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Malayan Law Journal Unreported/2010/Volume /Guppy Plastic Industries Sdn !d " Gan So! #ng and $rs % &2010' MLJU ()) % 21 July 2010 &2010' MLJU ())

Guppy Plastic Industries Sdn Bhd v Gan Soh Eng and Ors
HIGH COURT ( U!"! "U#PUR$ !%I!H BI&TI !"I ' PER#OHO&!& SE#! !& EH! I#!& &O R()*+)*,-)*..*( 'uly *.(. KC Wong & HF Wong (Messrs Zul Rafique & Partners) For the Applicant Fadiah Fi ri (Messrs Kesa!an) For the Respondents !%I!H BI&TI !"I ' 'U/G#E&T 0(1 *!e +pplicant applied ,or a -udicial re"iew under $rder ./ o, t!e 0ules o, t!e 1ig! 2ourt 1(30 to 4uas! 5y way o, an order o, certiorari t!e +ward 6o7118) o, 2003 dated /7)72003 made 5y t!e Industrial 2ourt w!ic! ,ound t!at t!e retirement o, t!e 0espondents under t!e retirement policy introduced 5y t!e +pplicant was a dismissal wit!out -ust cause and e9cuse7 *!e 0espondents were awarded 5ac:wages and compensation in lieu o, reinstatement7 0*1 *!e +pplicant contends t!at t!e 0espondents were law,ully retired in accordance wit! t!e contractual retirement age stipulated in t!e +pplicant;s #mployment 1and5oo:7 *!e retirement policy introduced on 17172000 and implemented in June 2001 stipulated t!at t!e compulsory retirement age ,or male wor:ers is .. years and ,or ,emale wor:ers is .0 years7 *!e 0espondents on t!e ot!er !and states t!at t!ey wanted to remain in employment ,or as long as t!ey are a5le to7 Bac2ground 0,1 *!e +pplicant is in"ol"ed in t!e plastic industry7 +ll t!e 0espondents commenced employment wit! t!e +pplicant in t!e 1((0s on a daily%rated 5asis7 +t t!e time t!e 0espondents were recruited< t!e +pplicant !ad no retirement policy and all letters o, o,,er o, employment issued prior to 17172000 did not contain any term on retirement age7 *!e 0espondents were recruited 5ased on t!eir !ealt! and a5ility and t!e +pplicant;s need ,or wor:ers7 =emales made up (0> o, t!e employees employed as production operators w!ic! re4uired good eye sig!t and 4uic: action7 031 *!e e"idence ,rom t!e +pplicant;s witness w!o was t!e General Manager ?2$VV2@ at t!e material time s!ows t!at t!e +pplicant started operations as a small ,amily 5usiness /0 years ago and t!ere was no 1uman 0esource Aepartment ?10A@7 *!e nature o, 5usiness in"ol"es operating mac!ines and wor:ing on t!e ,actory ,loor and o"er t!e years t!e !ealt! and sa,ety o, t!e employees 5ecame important as t!e +pplicant ,elt t!at some o, t!e employees were getting too old to !andle t!e mac!ines7 *!ere is also t!e ris: o, accidents ,or older employees !andling -ig or mac!ines to weld t!e parts w!ere t!ey are re4uired to put t!e parts into t!e -ig and i, t!ey are slow in t!eir response to t!e mac!ines< t!ey ris: in-ury7 Male employees are in"ol"ed in pulling t!e products on trolleys and carrying 5igger parts and operating !ea"y mac!ines w!ic! t!e +pplicant ,inds can 5e done until t!ey reac! .. years o, age7

Page / 0+1 *!e +pplicant t!en decided to set up a 10A and on 1B7B71((( t!e +pplicant !ired 2$C1 as t!e 1uman 0esource Manager to set up t!e 10A and to put up proper documentation o, t!e +pplicant;s !uman resource policies< and procedures7 2$C1 was assigned to compile all t!e terms and conditions o, ser"ice in a 5oo:let called t!e ;#mployment 1and5oo:; ?e9!7 2$%10@7 041 In Aecem5er 1((( t!e +pplicant !eld an orientation ,or its employees on t!e terms and conditions in t!e #mployment 1and5oo: w!ic! sets out t!e terms and conditions o, ser"ice as well as rules and regulations o, t!e +pplicant7 *!e #mployment 1and5oo: were distri5uted to all employees and also displayed on t!e 6otice oard in t!e +pplicant;s premises7 6ew terms introduced included t!e retirement age< an increase in attendance allowance ,rom 0M/0700 to 0M.0700 per mont!< compassionate lea"e< !ospitaliDation e9penses o, 0M2.0700< congratulatory lea"e and grie"ance procedures7 #mergency lea"e< congratulatory lea"e and medical 5ene,its were en!anced7 2lause 10?a@ o, t!e #mployment 1and5oo: con,ers on employees o, t!e +pplicant payment o, t!e ,ollowing allowances 5y way o, incenti"e sc!eme %

1i) 1ii) 1iii) 1iv) 1v)

transport allowanceE s!i,t allowanceE wee:ly ,ull attendance incenti"eE mont!ly ,ull attendance incenti"eE mileage claims7

051 y 2lause 1/ t!e +pplicant introduced t!e policy on compulsory retirement age and optional retirement age7 *!e compulsory retirement age ,or male wor:ers was set at .. years and ,or ,emale wor:ers at .0 years7 Under 2lause 1/?a@ t!e +pplicant could e9ercise its discretion to re% employ t!e retirees on a ,i9ed term contract 5asis i, t!ey were capa5le o, continuing to wor: and i, t!e +pplicant re4uires t!eir ser"ices7 *!e retirees could apply to 5e re%employed7 *!e terms o, t!e contracts were similar 5ut con"erted ,rom daily rate to mont!ly rate7 *!e #mployment 1and5oo: does not pro"ide ,or retirement 5ene,its 5ut all t!e retirees including t!e 0espondents were paid retirement 5ene,its7 *!e +pplicant says t!at t!ere was no protest ,rom t!e employees on t!e retirement age policy7 0-1 +ccording to 2$C2 t!e retirement age o, .. ,or male employees and .0 ,or ,emale employees is 5ased on t!e industry standard i7e7 ot!er companies in t!e plastic industry7 =or companies li:e +Dman 1amDa! Plasti: Sdn !d< Promooi Plastic Industries Sdn !d and Man Sing Plastic Industries Sdn !d t!e retirement age ,or ,emale is .0 years and ,or male wor:ers .. years7 061 #,,ecti"e 17172000 t!e +pplicant introduced t!e #mployment 1and5oo:7 C!en t!e #mployment 1and5oo: was introduced t!ere were employees w!o !ad passed t!e stipulated retirement age 5ut t!e +pplicant implemented t!e retirement age policy only in June 20017 y letters dated 137B72001 t!e +pplicant in,ormed a total o, 8/ employees including t!e 0espondents t!at t!ey !ad attained t!eir retirement age and would accordingly 5e retired e,,ecti"e 17)720017 *!e 0espondents made representations t!at t!ey !ad 5een dismissed wit!out -ust cause and e9cuse w!ic! was recei"ed 5y t!e Industrial 0elations Aepartment on 287)720017 +ccording to t!e +ward< t!e Ministerial re,erence under section 20?/@ o, t!e Industrial 0elations +ct 1(B) was made on 27/7200.7 Su78issions 0(.1 2ounsel ,or t!e +pplicant re,ers to t!e 2ourt o, +ppeal case o, Colgate Pal"oli!e ! #ap Ko Fong & Anor Appeal &2001' / 2LJ (7 In t!at case at t!e time t!e respondents commenced t!eir employment wit! t!e appellant< t!eir respecti"e contracts o, ser"ice did not speci,y t!e age at w!ic! t!ey would !a"e to retire7 It was only muc! laterE se"eral years a,ter t!e employment !ad commencedE t!at t!e appellant in,ormed t!e respondents t!at t!ey would !a"e to retire at t!e age o, .. years7 #"entually t!e respondents were as:ed to retire7 *!ey too: t!e position t!at it was

Page 8 not open to t!e appellant to retire t!em at .. years o, age7 *!ey said t!at t!ey oug!t to 5e permitted to wor: until t!ey attained B0 years o, age7 +t t!e Industrial 2ourt t!e issue posed 5y t!e court is as ,ollows %
777t!e issue &is' w!et!er t!ere was< in t!e a5sence o, a contractual retirement age ,or t!e claimant< a normal retirement age ,or employees in t!e claimant;s category7

0((1 1a"ing considered t!e e"idence and t!e testimonies< t!e Industrial 2ourt made t!e ,ollowing ,inding %
*!e re,erence to .. as t!e retirement age at certain points o, t!e !istory o, t!e relations!ip 5etween t!e 2ompany and its employees w!en employment matters were dealt wit! as re,lected in t!e successi"e 2ollecti"e +greements and t!e 2ompany;s 1uman 0esources Aepartment Personnel Procedures and Guidelines is indicati"e o, .. 5eing t!e normal retirement age o, t!e 2ompany7 *oget!er wit! t!e earlier stated matters< t!e 2ompany;s actions at certain de,ining moments o, t!e 2laimant;s career< inter alia< !is promotion to a managerial position and t!e e9tension o, !is ser"ice w!en !e attained t!e age o, .. compels t!e 2ourt to t!e "iew t!at t!e 2laimant !ad no reasona5le 5asis ,or contending t!at !e !ad t!e reasona5le e9pectation to retire at t!e age o, B07

0(*1 *!ere,ore t!e Industrial 2ourt ,ound in ,a"our o, t!e appellant ?see &1((3' / IL0 38/@7 Upon -udicial re"iew t!e 1ig! 2ourt 4uas!ed t!e Industrial 2ourt +ward and awarded compensation ,or t!e period 5etween t!e date o, dismissal and t!e date on w!ic! eac! respondent would attain t!e age o, B0 years7 $n appeal t!e 2ourt o, +ppeal allowed t!e appeal7 *!e 2ourt o, +ppeal agreed wit! t!e Industrial 2ourt t!at t!e non%e9istence o, a retirement clause in an employment contract cannot mean t!at no employer can e"er 5ring an employee;s ser"ice to an end 5y retiring !im at a certain retirement age< or t!at suc! an action would tantamount to dismissal wit!out -ust cause or e9cuse7 *!e 2ourt o, +ppeal ,ound t!at t!e Industrial 2ourt 2!airman !ad correctly directed !imsel, as ,ollows %
*!e 2ourt;s tas: is t!ere,ore to disco"er w!at is t!e reasona5le e9pectation or understanding o, t!e employees at t!e rele"ant time concerning t!e matter o, t!e age at w!ic! t!ey can reasona5ly e9pect to 5e compelled to retire7 In underta:ing t!is e9ercise< t!e 2ourt !as to consider all rele"ant ,acts and circumstances o, t!is case w!ic! constituted t!e employment relations!ip 5etween t!e 2ompany on t!e one !and and its employees and t!e 2laimant on t!e ot!er7

*!e 2ourt o, +ppeal appro"ed t!e re,erence 5y t!e Industrial 2ourt to t!e 1ouse o, Lords case o, Waite !$ %o!ern"ent Co""unications Headquarters &1(3/' I20 B./ w!erein Lord =raser in !is -udgment said %
/ t!ere,ore re-ect t!e "iew t!at t!e contractual retiring age conclusi"ely ,i9es t!e normal retiring age7 I accept t!at w!ere t!ere is a contractual retiring age< applica5le to all< or nearly all< t!e employees !olding t!e position w!ic! t!e appellant employee !eld< t!ere is a presumption t!at t!e contractual retiring age is t!e normal retiring age ,or t!e group7 ut it is a presumption w!ic!< in my opinion< can 5e re5utted 5y e"idence t!at t!ere is in practice some !ig!er age at w!ic! employees !olding t!e position are regularly retired< and w!ic! t!ey !a"e reasona5ly come to regard as t!eir normal retiring age7 1a"ing regard to t!e social policy w!ic! seems to underlie t!e +ct % namely t!e policy o, securing ,air treatment as regards compulsory retirement< as 5etween di,,erent employees !olding t!e same position % t!e e9pression ;normal retiring age; con"eys t!e idea o, an age at w!ic! employees in t!e group can reasona5ly e9pect to 5e compelled to retire< unless t!ere is some special reason in a particular case ,or a di,,erent age to apply7 ;6ormal; in t!is conte9t is not a mere synonym ,or ;usual7; *!e word ;usual; suggests a purely statistical approac! 5y ascertaining t!e age at w!ic! t!e ma-ority o, employees actually retire< wit!out regard to w!et!er some o, t!em may !a"e 5een retained in o,,ice until a !ig!er age ,or special reasons suc! as a temporary s!ortage o, employees wit! a particular s:ill< or a temporary glut o, wor:< or personal consideration ,or an employee w!o !as not su,,icient rec:ona5le ser"ice to 4uali,y ,or a ,ull pension7 *!e proper test is in my "iew not merely statistical7 It is to ascertain w!at would 5e t!e reasona5le e9pectation or understanding o, t!e employees !olding t!at position at t!e rele"ant time7 *!e contractual retiring age will prima ,acie 5e t!e normal< 5ut it may 5e displaced 5y e"idence t!at it is regularly departed ,rom in practice7

Page . 0(,1 In t!e present case t!e 0espondents in t!eir witness statements state t!at t!ey e9pect to wor: ,or as long as t!ey could7 2ounsel ,or t!e +pplicant su5mits t!at t!e e9pectation o, t!e 0espondents in t!is case to wor: ,ore"er or wor: ,or as long as t!ey can is not only unreasona5le 5ut also unaccepta5le in law7 It is su5mitted t!at t!is was -ust t!eir 5are e9pectations as no suc! promise was made at t!e time o, t!eir employment7 *!e +pplicant !as a re%employment policy ,or t!ose w!o !a"e retired 5ut a5le to wor: 5ut t!e 0espondents re,used to apply ,or re%employment7 5ut ,i9ing t!e retirement age at .. ,or males is ,air and reasona5le is per"erse as t!e ,inding is not supported 5y e"idence7 It is su5mitted t!at t!e conclusion arri"ed at 5y t!e Industrial 2ourt is so unreasona5le t!at no reasona5le 5ody o, persons would !a"e arri"ed at t!e conclusion t!at ,i9ing t!e retirement age ,or ,emales at .0 is un,air la5our practice in t!e ,ace o, o"erw!elming e"idence and industry practice7 0(31 2ounsel ,urt!er su5mits t!at t!e Industrial 2ourt ,ailed to ta:e into account t!at t!e 0espondents !ad ac4uiesced and a,,irmed t!e terms and conditions contained in t!e #mployment 1and5oo: w!ic! was introduced 5e,ore t!ey were retired7 *!ere was no re-ection o, t!e terms and conditions and neit!er did t!e 0espondents lea"e t!eir employment in protest7 $n t!e contrary t!e 0espondents en-oyed t!e 5ene,it o, t!e allowances pro"ided in t!e #mployment 1and5oo: 5ut later re-ected t!e retirement age clause7 2ounsel su5mits t!at since t!e 0espondents !ad 5ene,ited ,rom t!e terms and 5ene,its o, t!e #mployment 1and5oo: t!ere,ore t!ey cannot re-ect t!e retirement age w!ic! is contained in t!e same #mployment 1and5oo:7 It is su5mitted t!at t!e 0espondents cannot appro5ate and repro5ate7 $n t!e issue o, remedy counsel su5mits t!at t!e Industrial 2ourt erred in not deducting t!e retirement gratuities w!ic! is contrary to t!e principle o, un-ust enric!ment7 0(+1 =or t!e 0espondents counsel concedes t!at employees cannot e9pect to wor: in perpetuity and it is t!e prerogati"e o, t!e employer to impose a retirement age7 1owe"er counsel su5mits t!at t!e +pplicant !as ,ailed to pro"e t!at di,,erent retirement age ,or male employees and ,emale employees is 5ased on t!e esta5lis!ed norm o, t!e +pplicant;s company at t!at material time7 It is su5mitted t!at t!e imposition o, t!is new retirement age policy was done unilaterally 5y t!e employer and t!ere,ore t!e 5urden is on t!em to actually pro"e w!at actually constitutes t!e rig!t or t!e appropriate rig!t age o, t!e retirement age ,or t!e ,emale employees in t!is case7 2ounsel su5mits t!at t!ere are people w!o are employed in t!e +pplicant company 5eyond t!e age o, .0 and t!at is t!e reasona5le e9pectation o, t!e 0espondents7 /ecision 0(41 *!e ,emale 0espondents e9pect t!at t!ey oug!t to 5e allowed to wor:< and I 4uote< Fse!ingga saya 5ole!F7 +s stated 5y t!e Industrial 2ourt in Colgate Pal"oli!e (M) &dn 'hd ! #ap Ko Foong ?supra@ and a,,irmed 5y t!e 2ourt o, +ppeal< t!is is not a sensi5le proposition7 In t!at case t!e Industrial 2ourt as:ed FC!at was t!e reasona5le e9pectation o, t!e employees at t!e rele"ant time on t!e matterGF7 In t!e present case t!e Industrial 2ourt ,ound t!at t!e +pplicant employed t!e 8t! ,emale 0espondent w!en s!e was .0 and t!e ot!er ,emale 0espondents w!en t!ey were in t!eir ,orties7 *!e +pplicant !ad wor:ers in t!eir si9ties wor:ing7 *!ere,ore t!e Industrial 2ourt ,ound t!at it was t!e norm ,or wor:ers to wor: 5eyond B0 years and t!us t!e 0espondents !ad a reasona5le e9pectation to retire 5eyond t!e age o, .0 years7 +s su5mitted 5y counsel ,or t!e +pplicant and wit! w!om I agree< in determining t!e issue o, w!et!er t!e 0espondents !ad a reasona5le e9pectation to retire 5eyond t!e age o, .0 years and w!et!er t!e retirement policy o, t!e +pplicant is ,air and reasona5le< t!e Industrial 2ourt con,ined its consideration to t!e circumstances in t!e +pplicant company wit!out gi"ing consideration to w!at was t!e norm in t!e plastic industry on employees; retirement age7 =urt!er I ,ind t!at t!e Industrial 2ourt !as also ,ailed to ta:e into account t!at it was 5ecause t!e +pplicant !ad no retirement policy in place t!at t!ere were employees o, t!e +pplicant w!o continued to wor: past t!e retirement age t!at is t!e norm in t!e plastic industry7 *!is situation plus sa,ety issues ga"e rise to t!e need to ,ormulate proper retirement policies ,or t!e +pplicant;s employees7

Page B 0(51 *!e ,emale 0espondents raised t!e 4uestion w!et!er it is reasona5le and ,air to discriminate against ,emale wor:ers and retire t!em at .07 +rising t!ere,rom t!e Industrial 2ourt ,ound t!at t!e +pplicant was not -usti,ied in imposing a di,,erent retirement age ,or ,emale wor:ers and concluded t!at in respect o, t!e ,emale wor:ers t!e ,i9ing o, retirement age at .0 is un,air la5our practice 5ut t!e ,i9ing o, retirement age at .. years ,or male employees is ,air and reasona5le7 *!e Industrial 2ourt ,ound t!at t!e +pplicant ,ailed to support 5y any medical e"idence and or report ,rom Aepartment o, $ccupational Sa,ety and 1ealt! ?A$S1@ its contention t!at ,emale wor:ers a5o"e .0 years o, age employed as production operators were not doing well in per,orming t!e tas:s o, trimming t!e runner gate and c!ec:ing t!e products ,or any de,ect suc! as 5lac: dot< ,las!ing or crac:s w!ic! re4uire good eye sig!t and 4uic: action o, t!e !ands< and t!at t!ere was a !ig!er ris: o, accidents !appening to older wor:ers w!en !andling t!e -ig or welding mac!ines7 I agree wit! counsel ,or t!e +pplicant t!at 5y re4uiring medical e"idence or a report ,rom A$S1< t!e Industrial 2ourt !as considered irrele"ant matters w!en t!ere is no e"idence t!at suc! reports are crucial or pertinent to t!e ,i9ing o, retirement age7 0(-1 *!e Industrial 2ourt as:ed t!e 4uestion F777w!et!er t!e retirement age introduced 5y t!e 2ompany is reasona5le and ,air in t!e circumstances o, t!e caseF7 In Waite ! %o!ern"ent Co""unications Headquarters ?supra@< Lord =raser said Ft!e e9pression Fnormal retiring ageF con"eys t!e idea o, an age at w!ic! employees in t!e group can reasona5ly e9pect to 5e compelled to retire< unless t!ere is some special reason in a particular case ,or a di,,erent age to apply7F7 1a"ing ,ound t!at it was t!e norm ,or t!e +pplicant;s wor:ers to wor: 5eyond B0 years and t!ere,ore t!e 0espondents !ad a reasona5le 5asis to contend t!at t!ey !ad a reasona5le e9pectation to retire 5eyond .0 years< t!e Industrial 2ourt ,ound t!at t!e retirement age o, .. years ,or male employees is reasona5le and ,air 5ut t!e retirement age ,or ,emale employees at .0 years is un,air la5our practice7 *!e Industrial 2ourt ga"e no consideration at all to t!e e"idence t!at companies li:e +Dman 1amDa! Plasti: Sdn !d< Promooi Plastic Industries Sdn !d and Man Sing Plastic Industries Sdn !d all !ad t!e retirement age o, .0 years ,or ,emale wor:ers and .. years ,or male wor:ers7 *!ere was also no consideration gi"en to t!e e"idence o, t!e collecti"e agreements ,or employees in t!e plastic industry w!ic! all s!owed t!at t!e retirement age ,or male employees is .. years and ,or ,emale employees is .0 years7 *!e Industrial 2ourt ,ailed to consider w!et!er< on t!e e"idence produced 5y t!e +pplicant to s!ow t!e norm ,or retirement age in t!e plastic industry< it was still reasona5le ,or t!e 0espondents to e9pect to wor: past t!e retirement age ,or wor:ers in t!e same category w!o are employed 5y ot!er companies in t!e plastic industry w!ic! !a"e a retirement age policy in place7 =urt!er t!e Industrial 2ourt !as ,ailed to consider w!et!er it is ,air and reasona5le ,or t!e +pplicant< w!ic! !ad no retirement policy in place< to adopt t!e industry norm on retirement age as implemented 5y ot!er companies in t!e same industry as t!e +pplicant or as pro"ided ,or in t!e collecti"e agreements o, ot!er companies in t!e plastic industry w!ic! t!e Industrial 2ourt !ad ta:en cogniDance o,7 0(61 2ounsel ,or t!e +pplicant also re,erred to t!e ,act t!at t!e 0espondents did not raise any o5-ection to t!e retirement age policy w!en t!ey were 5rie,ed on t!e #mployment 1and5oo: in Aecem5er 1(((7 *!e 0espondents !a"e not produced any e"idence o, any o5-ection7 I agree wit! counsel ,or t!e +pplicant t!at on t!e ,ailure o, t!e 0espondents to o5-ect to t!e retirement age policy t!ey are deemed to !a"e accepted or ac4uiesced to t!e policy7 =urt!er t!ere is e"idence t!at t!e 0espondents accepted and en-oyed t!e 5ene,its in t!e ,orm o, increased or new allowances pro"ided under t!e #mployment 1and5oo:7 *!e Industrial 2ourt !as ,ailed to address t!ese matters7 0*.1 I agree wit! counsel ,or t!e +pplicant t!at t!e Industrial 2ourt !as erred 5y ,ailing to ta:e into consideration rele"ant matters and ta:ing into consideration irrele"ant matters7 In my opinion a reasona5le tri5unal similarly circumstanced would not !a"e arri"ed at t!e conclusion t!at t!e Industrial 2ourt did7 =or t!e a,orementioned reasons I allowed t!e application wit! costs o, 0M.<000700 to t!e +pplicant7