(1) For the purposes of this Part and Part IX-

(a) "ordinary rate of pay" means wages as defined in section 2, whether calculated by the month, the week, the day, the hour, or by piece rate, or otherwise, which an employee is entitled to receive under the terms of his contract of service for the normal hours of work for one day, but does not include any payment made under an approved incentive payment scheme or any payment for work done on a rest day or on any gazetted public holiday granted by the employer under the contract of service or any day substituted for the gazetted public holiday; and

(b) "hourly rate of pay" means the ordinary rate of pay divided by the normal hours of work.

(1A) Where an employee is employed on a monthly rate of pay, the ordinary rate of pay shall be calculated according to the following formula:


(1B) Where an employee is employed on a weekly rate of pay, the ordinary rate of pay shall be calculated according to the following formula:


(1C) Where an employee is employed on a daily or an hourly rate of pay or on piece rates, the ordinary rate of pay shall be calculated by dividing the total wages earned by the employee during the preceding wage period (excluding any payment made under an approved incentive payment scheme or for work done on any rest day, any gazetted public holiday granted by the employer under the contract of service or any day substituted for the gazetted public holiday) by the actual number of days the employee had worked during that wage period (excluding any rest day, any gazetted public holiday or any paid holiday substituted for the gazetted public holiday).

(1D) For the purposes of payment of sick leave under section 60F, the calculation of the ordinary rate of pay of an employee employed on a daily or an hourly rate of pay or on piece rates under subsection (1C) shall take account only of the basic pay the employee receives or the rate per piece he is paid for work done in a day under the contract of service.

(2) An employer may adopt any method or formula other than the method or formula in subsection (1A), (1B) or (1C) for calculating the ordinary rate of pay of an employee; but the adoption of any other method or formula shall not result in a rate which is less than any of the rates provided in the subsections.

(3) For the purpose of this section, the Director General may, on application made to him in writing by an employer, approve in writing any incentive payment scheme as an approved incentive payment scheme.