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2025 MarsdenLR 132
HIGH COURT MALAYA KUALA LUMPUR
AMINAH AHMAD – Appellant
Versus
KERAJAAN MALAYSIA & ANOR – Respondent
[Judicial Review No: WA-25-15-01/2024]
Amendments to pension laws that result in less favorable terms for pensioners are unconstitutional; pension adjustments must revert to the original formula post-amendment.
Headnote:(A) Pension Adjustment Act 1980 - Sections 3 and 6 - Pensions Adjustment (Amendment) Act 2013 - Sections 3 and 7 - Federal Constitution - Article 147 - Judicial review application for mandamus to adjust pension entitlements according to pre-amendment formula due to amendments resulting in less favorable terms for pensioners - Court found that sections 3 and 7 of the 2013 Amendment Act are null and void as they contravene Article 147, leading to granting of the applicant's entitlement to pension as per original provisions and compelling government to make adjustments. (Paras 6, 8, 10, 17, 56)
(B) Issues of law examined included the validity of amendments and whether pension adjustments were legally required following the findings of the Federal Court - Court ruled that adjustment not made was unlawful and did not amount to res judicata from previous claims. (Paras 24, 30, 56)
Facts of the case:
Applicant, a retiree along with others, sought adjustment of pensions under the formula from PAA 1980 invalidated by subsequent amendments, claiming these changes left them in a less favorable position.
Findings of Court:
The Court found the impugned provisions did not hold, reaffirming the need for pension adjustments based on the original PAA 1980 following the Federal Court's earlier ruling. (Paras 9, 56)
Issues: The core issues revolved around the constitutionality of the amendments and whether retroactive application of pension adjustments could be mandated.
Ratio Decidendi: The Court determined that the amendments created a situation less favorable than previously allowed under PAA 1980, and the non-adjustment constituted a legal duty breach. The applicant was entitled to seek rectification through mandamus. (Paras 25, 56)
Result: Judicial review application granted with orders for pension adjustments to be made. (Paras 56)
| Table of Content |
|---|
| 1. pension adjustment based on paa 1980 (Para 2 , 3 , 4 , 5) |
| 2. demand for pension adjustment post-federal court ruling (Para 11 , 12 , 13) |
| 3. criteria for issuing a mandamus order (Para 24 , 25 , 26) |
| 4. determining salary revision through service circulars (Para 34 , 36 , 37 , 39) |
| 5. court's orders regarding pension adjustments (Para 55 , 56) |
The Application
[1] On 29 February 2024, I had granted the applicant leave to commence judicial review proceedings against the Government of Malaysia ("the Government") and the Director General of Public Services ("the Director General") for orders of mandamus which read as follows:
(a) to adjust the pension entitlement amounts in accordance with the formula contained in ss 3 and 6 of the Pension Adjustment Act 1980 ("PAA 1980") prior to its amendment under ss 3 and 7 of the Pensions Adjustment (Amendment) Act 2013 ("the 2013 Amendment Act"); and
(b) within 14 days or such time as this Honourable Court may determine, execute the payment of pension arrears ("the pension arrears") in favour of the applicant in accordance with the formula contained in ss 3 and 6 of the PAA 1980 prior to its amendment under ss 3 and 7 of the 2013 Amendment Act.
The Background
[2] Aminah binti Ahmad is a pensioner. She retired from public service in 2002. In the instant judicial review proceeding, she is suing the Government and the Director General for the abovementioned reliefs in her personal capacity and on behalf of 58 retired members of the public service ("the applicant"). The Director General is the authority empowered under the PAA 1980 to determine the calculation of pension on behalf of the Government.
[3] The pension received by Government employees who had retired from public service is regulated by the Pensions Act 1951 and the PAA 1980. In 2013, the PAA 1980 was amended by ss 3 and 7 of the 2013 Amendment Act. The amendment deleted ss 3 and 6 and the definition of "corresponding last drawn salary" in s 2 of the PAA 1980. Two new sections were introduced, namely, ss 3A and 3B of the PAA 1980 respectively. The above amendments came into effect on 1 January 2013. The direct effect of the amendment resulted in the change in the formula in adjusting the pension of Government employees who had retired prior to 1 January 2013.
[4] Some four years later, on 28 April 2017, the applicant filed an originating summons ("the 2017 Originating Summons") praying in the main for the following declaratory orders:
(i) that ss 3 and 7 of the 2013 Amendment Act are ultra vires art 147 of the Federal Constitution ;
(ii) that the deleted ss 3 and 6 of the PAA 1980 be restored accordingly; and a consequential order that adjustments be made retrospectively to the pensions received by the recipients whose pensions had been calculated based on the post 1 January 2013 formula and any shortfall resulting therefrom be paid to the respective recipients accordingly.
[5] The applicant's case, in a nutshell, was that the amendments made by the 2013 Amendment Act were less favourable than the position prior to the amendments made to the PAA 1980. On the restoration of the deleted ss 3 and 6 the applicant sought adjustments of the pension under the pre-2013 formula and be paid to her.
[6] On 9 January 2020, the High Court dismissed the declarations sought by the applicant. In deciding so, the High Court made, inter alia, the following observations and findings:
(a) Section 3 (1) as amended by the 2013 Amendment Act changed the criteria by which pension is adjusted under the PAA 1980. It changed the statutory mechanism for the adjustment of pension from one that is based on the latest revision of an applicable salary scale to an adjustment mechanism that is based on a fixed rate of increment of 2% per annum.
(b) Parliament was aware that the amendments made would change the variable rate of pension adjustment pegged to the latest revision of the applicable salary scale to a fixed rate adjustment of 2%
