Performance Improvement Plan - Mdm Rajeswari

Integrity, Reliance & Relationship
Rajeswari Karupiah & Co.
PERFORMANCE IMPROVEMENT
PLAN – LEGAL PERSPECTIVE

Termination Process for Under
Performance
• Case Reference: Karen Liew Pui Leng
v. LYL Capital Sdn. Bhd. [2013] 4 ILR
571:
The Industrial Court held that the performance by its nature
is subjective and the best person to judge an
employee's performance should and must be the
employer.

Court’s View of Underperformance
• Case Reference: IE Project Sdn. Bhd. v. Tan Lee
Seng (Award No.56 of 1987 ) - Leading Authority
"An employer should be very slow to dismiss upon the ground
that the employee is found to be unsatisfactory in
his performance or incapable of performing the work which he
is employed to do without first telling the employee of the
respects in which he is failing to do his job adequately,
warning him of the possibility or likelihood of dismissal on this
ground and giving him opportunity of improving
his performance. It is for the employer to find out from the
employee why is he performing unsatisfactorily and to warn
him that if he persists in doing so he may have to go.

Court’s View of Under Performance
• Case Reference: IE Project Sdn. Bhd. v. Tan Lee
Seng (Award No.56 of 1987 ) - Leading Authority
“An employer owes his employee the duty to be scrupulous in
following the fair procedure which has gradually evolved out
of adjudication before the industrial tribunals both locally and
in other jurisdictions. If having done all that may reasonably
be expected of him, an employer is nevertheless constrained
to terminate the service on a non-performing employee who
persists in failing to render satisfactory service to his
employer, it will not (except in the case of a patently perverse
decision) be the office of the Industrial Court to interfere with
such decision which had been fairly arrived at."

Termination Process for Under
Performance
Case Reference: Sime Darby Bhd. v. Mathi Arasu [1991] 2
ILR 836,
• "An employer should be very slow to dismiss an employee upon
the ground that he is incapable of performing work which he is
employed to do without first telling the employee of the respects in
which he is failing to do his job adequately, warning him of the
possibility or likelihood of dismissal on this ground and giving him an
opportunity of improving his performance.
• Thus it is clear that in order to justify the dismissal, the company has
to establish three things.
– Firstly that the claimant was warned about his
unsatisfactory performance,
– secondly that the claimant was accorded sufficient opportunity to
improve and
– thirdly, notwithstanding the above, the claimant failed to
sufficiently improve his performance."

Termination Process
Case Reference: Esso Malaysia Bhd. v. Gan Eng Teong
[1994] 2 ILR 109
• "The facts show that the Company was slow in dismissing the
Claimant for his poor performance. It was done only after the
Claimant had been informed of his weaknesses and given
time to improve. The appraisal reports were discussed with
the Claimant and he had agreed with the observations made
by the reviewer, though not with the rating.
• The Claimant was also given advice and support to improve
his performance. But none of these measure appeared to
have worked and 2001, the Company was still not satisfied
with the Claimant's performance. In such a situation, the
Company felt that they could not retain the Claimant any
longer and as such was entitled to dismiss him."

Burden of Proof
Case Reference: Ireka Construction Berhad
v. Chantiravathan Subramaniam James
[1995] 2 ILR 11
• It is a basic principle of industrial law jurisprudence that in dismissal
case the employer must produce convincing evidence that the
workman committed the offence or offences the workman is alleged to
have committed for which he has been dismissed.
•
• The burden of proof lies on the employer to prove that he has just
cause or excuse for taking the decision to impose the disciplinary
measures of dismissal upon the employees. The just cause must be
either a misconduct, negligence or poor performance based on the
facts of the case.“
Document…Document…Document….

From PIP to Insubordination
Case Reference: Geraldine Nathen & Siemens
Malaysia: Award No 774 of 2016
• Claimant left on the COW-3's (her Boss) desk clearly shows that the
Claimant refused to accept the PIP. The Claimant at the second last
paragraph of the note states as follows: "Please give it importance as it
has been given enough importance by some of our team members to
constitute a complaint to HR whereby I have been penalized with a non-
increment and a PIP which I see as unnecessary, demoralising and
a "dent" in my career path. Therefore kindly request HR to retract
the PIP template presented yesterday.“
• Court held: As an employer, the Company was entitled to place its
employees on the PIP in order to monitor their performance. The
Company's requirement for the Claimant to sign the PIP and submit the
same was a lawful order.

Insubordination
Case Reference: Faizal Abdul Rahman vs. BASF
Petronas Chemicals (Award 975 of 2010)
• Employee fails to turn up for Performance Review and Goal
Setting.
• Court held that employee’s conduct warrants dismissal.

Case Study Review
Employer Wins
• Transparent Process
• Clear Communication as to
Employer Expectation
• Express Warnings
• Sufficient Time to Improve
• Counseling on the Job
• Still No Improvement
• Keeping Record of the Above
(Get Employee to Sign-Off PIP
Reviews)
• Termination is for Under
Performance
Employee Wins
• No Process Implemented to
Handle Poor Performance
• Improper Documentation
• No Express Warning Issued
• Insufficient Time Accorded to
Improve
• Mala Fide or Ulterior Motive

Court’s View: Key Factors in Under
Performance
• PIP not in place to monitor performance.
• Employee refuses to accept PIP.
• Employee does not acknowledge Review of Performance.
• Employer not consistent in carrying out performance
reviews for e.g.
• Too long gaps between the reviews.
• Immediate superior/job counselor changed mid-way
• Improvements not recognized in PIP.
• Salary raise granted despite underperformance.
• Bonus (non-contractual) paid despite underperformance.

Thank You All

Performance Improvement Plan - Mdm Rajeswari

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