Re­tirees who re­turn to work

The Star Malaysia - Star2 - - INSIGHT -

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 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. 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 short­term con­tract year af­ter year on the same terms and con­di­tions, would ap­pear to sug- gest 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.

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