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“Poor Performance” Reason for Termination?


First and foremost, it is not wrong for the employer to terminate its employee due to “Poor Performance” provided that it is done in accordance with law. The burden is on the employer to prove that its employee is having performance issue which justify his or her dismissal. However, there are several requirements and/or elements that must be fulfilled by the employer to dismiss its employee on the ground of poor performance. So, what are the legal requirements and/or elements to be fulfilled when the employers decide to terminate their employees for the reason of “Poor Performance”?

1st Element: The Employer Shall Warned The Employee’s Unsatisfactory Performance

The first element is the employer shall warned the employee’s unsatisfactory performance. Warning may be given either in verbal or in writing but it is more favorable for a warning to be in written so that when the matter being adjudged before the Industrial Court, it is easier for the employer to satisfy this first element. Not only that, a warning should be clear and specific in such away that the areas of the employee unsatisfactory performance has been communicated and/or stated clearly to him or her.

Usually, when the employer has notified the employee that he or she is having performance issue, the employer also will inform the said employee that he or she will be placed under the Performance Improvement Plan (“PIP”). The contents do not constitute legal advice, are not intended to be a substitute for legal advice and should not be relied upon as such

What Is PIP?

PIP is the platform for the employer or the company to assist its non-performer to improve his performance with the company The structure, the method of assessment and the period of PIP is depend on the practice of the Company which usually being provided in the employee’s manual or handbook. This is because it is an established principle of law that the employer is the best person to evaluate his employee’s performance.

However it is also trite law that such evaluation and/or assessment must be done in bona fide or in good faith. Therefore, throughout the PIP the employer must show that he has assessed and/or monitor the employee’s performance in a good faith.

What’s Constitute Good Faith?

The employer is said to have a good faith in assessing or evaluating his employee’s performance when he has given the said employee a sufficient opportunity to improve and it is the second element that the employer need to prove.

2nd Element: The Employee Is Given “Sufficient Opportunity” To Improve

In normal case scenario, sufficient opportunity to improve is when the employee is being given necessary guidance to improve his performance which is consider as poor or unsatisfactory by his employer.

The employee is also considered to have a sufficient opportunity to improve but not limited to when:-
a)The employee is given a reasonable number of tasks and/ or targets to achieve during the PIP;
b) The tasks and/or the targets given to the employee during the PIP must be related to the areas of his non-performance;
c) The employee is given a necessary guidance by his employer i.e through its immediate superior throughout the PIP;
d) The employee is given a reasonable time to complete the tasks given by the employer during the PIP.

Meanwhile, examples when there was no sufficient opportunity to improve his performance but not limited to when:-

a)The employee is given large volume of tasks and/or unreasonable targets to achieve during the PIP;
b)The tasks or targets given during the PIP is not related to the employee’s unsatisfactory performance;
c)The employee was not monitored and/or assisted by the company through his superior during the PIP;
d) The employee was given a very short time to complete large number of tasks and/or targets during the PIP.

The clear application of this element can be found in the case of FELICIA APING LAING @ APING LIANG v. ERICSSON (MALAYSIA) SDN BHD [2019] MELRU 1070 whereby in this case, the Claimant was given three months to complete large volume of tasks which cause her to work until late night. She was frequently made to work ten (10) to twelve (12) hours each working day to complete her gargantuan tasks, which included supporting other departments and awaiting inputs from dependent colleagues and line managers (local and overseas with time zone difference) for tasks to be completed. The large volumes of tasks actually required more personnel and supporting staff but was deliberately denied to the Claimant. At times the Claimant had to work late hours at home too. In taking into account these facts, the Industrial Court held that the claimant was unfairly dismissed by her employer

3rd Element: The Employee Still Not Improve Although Was Given Sufficient Opportunity To Improve

The employer must produce a concrete evidence and/or objective evidence that the employee still not improve although was given sufficient opportunity to do so. BUT, WHETHER THE NON-COMPLETION OF TASK OR NONACHIEVEMENT OF TARGET OF PIP PER SE MEANS THAT THE EMPLOYEE IS POOR PERFORMER?

The answer is no. The non-completion of task and/or the nonachievement of target of the PIP per se does not necessarily means the employee is a poor performer.

In the case of LAI KOK SEAN v. INQPHARM SDN BHD [2019] 2 MELR 391, the Industrial Court has disagreed with the company’s submission that the claimant was considered as poor performer because he has failed to complete a tasks given under PIP. The court further held it was the intervening events that may make it impossible for the completion of the tasks and not because of the employee’s unsatisfactory performance. Similarly, in the case of FOONG KANG CHYE v. MEDICPLAS ENTERPRISE [2019] MELRU 374, the court held that the claimant’s non-achievement of sale target because of the problem with the Company’s marketing strategy does not make the claimant a poor performer.

The same principle was applied in the case of CEMANTECH SDN BHD V CIK LEE YEW LIN [1987] 1 MELR 626 where the Court decided that in the absent of the concrete evidence of poor performance, the Court was inclined with the evidence given by the Claimant in respect of non-achievement of some projects due to something that is beyond the claimant’s control in deciding the that the Claimant was unfairly dismissed by his employer.

Meaning to say, just because the employee was unable to complete the task and/or achieve the target assigned to him under PIP, it does not make the employee a poor performer because there could be could be reasons and intervening events that may make it impossible for the completion of the tasks and/or achievement of target.

These are the three(3) elements that are need to be proved by the employer to terminate to terminate its employee on the ground of poor performance BUT, WHAT THE EMPLOYEE CAN DO IF HE OR SHE DOES NOT AGREE THAT HE OR SHE HAS PERFORMANCE ISSUE?

If the employee does not agree with his or her employer’s allegation that he or she is having issue of poor performance, the employee shall give a notice preferably in writing to his or her employer asking for clarification and/or explanation of his or her performance issue as soon as he or she got the warning letter from his or her employer. If the employee still not satisfied with the explanation given by his employer, he or she may claim that he or she has been constructively dismissed by the employer provided that he or she must fulfilled the elements of constructive dismissal.


The employee excellent performance will give a powerful impact to the success of the company and vice versa. However, there will be time when an employee is unable to give his or her best probably because the tasks become tougher and tougher or maybe he or she encountered a problem which he or she never encountered before.

Therefore, it is very important to give the employee a chance to fix his or her performance with the company so that the employer and employee will have a good relationship. The purpose of PIP is to help the employee to improve and not a sign and/or an indicator that the employee will be terminated soon. As usual, “the best will stay” and to determine that, a fair assessment should be conducted and necessary guidance should be given.

If after all opportunity are being given, but the employee still not perform, it is not wrong for the company to terminate him or her on the ground of poor performance.

Prepared by:
Shazziera Safaruddin
Advocate & Solicitor
Tetuan Mua’z Aiman Halem Auzan & Associates