"PIPs can be contentious, especially for senior employees. Ahmad’s case highlights stringent standards during probation, while CLP’s case emphasizes fair evaluations and procedural fairness for long-serving employees."
A Performance Improvement Plan (PIP) is an effective tool to ensure that the performance of employees is monitored concisely in areas where they are not performing well. However, some employees may view this as a death sentence, where PIPs are used by their employers as an “exit plan.” When it comes to whether there is a need to place senior employees on PIP, two cases illustrate different scenarios:
Ahmad bin Mohd Khairuddin v. Global Knowledge Network (M) Sdn Bhd [Award No. 171 of 2018 / KLIC 2(25)/4-613/14]
Facts: Ahmad, a Technical Consultant with significant experience, faced termination during his probation period due to performance issues. The company cited his failure to prepare for courses, pass required qualifications, and refusal to conduct scheduled courses.
Employee’s Argument: Ahmad contested the termination as unfair, arguing he was not familiar with the courses or qualified to teach them. He challenged the fairness of the company’s decision to dismiss him.
Court’s Findings: The court upheld the company’s prerogative to assess performance during the probation period. It acknowledged that senior employees are held to higher standards and have less leeway in terms of warnings compared to less experienced employees. The court found Ahmad's performance unsatisfactory and his refusal to teach courses as disobedience, justifying his dismissal.
CLP v. MIMS Medica Sdn. Bhd [Award No.: 870 of 2023]
Facts: The employee, a former Vice President, was accused of poor performance following a company acquisition. Despite his long service and prior achievements, he faced a PIP with seemingly unrealistic goals.
Employee’s Argument: The employee claimed the PIP targets were unreasonable and that the company had engaged in conduct designed to force him out, including offering a severance package and altering his reporting structure.
Court’s Findings: The court found the PIP was designed to fail and that the company did not provide evidence of genuine performance issues. The court criticized the company’s actions as mala fide and noted that the goals set in the PIP were vague and unreasonable. Evidence indicated that the employee’s performance was commendable, and he had been promoted and rewarded in the past.
Analysis
Nature of Employment:
Ahmad: Involves a probationary employee with higher performance expectations and fewer warnings.
CLP: Deals with a senior executive facing a PIP after a company takeover, with stricter standards of performance and fairness due to his long service and prior contributions.
Performance Evaluation:
Ahmad: The court accepted the company’s assessment during probation, justifying termination based on performance and refusal to fulfill duties.
CLP: The court rejected the company’s claims, finding the PIP unreasonable and indicative of a scheme to terminate the employee.
Procedural Fairness:
Ahmad: Considered within the context of probation, where the burden on the employer is lower.
CLP: Emphasized procedural fairness and the company’s motives, finding the PIP not conducted in good faith.
Employee’s Past Performance:
Ahmad: The court found Ahmad's prior experience did not mitigate immediate performance issues.
CLP: The court recognized the employee’s history of positive performance and promotions, contrasting with claims of poor performance under new management.
Conclusion
These cases illustrate different facets of employment law concerning performance and dismissal. Ahmad’s case highlights the stringent standards applied to probationary employees, while CLP’s case emphasizes the need for fair and reasonable performance evaluations, particularly for long-serving senior employees. These decisions underscore the importance of contextual fairness and the need for employers to substantiate performance-related claims with concrete evidence and to conduct assessments in good faith.
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