NG CHIN HAN
Employees are the cornerstone of any company. Therefore, every great leader knows that the key to a long-lasting and successful company is to have a team which consist of exceptional people. Accordingly, it is not surprising that most, if not all the leaders emphasized on the importance of hiring the right person for the company in ensuring the continued success of the company.
Nonetheless, despite the extensive interview process conducted by most companies, it is inevitable that every company will at some point hire a wrong person. In such circumstance, it is for the company to make the difficult choice of dealing with the employee who is not quite good enough for the company and decide whether to dismiss such employee or to retain them. The question here is, what should a company do or could do in managing an employee who is not performing satisfactorily?
The Principle of Law with regard to the Dismissal of Employee on Grounds of Poor Work Performance
Before we answer the above question, we believe it is best to first understand the legal position with regard to the dismissal of an employee on grounds of poor performance. Generally, a company could dismiss an employee on grounds of poor performance. However, there are several conditions that a company needs to fulfil before they could dismiss an employee for poor performance.
In the case IE Project Sdn Bhd v Tan Lee Seng  1 ILR 165, the Industrial Court had laid down several conditions which must be fulfilled by the company before an employee can be dismissed with just cause or excuse as follows: –
- The employee has been given sufficient notice or warning about his poor performance [which preferably includes the possibility of a dismissal];
- The employee has been given reasonable opportunity or reasonable time to improve his work performance; and
- Despite the sufficient notice and reasonable opportunity, the employee failed to improve his work performance.
Sufficient Notice or Warning Given to The Employee
The difficulty when it comes to assessing an employee’s performance is that every company will have different assessment and different standard. Therefore, it is only fair and reasonable for the company to bring their dissatisfaction to the attention of the employee if the employee is not performing satisfactorily. This is also to enable the employee to be aware of the level of his work performance, which may need immediate improvement and to provide the employee with the opportunity to improve his work performance.
Based on the above, it is pertinent for the warning to specifically contain the standard of performance required by the company, the weakness or shortcoming of the employee, the company’s dissatisfaction, a reasonable goal for the employee to achieve within reasonable time and the reasonable time before a reassessment by the company.
Reasonable Opportunity or Reasonable Time Given to The Employee to Improve
As stated above, the warning given to the employee should contain a reasonable time frame for the employee to improve his work performance. It is pertinent for the company to provide a reasonable time frame based on the areas of work and the standard of work performance required by the company.
In addition, it would be good practice for the company to also provide opportunities and assistance to the employee in order to improve his standard of work performance through appraisal, training, coaching, and advice.
The Employee Failed to Improve
It is only if the employee still fails to improve his standard of work performance despite the warning and the opportunity given by a company to the employee that a company should consider dismissing the employee on grounds of poor work performance.
However, it is important to bear in mind that the burden lies with the company to establish the fact that the dismissal of an employee for poor performance is grounded on just cause in the event the employee decides to bring a legal action for unfair dismissal against the company. Therefore, it is prudent for a company to ensure the dismissal process is done in an impartial and objective manner and supported by documentary evidence [although it is not mandatory] before dismissing an employee.
Exception to the General Rule
The only exception to the general rule stated above is when an employee is employed for his skill or professionalism and such employee is reasonably expected to know the standard of performance required by the company. In such circumstance, a company may dismiss such employee without providing any warning if such employee is incompetent or does not possess the skill which he was hired for. Nonetheless, every company should be cautious before dismissing an employee without any warning and only do so in an exceptional circumstance.
Dismissal Without Just Cause or Excuse
An aggrieved employee who has been dismissed from employment may bring an action against the company for dismissal without just cause or excuse. A dismissal on grounds of poor work performance will be deemed unfair if the above conditions are not fulfilled by the company. As such, if the Court finds that the employee was dismissed without just cause or excuse, the Court may order the Company to pay back wages to the aggrieved employee and to reinstated the aggrieved employee or provide compensation to the aggrieved employee in lieu of reinstatement. Therefore, the company will suffer financial and business risks if the dismissal of an employee was proven to be without just cause or excuse.
Coming back to the question of what a company should do or could do in managing an employee who is not performing satisfactorily, after considering the position of the law with regard to the dismissal of an employee on grounds of poor work performance, it is recommended for every company to continuously monitor the performance of their employee. And every company should take immediate steps in addressing, assisting and improving the performance of their employee when an employee is not performing on a satisfactory level. Lastly, an employee should only be dismissed when all attempts, assistance and/or opportunity provided by the company proven to be futile to avoid any financial or business risks.