Pensioners will appeal
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| Pensioner Aminah Ahmad (front row, right, wearing a green baju kurung) with her counsel Datuk Dr Baljit Singh Sidhu (front row, centre), former High Court judge Datuk Noor Azian Shaari (front row, left) and other pensioners and their lawyers. |
Govt succeeds in setting aside RM1.7 bil pension adjustment arrears payment order
In PUTRAJAYA, Malaysia, the federal government has been successful in setting aside an order to pay out a RM1.7 billion pension adjustment arrears to more than 500,000 pensioners, as the Court of Appeal today, Monday 9 March 2026, allowed the Public Service Department (PSD) and the government’s appeal.
Reported by The Edge Malaysia, Court of Appeal judge Datuk Azhahari Kamal Ramli said the High Court had erred in allowing applicant Aminah Ahmad’s judicial review filed in 2024, as the appellate court considered her review an abuse of the court process as it should have been raised by her in her 2017 originating summons (OS) which had been successful.
Azhahari, who is the second judge in a three-man bench led by Datuk Lim Chong Fong and with Datuk Meor Hashimi Abdul Hamid as the third judge, said the consideration by the High Court on the PSD No 1 Circular 2016 is irrelevant here, as the lower court should have considered the government’s submission of res judicata (a matter that has been adjudicated) and the matter is an abuse of the court process.
"The applicant (Aminah) said they had not raised the matter on the 2016 circular and not appealed on the matter (following her successful 2017 OS). Hence, her judicial review application is prohibited by res judicata and is considered an abuse of the court process.
“On this ground alone, this court is warranted to make an appellate intervention as the High Court fell into a plain error. The appeal by the federal government is allowed,” Azhahari said in the unanimous decision.
The bench made no order as to costs since this is a public interest litigation case.
In January last year, the High Court had allowed Aminah's judicial review and ordered a mandamus (an order to compel) the government and the PSD to pay the arrears on the adjustment within three months, as it had found the No 1 Circular 2016 could be considered as a salary revision, which also amounted to a salary revision for pensioners.
The High Court, however, had allowed a stay on the government having to fork out the RM1.7 billion, as the then-PSD director general, Tan Sri Wan Ahmad Dahlan Abdul Aziz, had said in his affidavit that any public funds would have to be managed regularly and carefully, to ensure that any planning that had been made would not be affected.
“This is to protect the interests of the government. As respondents, nowhere did we say that the Malaysian government does not have the ability to pay the sum. The cited figure of RM1.7 billion should not be deemed as a threat or create a threat to anyone, including to this honourable court.
“This (the RM1.7 billion) is based on the rough calculation based on the available data and cross-referencing with the service records of the pensioners,” Wan Ahmad Dahlan had said, adding that should the government be successful in its appeal, it may have a problem recovering the sum (RM1.7 billion) from the pensioners.
Aminah and the 55 pensioners in the judicial review were represented by Datuk Dr Baljit Singh Sidhu and Gupreet Kaur of Messrs Shukor Baljit and Partners, while senior federal counsel Ahmad Hanir Hambaly @ Arwi and federal counsel Muhammad Salehuddin Md Ali appeared for the government and PSD.
2017 OS by Aminah
Aminah, a former Wisma Putra staff member who retired in 2002, brought the action in 2017, naming the government and the PSD director general as respondents.
In the OS, she sought a declaration that Section 3 and Section 7 of the Pension Adjustment Act 2013 (PAA 2013), which allow pensioners a 2% increase annually to their pension, are unconstitutional and should be declared null and void, as compared to what pensioners had been getting based on the PAA 1980, and also for her and other pensioners to be able to recover the arrears as a result of the PAA 2013.
The pensioners cited Article 147 of the Federal Constitution regarding the protection of pension rights, which stipulates that:
The law applicable to any pension, gratuity or other like allowance (in this constitution referred to as an “award”) granted to a member of any of the public services, or to his widow, children, dependants, 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.
At the High Court, Aminah had been unsuccessful in proving that she had suffered losses in her pension. The court had also decided against her with regard to her attempt to seek a declaration that the 2% increase annually should be declared null and void.
Aminah did not appeal over the losses of her pension and only appealed with regard to the constitutionality of the 2% raise in the PAA.
In January 2022, the Court of Appeal had allowed Aminah’s appeal, where the then judge, Datuk Darryl Goon Siew Chye, had allowed the striking out of Section 3 and Section 7 of the PAA 2013, as the appellate court had ruled that the 2013 amendment may result in a less favourable position, and hence contravenes Article 147 of the Federal Constitution.
However, the appellate bench ruled that the decision should apply prospectively from January 2022, and not retrospectively from 2013.
The federal government then failed in its appeal before the Federal Court in 2023, when then-Chief Judge of Malaya Tan Sri Mohamad Zabidin Mohd Diah had ruled that the appellate court was right in restoring the status quo of preserving the original Sections 3 and Section 6 of the PAA 1980, prior to the 2013 amendment.
“We find no reason to depart from the Court of Appeal judgement. Hence, the apex court finds no merit in the appeal by the government and the PSD, and the appeal is dismissed,” the Federal Court had ruled.
In Monday’s decision, Azhahari said since Aminah had not appealed with regard to the loss of pension that she and the other pensioners had suffered in the 2017 OS, the appellate bench agreed with the government and the PSD’s submission that the filing of the 2024 judicial review to compel the mandamus amounted to res judicata and an abuse of the court process.
Pensioners will appeal
When met after proceedings, Baljit said they would file a leave to appeal to the Federal Court, as the appellate bench had decided on a technicality, namely the matter is considered an abuse of the court process.
He said that the 2017 OS was mainly to declare the PAA 2013 null and void, and since the 2022 Court of Appeal had ruled that the pension should be applied prospectively, then the pensioners are entitled to get the arrears on the adjustments which were owed to them since 2022.
“The government has made no changes on the pension adjustments based on the salary revisions. All of these pensioners are elderly, and the funds are needed for their family.
“Here as in this case, there is a retired major among the pensioners, but at present he is receiving a pension that is equivalent to a retired corporal. The government has not been adjusting the pensioners’ pension equivalent to the present salary,” he said.
Baljit said they would try to ask for a full Federal Court bench to hear the appeal.
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| Adapted by Fauzi Kadir Chief Editor
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