further hearing where no new evidence will be admitted and no unpleaded arguments permitted.
The case signals that commission-based pay attracts full wage law protection regardless of contractual labelling, and suspending agreed compensation without clear contractual authority invites constructive dismissal claims. Using a compliance audit to deny accrued entitlements will face close judicial scrutiny, particularly where the employer has materially shaped the process, its scope, and even its language.
