Appeals court rules retired judge’s pension adjustment unconstitutional
The government has been ordered to pay retired judge Ian Chin RM301,768.60, being the shortfall in pension payments made between 2016 and 2022.
PUTRAJAYA: The Court of Appeal has, in a split decision, affirmed a High Court ruling that a retired judge was entitled to recover from the government a shortfall in pension payments made to him between 2015 and 2022.
Justice Ravinthran Paramaguru said a majority on the three-judge panel endorsed the findings of a High Court ruling delivered two years ago in favour of ex-judge Ian Chin.
Justice Azimah Omar concurred with Ravinthran, while Justice Lim Chong Fong dissented.
Ravinthran, who read the broad grounds, said Article 125(7) of the Federal Court guarantees all retired judges a pension.
He said the amended Judges’ Remuneration Act 2014 granting serving judges a 2% annual pension rise based on their last drawn salary was in breach of the constitutional guarantee.
“A pension benefit is a constitutional protection accorded under Article 125(7),” he said in the ruling delivered online.
Ravinthran said the court was also bound by the legal principle established in a similar case brought by 56 retired civil servants against the government.
On June 27 last year, the Federal Court held that a 2013 amendment violated a constitutional provision on pensions by putting retired civil servants in a less favourable situation than previously held.
In a unanimous decision, the apex court said Section 3(2) of the Pensions Adjustment (Amended) Act, passed in 2013, put former civil servants in a “less favourable situation” with regard to their entitlement to increments in their pension.
The apex court said the existence of such a situation meant that the amended Section 3(2) breached the constitutional protection accorded to pensioners by Article 147 of the Federal Constitution.
Lim, in his minority judgment, agreed with the majority that pension benefits are a right protected under the constitution.
However, he said Article 8 of the constitution allows for discrimination based on the doctrine of reasonable classification between serving and retired judges.
Lim said the salary revision in 2015 was intended to attract lawyers to join the judiciary, whereas the 2% pension adjustment was to address economic inflation.
“The amendment to the law is proportionate and legal to serve different purposes,” he added.
Chin, who retired in 2008, commenced the suit in the Kota Kinabalu High Court in February 2022, naming the government and the public services department as defendants, and seeking several declarations.
Chin, who served 201 months as a judicial commissioner and High Court judge, claimed that the pension paid to him before 2015 was altered by the government.
On Dec 9, 2022 Justice Leonard David Shim declared the amended Judges’ Remuneration Act 2014 void and inconsistent with Article 125(7) of the Federal Constitution.
He held that provisions in the constitution that provide for the terms of office, including the remuneration and pension rights of judges, cannot be altered to their disadvantage after appointment.
Shim also ruled that the government had violated Article 125(7) of the Federal Constitution by failing to pay the monthly pension due to Chin according to a prescribed formula.
He ordered that Chin be compensated RM301,768.60, being the shortfall in the pension paid to him between July 2016 and February 2022. The amount was inclusive of interest at 5% per annum.
The court also revoked a 2% annual increment on the pension paid to all retired judges, irrespective of whether they retired before or after 2015.
The issue arose when the government made a salary revision in 2015 for judges, providing a higher pension plus a 2% annual increment for those who retired after the amendment.
However, those who retired before 2015 continued to receive pensions based on their old salaries plus a 2% annual rise.
Chin appeared in person while senior federal counsel Shamsul Bolhassan and Liew Horng Bin represented the government.