The Pregnant Pause

Foo Siew Li explains how getting pregnant may put the brakes on a woman’s career in the private sector.

In the highly commended landmark decision in Noorfadilla binti Ahmad Saikin v Chayed bin Basirun and Ors [2012] 1 CLJ 769, the High Court held that the refusal to employ a woman on the grounds of pregnancy alone is a form of gender discrimination and unconstitutional under Article 8 of the Federal Constitution. An appeal by the Government against this decision was subsequently withdrawn and the matter was laid to rest, or so it seemed.
Barely three years later, the Court of Appeal in the recent case of AirAsia Berhad v Rafizah Shima binti Mohamed Aris [2014] MLJU 606 held that a provision in a training agreement which does not restrain marriage and/or prohibit pregnancy if the training is completed in the manner stipulated in the agreement, does not discriminate against the rights of women.
This article explains the salient points of this Court of Appeal decision, which sets the current landscape of the rights of women in the workforce in Malaysia. 
AirAsia Berhad is the Appellant in this appeal. Rafizah Shima binti Mohamed Aris, is the Respondent, and was an employee of the Appellant.
On 19 October 2006, the Respondent executed a training agreement to undergo an Engineering Training Programme ("Training Agreement") for a period of four years with the Appellant. A material term in the Training Agreement was Clause 5.1(4) which reads as follows:
“Clause 5.1
It is a fundamental term and condition of the Agreement that none of the following events or circumstances shall occur after execution of this Agreement. The occurrence of any of the following events and circumstances shall constitute a repudiatory of the Agreement:
(4) (This clause is only applicable to female Engineering Trainee) when Engineering Trainee gets pregnant during the Course.”
In June 2010, in the course of the training period, the Respondent informed the Appellant that she was pregnant but wished to continue her training as she was only due to deliver at the end of 2010. Arising from this, the Appellant terminated the Training Agreement and the Respondent’s employment on 1 July 2010.
The Appellant filed a civil suit at the Sessions Court for breach of the Training Agreement and claimed the sum of RM92,000.00 as agreed liquidated damages from the Respondent. On 18 April 2012, summary judgment was entered against the Respondent in the Sessions Court for the said sum. However, the Respondent’s appeal against the decision was allowed by the High Court.
Meanwhile, the Respondent filed an originating summons (“Respondent’s OS”) in the High Court on 17 April 2012 seeking, amongst others, a declaration that Clause 5.1(4) of the Training Agreement was illegal, null and void as the said clause had the effect of discriminating against the Respondent's rights as a married woman and contravened Article 8 of the Federal Constitution of Malaysia (“Federal Constitution”) and the Convention to Eliminate All Forms of Discrimination Against Women ("CEDAW"). The Appellant applied to strike out the Respondent’s OS.

On 12 October 2012, the High Court granted the order sought in the Respondent's OS and dismissed the Appellant's application to strike out the Respondent’s OS.
Article 8 of the Federal Constitution, the provision on equality in the Federal Constitution, provides as follows:
8. Equality

(1) All persons are equal before the law and entitled to the equal protection of the law.

(2) Except as expressly authorized by this Constitution, there shall be no discrimination against citizens on the ground only of religion, race, descent, place of birth or gender in any law or in the appointment to any office or employment under a public authority or in the administration of any law relating to the acquisition, holding or disposition of property or the establishing or carrying on of any trade, business, profession, vocation or employment.”
CEDAW is a landmark international Convention that affirms the principles of human rights and equality for women around the world. It defines what constitutes discrimination against women, and sets up an agenda for national action to end such discrimination. A key principle under CEDAW is the obligation of the state to implement the Convention and thus give effect to the Convention at the domestic level.
Malaysia is a signatory to CEDAW and acceded to the Convention on 5 July 1995, but has yet to expressly incorporate the provisions of CEDAW into domestic law by an act of Parliament.
There were initially two related appeals emanating from the decisions of the High Court. The first arose from the High Court’s decision to allow the Respondent’s OS and the second, from the dismissal of the Appellant’s application to strike out the Respondent’s OS. At the commencement of the hearing of the appeals, the Appellant withdrew the second appeal. 
The Court of Appeal considered the Federal Court case of Beatrice AT Fernandez v Sistem Penerbangan Malaysia & Anor [2005] 2 CLJ 713. In Beatrice, the applicant was a flight stewardess who had served MAS for 11 years.  The terms and conditions of her service were governed by a collective agreement between the MAS Employees Union and MAS.
One of the clauses of the collective agreement required an air stewardess to resign if she became pregnant or face termination. The applicant became pregnant but refused to resign. MAS then terminated her services. The Federal Court, concurring with the Court of Appeal and upholding the High Court’s decision, held that a constitutional safeguard such as the right to equality fell within the domain of public law and as such, applied only to the contravention of individual rights by a public authority.
In the present appeal, the Court of Appeal was of the view that the High Court judge had erred in law and in fact in disregarding the Federal Court's decision in Beatrice, which was a decision of the apex court in Malaysia. The Court of Appeal held that the constitutional safeguard in the right to equality does not apply to private entities such as the Appellant in the present instance. Hence, the Court of Appeal held that the Training Agreement, which deems a female employee who becomes pregnant during the training period to have committed a repudiatory breach of the Training Agreement is valid and enforceable.
The Court of Appeal considered in detail the High Court’s decision in Noorfadilla. In Noorfadilla, the plaintiff had successfully applied to the Hulu Langat District Education Office for a teaching position. However, the appointment was revoked when she informed an officer of the Hulu Langat Office that she was pregnant.
The main issue before the court in Noorfadilla was whether the defendants’ refusal to allow a pregnant woman to be employed as a teacher would tantamount to gender discrimination and a violation of Article 8(2) of the Federal Constitution. The High Court clarified the meaning of the terms “equality” and “gender discrimination” and held that the CEDAW has the force of law and is binding on its member states, including Malaysia.
However, contrary to the views of the High Court in Noorfadilla, the Court of Appeal in the instant case held that CEDAW does not have the force of law in Malaysia in view of the fact that it has not been domesticated, i.e. its provisions had not been enacted into any local legislation.
Hence, the Court of Appeal concluded that Clause 5.1(4) of the Training Agreement does not discriminate against the rights of women and does not restrain marriage and/or prohibit pregnancy if the Respondent completes her training in accordance with the Training Agreement.
An online article by Bloomberg on 20 August 2014 reports that according to data compiled by the World Bank, Malaysia has the lowest rate of female participation in the workforce in Southeast Asia, with only about 46.8% of women aged between 15 to 64 years being employed in 2012. A 2012 World Bank study further shows that attaining a higher female participation rate could provide Malaysia with a growth dividend of about 0.4 percentage points a year.
While the public law aspect of Noorfadilla remains applicable to cases that involve Government authorities and agencies as respondents, this recent decision has cast doubt on Noorfadilla insofar as it relates to the legal status of CEDAW in Malaysia. While this decision appears to be a step backwards in relation to the protection of women against discrimination at the workplace, perhaps it could be the impetus for the Malaysian Government to initiate steps to domesticate CEDAW and thereby unleash the power of women in the workforce in Malaysia.
The cloud could just have a silver lining.