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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。


平均一天的工资是拿过去12个月的薪水除以365或366天 [*],即: 雇佣合约终止前年薪 ÷ 365/366

* [Lee Fatt Seng 诉 Harper Gilfillan(1980)]


Ali was retrenched by the company.

He worked there for 8 years and his earnings over a period of twelve months immediately preceding the relevant date are as follows:




How much should his Retrenchment Benefits be?

Since Ali served the Company for more than 5 years, his entitlement as per Regulation 6 of the Employment (Termination & Lay Off Benefits) Regulations 1980 [or the Labour (Termination and Lay-off Benefits) (Sabah) Rules 2008 or Labour (Termination and Lay-Off Benefits) (Sarawak) Rules 2008] = 20 days for every year of service.

Let's now calculate just how much redundancy benefits Ali could receive.

1) First, calculate Ali's a day's wages

  • Ali's a day's wages = RM 17,800 ÷ 366 = RM 48.63 (per day)

2) Then calculate the total number of days he is entitled to redundancy benefits

  • Length of service = 8 years

  • Total number of days of redundancy benefits = 8 x 20 = 160 days

3) Redundancy benefits = 48.63 * 160 = RM 7,780.80

This redundancy benefit must be paid on or before Ali's last day of service.

他可以享有的裁员福利 [赔偿] 是多少呢?

由于阿里在公司任职超过5年,1980年就业 [终止和解雇福利] 条例 [或2008年沙巴劳工 [终止和解雇福利] 条规 或 2008年砂拉越劳工 [终止和解雇] 条规福利]规定,每服务满1年他将享有20天的裁员福利。



  • 阿里平均一天的工资 = RM 17,800 ÷ 366 = RM 48.63(每一天)


  • 服务年限 = 8年

  • 裁员福利的总天数 = 8 x 20 = 160 天

3)裁员福利 = 48.63 * 160 = RM 7,780.80


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