PUTRAJAYA (Dec 16): The Federal Court on Friday (Dec 16) reserved judgment in the government's appeal against the Court of Appeal's landmark decision that the amendment to the Pensions Adjustment Act (PAA) in 2013 was unconstitutional as it was deemed less favourable than before for pensioners.
Chief Judge of Sabah and Sarawak Tan Sri Abang Iskandar Abang Hashim said the five-member bench needed more time to decide on the matter, after hearing submissions from senior federal counsels Shamsul Bolhassan and Liew Horng Bin, and senior lawyer Datuk Seri Gopal Sri Ram, who appeared for pensioner Aminah Ahmad and 56 others.
“The bench is not able to come up with a decision and we will defer in delivering it. Parties will be informed in due course when the court is ready to deliver it,” he said.
The others on the bench were Federal Court judges Datuk Abdul Rahman Sebli, Datuk Seri Hasnah Mohamed Hashim, Datuk Rhodzhariah Bujang and Datuk Mohd Zabidin Mohd Diah.
Last June, the apex court granted leave to the government and the director-general of the Public Services Department (PSD) for the merits of their appeal to be heard on three questions of law.
They are :
- whether Sections 3 and 6 of the Pensions Adjustment Act 1980 as amended by Sections 3 and 7 of the Pensions Adjustment (Amendment) Act 2013 contravene Article 147 of the Federal Constitution when a pensioner fails to prove that the adjusted pension received is actually less favourable when it is compared to the former law;
- whether Section 3 of the Pensions Adjustment Act 1980 as amended by Section 3 of the Pensions Adjustment (Amendment) 2013 which enables or empowers the Yang di-Pertuan Agong to prescribe an appropriate higher percentage of increment to an officer before the coming into effect of the amendment should a situation that is less favourable arise is in itself a contravention of Article 147 of the constitution;
- whether a court of law in granting a declaratory order is competent and has the necessary jurisdiction to substitute a government policy which is approved by Parliament by way of a statutory amendment when the policy is not even the subject matter of dispute by the parties in legal proceedings.
Article 147, which touches on protection of pension rights, stipulates that any award should not be less favourable than before.
In their submissions, Shamsul and Liew argued that the 2013 amendment was not a salary revision per se but a rationalization to the new scheme.
They used a chart to show that with the amendment, the pensioners — especially Aminah who retired in 2002, and those who retired before 2013 — are likely to receive more in pension compared to before the amendment was made.
They further submitted that the pension is merely an ‘ex-gratia payment’ at the discretion of the government, and the pension adjustment is only ‘additional benefit’ which is not protected under Article 125(7) of the Federal Constitution.
Hence, they contended that the amendment made and enforced in 2013 is constitutional.
Sri Ram disputes examples cited
Sri Ram meanwhile argued that the 2013 amendment violated Article 147 of the Federal Constitution.
He argued that the chart and calculation shown by the senior federal counsels were misleading as in his finding the amendment in 2013, giving a 2% increment in pension, was less favourable to those who retired before 2013 and only benefits those who retired after January 2013.
This, he added, goes against the spirit of the constitution.
He noted that the 2013 amendment stipulates that the Yang di Pertuan Agong may intervene if the pension rights are found to be unfavourable.
The word "may”, he added, is different from “shall” which imposes a mandatory requirement for the Agong to intervene.
Sri Ram said the 2013 amendment showed that the discretion for pension is now in the hands of the executive, and that the courts have the power to intervene if the situation is found to be less favourable than before.
In February, a three-member bench of the Court of Appeal allowed the appeal by Aminah, a former Wisma Putra officer who also represented 56 other civil servants, to quash the 2013 amendment.
Datuk Daryl Goon, as he then was, wrote the unanimous decision in allowing the appeal. The bench was led by Datuk Vazeer Alam Mydin Meera, with Datuk Abu Bakar Jais as the third judge.
Under the previous scheme, the pension of retirees was revised based on the prevailing salary of incumbent civil servants of that grade.
However, the 2013 amendment introduced and applied a flat rate of 2% annual increment for pensioners which Aminah argued was less favourable to them.