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2022 MarsdenLR 317
COURT OF APPEAL PUTRAJAYA
AMINAH AHMAD – Appellant
Versus
THE GOVERNMENT OF MALAYSIA & ANOR – Respondent
[Civil Appeal No: W-01(A)-77-02-2020]
Amendments to pension adjustment statutes contravening constitutional pension rights were ruled null and void due to creating less favourable conditions for retirees.
Headnote:(A) Federal Constitution – Article 147 – Pensions Adjustment Act 1980 – Amendments under the Pensions Adjustment (Amendment) Act 2013 – The amendments contravened Article 147 by providing less favourable conditions for retirees compared to previous law – The impugned amendments were declared null and void. (Paras 41-44)
Facts of the case: The appellant, on behalf of herself and fifty-six retirees, challenged the validity of amendments under the 2013 Amendment Act, asserting they created a less favourable pension adjustment system compared to prior provisions of the PAA 1980. (Paras 2-21)
Findings of Court: The amendments to the PAA 1980 contravened Article 147, which protects pension rights, since they diminished the conditions under which pensions were calculated. (Paras 41-44)
Issues: The appeal addressed whether the amendments contravened Article 147 of the Federal Constitution by creating a less favourable situational for pensioners. (Paras 27-39)
Ratio Decidendi: The court found that the less favourable situation posed by the amendments goes against the constitutional protection afforded to pensioners; Senate discretion invoked by 'may' not imposing a mandate for action was key in the judgment. (Paras 31-34)
Result: The appeal is allowed; the amendments are rendered null and void with prospective effect from the date of judgment. (Paras 63-64)
[1] This appeal concerns the validity of certain amendments made to the Pensions Adjustment Act 1980 (" PAA 1980").
[2] The challenge to the validity of the amendments in question was premised squarely upon art 147 of the Federal Constitution . This was a challenge brought by the appellant on her own behalf and on behalf of fifty-six retirees from the public services.
[3] In essence, it was the appellant's contention that the amendments to ss 3 and 6 of the PAA 1980, brought about by ss 3 and 7 of the Pensions Adjustment (Amendment) Act 2013 ("2013 Amendment Act"), contravenes art 147 of the Federal Constitution .
[4] This is the judgment of the Court.
[5]Article 147 of the Federal Constitution states as follows:
"Protection of pension rights
147. (1) The law applicable to any pension gratuity or other like allowance (in this Article referred to as an "award") granted to a member of any of the public services, or to his widow, children, dependant or personal representatives, shall be that in force on the relevant day or any later law not less favourable to the person to whom the award is made.
(2) For the purposes of this Article the relevant day is-
(a) in relation to an award made before Merdeka Day, the date on which the award was made;
(b) in relation to an award made after Merdeka Day to or in respect of any person who was a member of any of the public services before Merdeka Day, the thirtieth day of August, nineteen hundred and fifty-seven;
(c) in relation to an award made to or in respect of any person who first became a member of any of the public services on or after Merdeka Day, the date on which he first became such a member.
(3) For the purposes of this Article, where the law applicable to an award depends on the option of the person to whom it is made, the law for which he opts shall be taken to be more favourable to him than any other law for which he might have opted."
[Emphasis Added]
[6] The appellant's contention was that the amendments brought about by the 2013 Amendment Act resulted in a situation "less favourable" to the appellant when compared with the preceding retirement adjustment scheme under the PAA 1980, prior to the amendments. This, it was contended, contravened art 147(1) of the Federal Constitution .
PAA 1980 Prior To The 2013 Amendment Act
[7] Prior to the 2013 Amendment Act, s 3 of the PAA 1980 provided as follows:
"Adjustment of pensions and other benefits of officers and dependants
3.(1) Pensions and other benefits granted to officers and their dependants under any written law before or on the implementation of any current salary scale shall be adjusted in accordance with the provisions of this Act and shall be paid or be payable with effect from the date of implementation of the current salary scale.
(2) The pension or retiring allowance of an officer shall be adjusted as provided in the First Schedule."
[Emphasis Added]
[8]Section 2 of the PAA 1980, provided that:
"'current salary scale' means the latest scale which is, on or after the coming into force of this Act, applicable to officers of the public service and employees of statutory and local authorities to whom the revision of salaries made by the Federal Government with effect from 1 January 1976, or any other subsequent revision thereof made by the Federal Government from time to time, is applicable;"
[9] The relevant portion of the First Schedule referred to in s 3(2) provided as follows:
[10]Section 2 of the PAA 1980, provided that:
"'Corresponding last drawn salary' means the corresponding last drawn salary as defined under subsection 6(2)."
[11] Prior to the 2013 Amendment Act, ss 6 of the PAA 1980 provided as follows:
"Determination of corresponding last drawn salary
6. (1) The Director General shall determine the corresponding last drawn salary of an officer.
(2) For the purposes of this Act, "corresponding last drawn salary" means, in the case of an officer to whom the current salary scale does not ap
