This article discusses the case of Siti Hajar Binti Jamaludin (“Claimant”)  v Celcom Axiata (M) Berhad (“Company”) [2020] 2 LNS 0452  wherein the Claimant brought a case of unfair dismissal against the Company after she was terminated on the ground of poor performance.

The Industrial Court, upon evaluation of all evidence, held that the Company was able to prove poor performance and therefore the dismissal was with just cause or excuse. The Claimant’s case was thereby dismissed.

Material Facts

The Company terminated the Claimant’s employment contract after 18 years of employment. The Company gave her one-week notice and paid her three months’ salary in lieu of termination of notice. The reason for termination was poor performance.

The Company claimed that the Claimant had failed to perform to the expected standard as measured by her key performance index set early in the year. Her overall performance was rated 2 out of 5, which meant that she had to be enrolled in the Company’s Performance Improvement Plan (PIP).

Unfortunately, despite being in the PIP for five months, the Claimant still failed to achieve the expected performance. This was despite her receiving guidance and mentoring from the Company throughout the PIP. Thus, the Company decided to dismiss her at the end of her PIP.

On the other hand, the Claimant claimed that her dismissal was unfair and alleged that she should not be enrolled in the PIP in the first place, as the rating of her performance was actually 3 out of 5, and PIP was only for those who got rated 2 and below.

The Claimant further denied that a review was carried out before she was enrolled into the PIP and after she was in the PIP for 3 months, she was only informed verbally of an extension of 2 months verbally and without a proper process. She also alleged that the Company had failed to notify her of her PIP result and there was no assessment of her work performance throughout the 5 months. Overall she claimed that the Company had acted unfairly and arbitrarily against her.

Findings of The Court

The Court found the following based on the evidence presented:

1. The Claimant had been listed on the PIP 3 times throughout the 18 years of her employment, therefore she should be familiar with the Company’s policies on poor performance and the implications of being put into a PIP.

2. The Claimant should also be familiar with the Company’s performance evaluation system and its function in setting Key Performance Index and tracking her performance according to the KPI. Therefore, the Claimant was clear about what was expected of her by the Company.

3. The Claimant was fully aware that she did not perform according to the standard expected of her. This is because contrary to her allegation, there was evidence that showed that the Claimant was informed of her 2 out of 5 rating, and the Claimant did not dispute the rating then.

4. Further, the Company had warned and given the Claimant plenty opportunities to improve. For example, the Claimant had undergone 2 PIP before the final one, and even for the final PIP, after the Claimant attended for 3 months and failed to achieve the targets set, the Company did not dismiss her immediately but extended the PIP for a further two months to give the Claimant further opportunities to improve and avoid dismissal. It was only after all these opportunities and yet the Claimant failed to improve that the Company decided to terminate her.

5. The Claimant’s claim that she should not have been put in the PIP in the first place was also rejected. The Company’s witnesses explained that all evaluations of employees were subject to further “calibration” by higher management. Therefore, it was not the sole review or decision of the Claimant’s immediate supervisor; the higher management has reviewed the Claimant’s rating and only confirmed that she should be rated as 2. The rating was therefore not arbitrary or unfair.

6. Furthermore, there was also an appeal process available to the Claimant, but the Claimant did not utilize at the material time. In fact, when the Claimant was placed into the PIP, the Claimant did not protest at the material time. Her complaint in Court that she should not have been put into the PIP appeared to be an afterthought.

7. Given the above, there was sufficient evidence to support that the Claimant was rightly put into the PIP, and the subsequent dismissal on the basis of poor performance.

8. The Court reminded parties that a company is a profit-making entity in which efficiency and productivity of the employees are important. Therefore, a company should be entitled to dismiss an employee that has been proven to be a poor performer, especially after numerous opportunities were given to the employee to improve.

For these reasons, the Court found the dismissal by the Company to be with just cause or excuse and dismissed the Claimant’s complaint.

Advice to Employers:

1. Employers are advised to have a transparent and objective performance evaluation system in evaluating their employees. This can be aided by the various human resources software now available in the market.

2. By having a proper system, as opposed to just using an informal/casual evaluation process, Employers can ensure they are able to sustain any challenge of bias or arbitrariness.

3. Any evaluation system should have a check and balance process and an appeal process. This will avoid any possibility of partiality or victimisation.

4. Employers are also encouraged to meet up with employees at the beginning of the year to explain and/or agree with their employees on the expected targets for the year. If this is done, the employees cannot then claim that they were unaware of their targets or try to find excuses for their poor performance.

5. Lastly, Employers must always give sufficient opportunities to poor-performing employees to improve, such as through PIPs, mentorship, and consultation, before terminating said employees. This is because many employees just need some guidance before they can perform at their best again and this would also shield employers from any unfair dismissal claim like in this case.

Louis Liaw successfully acted for the Company in this case. The complete grounds of judgment can be read here.

Written with the assistance of my able interns, Connie and Zhi Ying.