Announcement

China employee lawfully retired at 55 years old under China staff policy instead of 60 years old under Malaysian retirement law

Share:

Print
15 June 2022

Our Partner, Teoh Alvare and Associate, Loh Qiao Wen from our Employment & Industrial Relations practice group had successfully acted for MCC Overseas (M) Sdn Bhd in a wrongful dismissal claim by a former employee at the Industrial Court.

The Claimant, a China national, was employed with the Company since March 2016. Pursuant to a Memo in December 2018, the Company had informed all employees that the Staff Handbook had been revised (Revision 2) with effect from January 2019. The pertinent clause in this case was in respect to the retirement age for China Chinese employees which stated that it will be based on the China Policy of Retirement Age, which was 55 years old for female employees, a revision from the previous 60 years old retirement age in the initial Staff Handbook (Revision 1). The Claimant had acknowledged and accepted the Staff Handbook (Revision 2).

In May 2019, the Company informed the Claimant that she would be attaining the retirement age of 55 and that her last day of service would be in April 2019. Nevertheless, the Claimant failed to, amongst others, return her key and access card, vacate her hostel room and submit the Leaver Form to the Inland Revenue Board for tax clearance.

The issue for the Industrial Court to determine was whether the Claimant was terminated from her employment or whether she was retired from service.

The Claimant contended that there was a pre-contract promise made by the Company that she would retire at the age of 60 years old wherein prior to joining the Company she had queried about her retirement age and she was informed that her retirement age would be 60 years old following the laws of Malaysia. However, the Industrial Court held that the Company was merely informing the Claimant the retirement age of 60 years old as it was in accordance with the Staff handbook (Revision 1) and the prevailing laws of Malaysia:

“There was no pre-contract promise given or even guaranteed to the Claimant by the Company that her retirement age will remain at 60 years old. COW-2 was merely stating the policy at the material time as provided under the Staff Handbook Revision 1. And that retirement age policy was later amended by the Staff Handbook Revision 2, which the Claimant was fully bound by.”

The Company’s counsel were successful in arguing that there was no promise or guarantee that the Claimant’s retirement age will be 60 years old.  The Claimant was bound by the revised retirement age for China employees provided in the Staff Handbook (Revision 2). Therefore the Claimant’s employment with the Company had naturally ceased due to her retirement when she attained the age of 55 years.

For more insight into this area of law, please contact our Partners in the Employment & Industrial Relations Practice Group:
P Jayasingam
Wong Keat Ching
Thavaselvi Pararajasingam
Teoh Alvare

Please email your details to [email protected] if you would like to subscribe to our Knowledge Centre.

Let's Connect!
➭ LINKEDIN: Zul Rafique & Partners
➭ INSTAGRAM: @zrplaw