In probably the first reported case on premature retirement under the Minimum Retirement Age Act (MRAA), the High Court decided that the MRAA only applies to termination on the ground of age and not for termination for any other reason.
A. Background Facts
The employee's employment was converted from permanent to fixed term contract for a period of 3 years and further extended for 6 months until 30.4.2018. The Company did not renew the fixed term contract after 30.4.2018 resulting in the employee filing a claim at the Labour Office where he alleged that he had been prematurely retired at the age of 48.
B. Findings by the DG of Labour
It was held by the Labour Officer that employee's termination was not due to retirement on the ground of age. Accordingly, there was no premature retirement in breach of the MRAA and the employee's complaint was therefore dismissed.
C. Findings and Decision
On appeal to the High Court, the High Court confirmed that the MRAA will only apply if there is a termination on the ground of age. In other words, if the termination is for any reason other than on the ground of age, it does not constitute premature retirement under Section 5(3) of MRAA which provides:
"A premature retirement shall not include an optional retirement under section 6 and a termination of a contract of service for any reason other than on the ground of age."
The High Court commented that as the promotion and conversion of status of employment from permanent to fixed term was duly accepted by the employee without any objection, when the employee's fixed term contract came to an end on 30.4.2018, it was not due to termination on the ground of age (that would have rendered it premature retirement under the MRAA) but a case of cessation of employment on expiry of a fixed term contract. Hence, the MRAA did not apply. In coming to its decision, the High Court also noted that there was no termination letter to end the fixed term contract and neither did the Company issue a letter / notice informing the employee that he was retired due to his age.
This case confirms that the application of MRAA is restricted to only termination on the ground of age but not any other reason. The reasoning in this case is consistent with the meaning of the term "retirement" in s.2 of the MRAA which defines it as "termination of a contract of service of an employee on the ground of age".
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