Need to define ‘retirement age’
Monday, April 16, 2012 - 14:40
The courts have recognised the term, 'implied retirement age', introduced unilaterally, depending on the facts of the individual case when it is considered 'fair and based on the reasonable expectation of the employees'.
Generally, a unilateral variation of an employment contract by the employer which goes to the root of the contract, might be possibly considered a fundamental breach which warrants constructive dismissal.
But, it is not the case when retirement age is imposed much later, even though there is no written employment contract or when there is no term on retirement age in the employment contract.
A person, employed under a contract of service without a term on retirement age, might be serving his employer for years or decades.
Say a man, healthy in mind and body, is 54 today, when suddenly the employer issues a directive that every employee in his category has to retire when he reaches 55 on his next birthday.
What is the reasonable expectation for him? Work as long as he is still capable and healthy?
Former Federal Court judge Datuk Seri Gopal Sri Ram delivered a famous decision when he sat in the Court of Appeal. He said the expression of "life" appearing in Article 5(1) of the Federal Constitution is wide enough to encompass the right to livelihood.
However, there are times when business efficacy was considered more important than an employee’s security of tenure.
Retirement age has been forcibly implied on numerous occasions. It was said that the absolute freedom of contract is now subject to “higher claims of social justice”.
Another issue related to retirement age is whether having a different retirement age for men and women is discrimination, eg. 55 for men and 50 for women.
If you ask women, most will say it is clear discrimination. In relation to this, Article 8 (2) of the Federal Constitution was amended in July 2001 to include “gender” in commitment to the International Labour Organisation’s Convention 111 and the Convention on the Elimination of All Forms of Discrimination against Women to protect against gender discrimination.
The proposed legislation should address the gender issue and whether there is a need for a detailed study to look into whether different industries or trade require a different retirement age or just a “blanket” retirement age for all employees.
If the proposed legislation does become a reality it would be a big leap in introducing a legislative certainty on the retirement age issue and in protecting an employee’s security of tenure in line with Article 5(1) of the Federal Constitution.