1. On 7 October 2011, Fu Ming Transport Co Ltd (“Fu Ming”) went into voluntary liquidation and dismissed its employees (including the Applicant) with immediate effect. The Applicant was owed severance payment and applied to the Respondent for an ex gratia payment in relation to this item under the Protection of Wages on Insolvency Ordinance, Cap 380 (“the PWIO”). The Respondent was of the view that no ex gratia payment was payable in relation to severance payment and his decision was upheld by the Board. The Court of First Instance dismissed the Applicant’s application for judicial review to challenge the Board’s decision. The Applicant’s appeal to the Court of Appeal was dismissed. The Applicant appealed to the Court of Final Appeal. 2. The question before the Court was one of statutory interpretation. Severance payments are calculated under s.31G of the Employment Ordinance, Cap 57 (“the EO”). After calculation under s.31G, in order to arrive at the net or actual severance payment due to an employee for the purposes of the EO, deductions are then made (by reason of s.31I of the EO) if an employee has benefits from, for example, an occupational retirement scheme or a mandatory provident scheme (“s.31I benefits”). Ex gratia payments are made under the PWIO to employees (like the Applicant) where an employer (like Fu Ming) fails to make severance payments by reason of insolvency. Financial limits are set out in s.16(2)(f)(i) of the PWIO on the amount of ex gratia payments payable on account of severance payment. These limits are calculable by applying the formula set out in s.16(2)(f)(i) to the amount of severance payment to which an applicant is entitled (the formula is $50,000 plus 50% of the excess beyond that amount). The question in the present appeal was how to calculate (for the purposes of applying the said formula) the appropriate amount of severance payment to which an applicant was entitled in order to arrive at the amount of ex gratia payment (if any) that can be made under the PWIO. The specific question was how and at what stage to take account of the s.31I benefits. 3. The Court of Appeal held that the formula in s.16(2)(f)(i) was first to be applied to the amount of severance payment calculated under s.31G of the EO to arrive at a sum, from which would then be deducted the s.31I benefits in order to arrive at the appropriate ex gratia payment (if any). This resulted in the Applicant getting no ex gratia payment in the present case. The Court of Appeal therefore applied the same approach in calculating ex gratia payments under the PWIO as was the approach under the EO. It held that the statutory intention of the PWIO was similarly to treat all employees the same irrespective of whether such employees had s.31I benefits. 4. The Court of Final Appeal held that this was a wrong approach as matter of statutory construction. Nothing in the wording of the PWIO permitted this approach and the words of this Ordinance did not permit the statutory intention held by the Court of Appeal. Instead, the amount of severance payment to which an applicant was entitled for the purposes of s.16(2)(f)(i) was the actual net amount of severance due and therefore any s.31I benefits had first to be taken into account in arriving at this net sum. Only then was the statutory formula applied to this net sum to arrive at the ex gratia payment on account of severance payment. 5. Accordingly, the Court unanimously allowed the appeal and quashed the decision of the Board.