The Malaysian Bar - Retirees who return to work

Home

News

Members' Opinions and Comments

Retirees who return to work

Tuesday, 18 October 2011 08:49am

©The Star (Used by permission)
ARTICLES OF LAW By BHAG SINGH

Security of tenure has to be on the basis of a practical period; inability to work on medical grounds can bring employment to an end after a certain period.

THERE has been considerable interest following a recent article on how short employment contracts entered into after retirement, and which continue to be renewed, can sometimes result in new permanent employment.

On the other hand, there may be concern among employees who are indisposed and unable to work for a long period. Employers may be unhappy about the situation. The displeasure shown by the employer towards the employee, will add to the stress faced by the latter.

Of course, there are two sides to a coin: an employer or employee will look at things from their point of view as events unfold. But before that, let me deal with the situation in which the employee, upon retirement, is put on a year-to-year contract which runs for several years. Could this turn him into a permanent employee again?

Such a scenario would not be consistent with real life.

An employee can only work so long as he is fit to perform the functions that are entrusted to him. Once an employee, at a certain age, can no longer carry out specific activities and duties, there is no longer any basis for the relationship.

Permanent contracts

The concept of permanent employment exists to create security of tenure for employees. The underlying philosophy is based on social and welfare considerations. It is intended to ensure employment for an individual during his productive working life.

There may be occasions where, though an employee has reached the accepted retirement age, the employer may still need his services. This is especially so when the employee may be able and willing to continue working and contribute to his company.

When this happens, such an arrangement clearly falls outside the scope of social welfare philosophy which seeks to provide security of tenure during the ordinary working life of an individual.

I am inclined to take the view that when an employee is engaged on short-term contract after the statutory retirement age, the presumption should be that such a contract is not intended to create further permanent employment.

Of course, in given circumstances, contrary argument can be raised to say that a new permanent contract has come into existence. Employers should safeguard themselves by making their stand clear in such a situation, and avoid any terms or inferences that could create any arguments which give rise to a permanent contract.

The situation would be different if such contracts are entered into in a scenario that is not post-retirement. In such a case, a short-term contract year after year on the same terms and conditions, would appear to suggest that there is an intention to create a permanent relationship. Here it may be viewed as an attempt to avoid the objectives of the social legislation.

Overally, the matter remains subjective. Whilst repeated renewals may be construed as an indication of intention to make it permanent, it is also relevant to look at the detailed arrangements that are entered into between the employee and employer. The nature of the work to be done and the extended period is also relevant.

Medical concerns

Another aspect of our discussion is a situation raised by a reader who is undergoing medical treatment and is required to go to the hospital daily; he is therefore not able to go to work.

Whether by virtue of the law or contractual arrangement, an employee is entitled to the specified or agreed period for which he or she is entitled to medical leave. If this period has not been utilised, the employee will be entitled to paid leave for the number of days certified by a medical practitioner as medical leave.

In other instances, a longer period of medical leave is provided for when an individual is hospitalised. All this is, of course, apart from the maternity leave which the law stipulates. Medical leave is not limitless. What happens if all the medical leave has been utilised? What happens to the employee? In such a case, the employee is not entitled to paid medical leave. However, is the employee entitled to unpaid leave?

Some employment contracts provide that if an employee is unable to work beyond the permitted medical leave period, he could go on unpaid leave for a specified period. This may be of some conciliation to an employee. Even though he does not get paid, at least he has a job waiting for him when he is well and can return to work.

But what happens if this period is also exhausted? Sometimes there is no such provision. If so, it is a matter for the employer to decide. Then again, how long will the employer allow if he does? In such a case, this often means a reasonable period.

The employment will come to an end if the employee cannot work. The employee will no longer have his job. This is because the basic feature of an employment contract is service by the employee in exchange for a salary.

From the point of view of the employee, it may be felt that he should be accommodated until he gets well. However, it is a different perspective from the point of view of an employer. This is because such absence can have an adverse effect on the employer’s ability to function.

It also depends on the structure and size of the employer. There are cases in which the employer may have other workers who can cover up for the sick employee for an extended period. But this may not always be possible.

All said and done, is such termination unfair? In the context of contractual relationships, it is fair. This is because at this stage, the matter becomes a welfare issue rather than an employment issue.

Set as favourite

Email This