In upholding the Court of Appeal decision, Chief Judge of Malaya Datuk Mohamad Zabidin Mohd Diah said the appellate court was right in restoring the status quo of preserving the original Sections 3 and 6 prior to the 2013 amendment.
PUTRAJAYA (June 27): A five-member Federal Court bench on Tuesday (June 27) decided that the amendment to Sections 3 and 7 of the Pensions Adjustment (Amendment) 2013 Act (PAA), which allows a 2% increment annually, is less favourable to pensioners, and thus declared it null and void.
The court held that the provisions contravene Article 147 of the Federal Constitution, which deals with the protection of pension rights.
In upholding the Court of Appeal decision, Chief Judge of Malaya Datuk Mohamad Zabidin Mohd Diah said the appellate court was right in restoring the status quo of preserving the original Sections 3 and 6 prior to the 2013 amendment.
“We find no reason to depart from the Court of Appeal judgment. Hence, the apex court finds no merit in the appeal by the government and the Public Services Department (PSD) director general, and the appeal is dismissed.
“The court makes no order as to costs as this is public interest litigation,” said Mohamad Zabidin, who read the unanimous decision.
The bench was led by Court of Appeal president Tan Sri Abang Iskandar Abang Hashim. The other judges were Chief Judge of Sabah and Sarawak Tan Sri Abdul Rahman Sebli and Federal Court judges Datuk Seri Hasnah Mohammed Hashim and Datuk Rhodzhariah Bujang.
Mohamad Zabidin also answered in the affirmative the first question posed by the government and PSD in the appeal, namely 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, contravened 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 with the previous law.
Background of the case
The case concerns Aminah Ahmad, a former Wisma Putra staff member who retired in 2002, who brought the action in 2017 challenging the Jan 2013 amendment that brought about a flat rate of 2% increment to pensions annually.
This was compared with the previous scheme, where the pension of government retirees is revised based on the prevailing salary of incumbent civil servants at that grade.
Mohamad Zabidin agreed that Aminah and 56 others need not show they suffered loss in the new scheme, but they had to prove a less favourable situation compared with the old scheme.
The chief judge of Malaya said the COA had rightly pointed out that the 2013 PAA amendment is less favourable to the 1980 Act and this was also written in the High Court judgment.
Under Article 147 (1) of the Federal Constitution, the Pensions Right stipulates that: -
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.
Aminah initially lost the case at the High Court, but the Court of Appeal on Jan 22, 2022 allowed the appeal when then COA judge Datuk Darryl Goon in the landmark decision allowed the appeal.
At the Federal Court, leave was granted in June last year, after Aminah’s lawyers did not oppose the leave application by the government. The appeal was heard last December before the court arrived at the decision on Tuesday.
Senior federal counsels Shamsul Bolhassan, Liew Horng Bin and M Kogilambigai appeared for the government and the PSD.
Datuk Lim Choon Khim appeared for Aminah and 52 others.
At the COA, it held that the declaration of Sections 3 and 7 of PAA 2013 was applied prospectively from Jan 2022.