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The Court of Appeal today, 9 March, overturned an earlier High Court ruling that would have seen the government paying out RM1.7 billion to over half a million retirees
The case started when Aminah Ahmad, a former officer at the Ministry of Foreign Affairs, together with 56 other retirees, filed a judicial review seeking to have their pensions adjusted based on the pre-2013 formula, according to FMT.
This formula required the government to review retirees’ pensions in line with the salary adjustments for active civil servants.
In January 2023, the High Court allowed the application, effectively granting the retirees’ request and ordering the government to pay arrears totalling RM1.7 billion to 531,976 retirees.
The payout was based on adjustments under the 2013 formula, which the applicants argued was more favourable than the current method outlined in the 2016 Service Circular.
Pensioner Aminah Ahmad, a former Wisma Putra staff who retired in 2002, brought the action in 2017.
Image via Zahid Izzani/The Edge
Why did the Court of Appeal change the decision?
The Court of Appeal, in a unanimous decision by a three-judge panel chaired by Justice Azhahari Kamal Ramli, overturned the High Court ruling.
The appellate court ruled that the matter had already been decided in a 2022 Court of Appeal judgment that invalidated the 2013 amendment to the Pension Adjustment Act, which had provided retirees with a fixed annual 2% increase.
The judges said that the retirees’ current application was res judicata — a matter already adjudicated — and therefore constituted an abuse of the court process.
The panel agreed with the government’s argument that the 2016 Service Circular PP 1/2016 was an “enhancement” to the civil service scheme rather than a mandatory salary revision.
Justice Lim Chong Fong and Justice Meor Hashimi Abdul Hamid clarified that today’s ruling applies specifically to the 57 respondents in this case, not all retirees nationwide.
The court also noted that Aminah failed to prove she had suffered any loss from the 2013 amendment and had not appealed the 2022 decision at the time.
How does this affect retirees?
The government is no longer required to pay the RM1.7 billion in pension arrears previously ordered by the High Court.
The total payout of RM1.7 billion in pension arrears, distributed among the 531,976 retirees involved, would have amounted to an average of approximately RM3,195 per person.
While the court’s specific ruling on “abuse of process” was directed at the 57 respondents, setting aside the High Court order means all 531,976 retirees will not receive the previously mandated adjustment.
Putrajaya is no longer bound to adjust pensions based on the 2016 Service Circular (PP 1/2016), as the court agreed it was an “enhancement” rather than a salary revision.
What’s next?
Lawyers representing the retirees, including Baljit Singh Sidhu and Gurpreet Kaur Pannu, said they intend to seek leave to appeal the decision at the Federal Court.
The government was represented by Federal Counsel Sallehuddin Ali.
Aminah Ahmad (fifth from right) with lawyers Datuk Dr Abd Shukor Ahmad (her left) and Datuk Baljit Singh Sidhu (second from left) and the other pensioners.
Image via The Edge