General article of dismissal for poor performance

Dismissal for Poor Performance

Employers can dismiss an employee for poor performance, but are reminded to be mindful of the features of Section 20 of the Industrial Relations Act 1967, i.e.: –

a) It gives the right to a former employee who “considers” that s/he was dismissed without just cause or excuse, to bring legal action for unlawful dismissal against his/her former employer. The key word is “considers”, i.e., the former employee can bring legal action as long as s/he subjectively considers him/herself to have been dismissed without just cause or excuse.

b) Although it is the former employee who sues for unlawful dismissal, it is the employer that must be able to demonstrate to the satisfaction of the Industrial Court that there was just cause or excuse in dismissing. This includes having to adduce the necessary evidence/documentation to prove its case.

Dismissal from employment due to poor performance may be successfully established if the employer is able to prove the following-

I) That there is sufficient objective evidence of poor performance. Mere reliance on the subjective view of the supervisor/superior/manager is insufficient.

II) The employee is warned about the gap between his/her performance and the company’s expectations. In that regard, it is useful to have a detailed job description;

III) The employee is provided with sufficient time and opportunity to improve. In terms of time frame, it should be between 3-6 months. In terms of opportunity to improve, it includes providing the necessary training, sending the employee for courses, providing one-on-one coaching, etc;

IV) Despite the time and opportunity afforded to the employee to improve, the level of performance remains not up to standard.

All the above must be documented. Failure to document the above will make the employer’s case that much more difficult to prove.

Poor Performance vs Misconduct

Additionally, misconduct and poor performance are different from each other. When a misconduct is committed, the corrective measure to be taken is in the form of a punishment, which may include summary dismissal, downgrading, or any other punishments (including warning, withholding of increment, suspension, etc), whereas for poor performance, the corrective measure taken is aimed towards improving the level of performance that hopefully will have a lasting effect.

In that regard, for poor performance, because it is not an intentional wrongdoing/misconduct on the part of the employee, there should always be a sequential, progressive corrective action taken before the ultimate decision to dismiss is undertaken. This includes the following steps

1) Informal discussion
2) Counselling
3) Verbal warning
4) Formal written warning
5) Punishments lesser than dismissal
6) Dismissal

Courts look for: –

Objective evidence.

This is absolutely crucial. While the supervisor/superior/manager can be asked to appear as a witness for the company to provide his/her opinion on the poor performance of the employee, courts have stated that their statements will NOT HAVE MUCH VALUE UNLESS IT IS SUPPORTED WITH OBJECTIVE EVIDENCE. The company must therefore be able to demonstrate and adduce objective evidence of actual incompetency.

Standard of Skill

The standard of skill to be expected of an employee is that the employee is competent to do the job he is employed to do, and no more than that

Employers cannot expect their employees to be a multi-tasking Superman.

Eg let us consider the example of a sport- football/soccer. A goalkeeper is expected to do no more than a goalkeeping function, to remain at goal and to try to prevent the opposition team from scoring goals, NO MORE THAN THAT. One cannot expect the goalkeeper to play the role of a defender/midfielder/forward, or to score goals for the team. The courts have succinctly stated that

“..the true rule is that the employee must exhibit just that much skill and no more than that he has warranted he had. If he has proclaimed that he is an expert, he must exhibit expertise. If he boasts that he is a genius, his work must be brilliant. But the presumption is against any implied warranty of extraordinary talent.

Other factors

– the company has carried out sequential, progressive corrective action (as set out above) before the ultimate decision to dismiss was undertaken;

– the company has not been inconsistent with its treatment of the employee;

– the company did not victimize the employee;

– the company has not set unrealistic targets for the employee;

– the company acted in good faith at all times;

Period for evaluation of performance– if the company states that it will give the employee XXX months, then the full benefit of the XXX months should be given. If the company lacks the patience and say, dismisses the employee after 2 months despite informing the employee that his performance will be monitored for 6 months, the courts may hold the dismissal to be unfair.

– For probationers, the law relating to poor performance is less stringent. It was held in a case that monthly assessment reviews that are communicated to the employee are sufficient, but it is my opinion that it is still safer to err on the safe side and ensure that it is properly documented. Note that the FULL probation period must be given to the employee. This is after all already agreed in the terms and conditions of employment that the probation period is for XXX months. If there is insufficient documentation to properly justify the termination due to poor performance, the probation period should be extended so that the company ensures that the documentation is in place.

– Dismissal for poor performance must be effected in accordance with the full notice period as stated in the employment contract. This is not a serious misconduct in which an employee can be summarily dismissed by providing a 24-hour notice.


Employers are reminded to ensure that the above steps are taken before dismissal is carried out. My suggestion to employers is that before a dismissal due to poor performance is carried out, take some time to consider and think. Be objective and honest about the strength of the evidence that you have. As an employer, you need to adduce sufficient evidence to the satisfaction of the Industrial Court. Ask yourself if you believe that the evidence is sufficient to prove that the employee is a poor performer- once you do so, you may already have an inkling of what is likely to be the Industrial Court’s stance on this. Additionally, obtain the services of a specialist in Malaysian employment law to ensure compliance to the laws/procedure and to minimize legal risk(s). That will go some way in determining your next course of action.

Legal Disclaimer

The articles posted are for general information purposes only and should not be construed as legal advice. Facts and circumstances differ from case-to-case. Please consult your lawyer for specific legal advice and action to be taken.
This article is brought to you by Justin Lee and is copyrighted accordingly. Justin is an employment law specialist who can advise, draft and train your human resource managers.