Wednesday, October 21, 2009


I was asked by one of my mentees, Ms Nor Zaleha, for caselaw which illustrates the relationship between lack of training and substandard performance. I hope the cases I have selected below shall be of some help to you, Zaleha.

In the case of Puncak Niaga (M) Sdn Bhd v Mohd Sulaiman Mohd Yahya [Award No. 282 of 2001] the claimant was employed by the Company as a General Manager. His probation period was six months.

During these six months, the claimant was not given any guidance or on-the-job training. After the initial six months had lapsed, the company extended the claimant’s probation period. Shortly afterwards, the company terminated the claimant’s services, alleging that upon review of his performance, conduct and character, he was found to be unfit for the post.

The company, however, failed to show evidence that they had ever conducted any performance appraisal of the claimant, or, throughout the course of the claimant’s employment, impressed upon the claimant that they were dissatisfied with his performance.

The Court concluded on the balance of probabilities, inter alia, that the company had failed to show that the claimant had been given a fair opportunity to improve on his alleged poor performance. The case was decided in favour of the claimant.

“Substandard” or “poor” performance, therefore, is a relatively subjective matter. A person may be qualified and competent for a particular job, but because of lack of proper direction and support from his employer, his true ability may not be able to shine through as he may not be clear as to what is expected of him. Mistakes can be made by anyone, especially in a new environment, where the working culture and procedures may be different from what the employee is used to in his or her previous job.

The type of training required for an employee to perform at optimal level also varies. “Training” associated with performance normally involve practical on-the-job guidance, where the employee is shown “the ropes” on how things are done, not so much skills-based. If the employee does not possess the basic skills required for the job he would not have been hired in the first place. The employee should be given time and chance to acclimatise to his or her new job.

In Rohimi Yusoff v Alfa Meli Marketing Sdn Bhd & Anor [2001], the applicant was employed by the Company as a Marketing Manager. Ten weeks later, his employment was terminated.

The Industrial Court was satisfied from the evidence that the termination was with just cause and excuse because it was based on the claimant’s inability to generate business for the Company.

The applicant applied for an order of certiorari to quash the award and an order of mandamus for a rehearing before another chairman of the Industrial Court.

The claimant was dismissed without any warning and was working with the company for ten weeks only. It was too early to say that the claimant had failed to generate business during that period.

The judge in this case made an observation of IE Project Sdn Bhd v Tan Lee Seng [Award no 56/198]:-

“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 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. It is for the employer to find out from the employee why he is performing unsatisfactorily or warn him that if he persists in doing so he may have to go. There is no record of any such warnings. On the contrary I am satisfied that the Claimant had performed his task to the best of his ability.”

Sidel Industry (M) Sdn Bhd v Thanusia Malar Raja Gopal [Award No. 8 of 2006] and Swai Lin v MRTS-Atlantik (M) Sdn Bhd [Award No. 688 of 2006] followed the principles of the Rohimi case.

Is poor performance, then, a form of misconduct?

In Eruthiam Arokiasamy v BM Enterprise Sdn Bhd [Award No 622 of 2006] it was held that:-

“A workman who does not show enough care or enthusiasm in his work but nonetheless plods on with the work does not necessarily commit misconduct.”

A single act of incompetency, however, does not warrant summary dismissal of the said employee. Employers need to show evidence on a balance of probabilities that the termination is justified on grounds of poor performance. Hence, proper written records of performance appraisals, training and counseling or warnings, of which must be acknowledged by both the employer and the employee, must be meticulously kept. Mere allegation is likely to be fatal to the employer’s case.

In Galaxy Portfolio Sdn Bhd v Suradi Sulaiman [Award No 158 of 2006]  it was held that the company failed to prove the allegations of poor performance against the claimant. Even if there had been such poor performance, there is no evidence that the company had ever informed the claimant, who is still on probation, of his shortcomings, or had given him any opportunity to improve himself. The Court in this case held that the dismissal was without just cause or excuse.

Since poor performance is not misconduct, it is therefore not necessary to conduct a domestic inquiry (D.I.) prior to dismissing an employee for poor performance.

In Wearne Brothers Services Sdn Bhd v Yuen Ah Man [Award 188 of 1982] the learned judge opined:-

“I am of the view that inefficiency is not misconduct, which necessitates an inquiry. The Company Secretary decided to terminate the services of the claimant based on the feedback form and appraisals by the managers.”

In Steven Ferenc Palos v Ogilvy One Worldwide Sdn Bhd & Anor [Award No. 2316 of 2005] it was held, inter alia, that the claimant had never been told that because of his areas of weaknesses, a dismissal of him was being considered. Also, the claimant was not given ample opportunity to discuss any possible work-related problems before he was terminated. The company also never gave him any written warnings.

However, there are caselaw in which failure to give employees warning may sometimes not automatically make the dismissal unfair.

In Bedford Investment Ltd v Northern Hotel [1990], a New Zealand case, it was held that:-

“…There can be cases where it is open to the Court to find that employment can be terminated without the giving of a formal warning, even where this might be for performance or other similar reasons…”

In Harmer v Cornelius [1858] it was enunciated that where an employee is hired for his skills and professional expertise, a certain implied standard is expected of them in the running of the day-to-day business. When he has demonstrated his incompetence the employer is not bound to retain him and would be justified in dismissing him without the requirement of warning.

Willes J opined:

“ ..(I)t seems very unreasonable that an employer should be compelled to go on employing a man who, having represented himself as competent, turns out to be incompetent.”

In Littlewoods Organisation Ltd v L. N. Egenti [1976] it was held that:

“..any professional man, a man of the employee’s talent, would, if he was brought to his notice that his work was not up to standard, and if he did not improve the standard of his work sufficiently, he might be faced with dismissal. That was plain common sense with a man of his caliber and a man of his intellectual position.”