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Retrenchment 44 – The Meaning of “a day’s Wages”

Updated: Dec 18, 2022

Employees covered by the Employment Act 1955 or the Sabah or Sarawak Labour Ordinance are entitled to Retrenchment benefits upon retrenchment if they have completed one year of service with the employer.

The amount of the benefit depends upon their length of service as well as the wages they earned.

“Wages” shall have the same meaning under S2 (1) of the EA 1955

“A day’s wages” are computed so as to give the employee his average true day’s wages, calculated over the period of 12 completed months’ service immediately preceding the date with effect from which the contract is terminated.

“A day’s wages” is taken from the last 12 months' wages and divided by 365 or 366 days (*), i.e.: Annual Wages before termination of employment contract ÷ 365/366

* Should be divided by 365/366 days [Lee Fatt Seng v. Harper Gilfillan (1980)]

在1955年劳工法令 [或沙巴、砂拉越劳工法] 范围内的员工,如果连续在同一家公司服务最少12个月,将享有裁员福利。


“工资” 是按照1955年劳工法令 [或沙巴、砂拉越劳工法] 第2条文所诠释。