Can a supervisor who has worked with an employee for six weeks fairly evaluate performance?
The Industrial Court of Malaysia recently dealt with a case involving a probationary employee who was dismissed for allegedly failing to meet performance standards during his probation period.
The worker argued that he was unfairly dismissed without proper evaluation procedures and was denied contractual entitlements, while the company maintained that his poor performance justified the termination.
The worker's case centred on several key arguments: he was never given formal warnings about his performance, the appraisal process was conducted by a supervisor who had only overseen him for six weeks, the termination letter was improperly backdated, and he was denied his contractual travelling allowance during the Movement Control Order period.
Employment terms and probation period
The worker commenced employment with the company on 2 March 2020 as an enrolment and business development manager with a monthly remuneration of RM5,700, comprising a basic salary of RM5,500 and a fixed traveling allowance of RM200.
His appointment was subject to successful completion of a probationary period of one full semester from the date of commencement, which the company reserved the right to extend depending on performance. The worker was required to report directly to the president and chief executive officer.
A confirmation period was set for one full semester, which was roughly four months as the college operated on a three-semester per year system.
The worker's employment began just as Malaysia implemented the Movement Control Order in March 2020, which significantly affected business operations and travel requirements.
The company subsequently excluded the fixed travelling allowance of RM200, arguing it was only applicable for business-related travel, which had ceased during that period.
The worker disputed this exclusion, maintaining that the travelling allowance was expressly included in his remuneration package in the appointment letter and was fixed and contractual in nature.
This disagreement over the allowance would later become one of several contentious issues in the dismissal proceedings, alongside questions about performance evaluation and procedural fairness.
Performance feedback and evaluation process
According to the company, throughout the worker's tenure from 2 March 2020 until 5 January 2021, he failed to perform the core duties and responsibilities of his position.
The company contended that the worker failed to achieve mutually agreed key performance indicators, demonstrating unsatisfactory performance.
They claimed that during the work-from-home directive in force from 1 April 2020 until 3 May 2020, the worker did little substantive work and was unable to produce expected output or deliverables.
The company relied on email correspondence to substantiate its claims of poor performance.
These emails included feedback dated 16 April 2020 stating that statistics were insufficient and practical solutions were required to improve enrolment, feedback on 14 May 2020 noting that reporting lacked analysis on the causal link between marketing spend and enrolment yield, and correspondence on 23 June 2020 directing the worker to prepare a holistic marketing plan with a budget instead of presenting fragmented tasks.
Additional emails from 29 June 2020 described his marketing plan as vague and lacking specific strategies, while feedback from 13 July 2020 described his communication as argumentative and highlighted limited knowledge of higher education marketing.
The worker, however, maintained that he was never given formal warnings about his performance.
He stated that on 5 November 2020, he was verbally informed by the assistant manager of operations that his employment would likely be terminated.
On the same day, he was handed a pre-filled appraisal form containing low scores by the registrar, who had only recently joined the company in August 2020 and with whom the worker had minimal working interaction.
The worker only started reporting to the registrar on 28 September 2020, giving them barely six weeks of working relationship before the appraisal.
Termination process and backdating issues
According to records (case no. 5/4-387/22), on the evening of 5 November 2020, at approximately 5.00 pm, the company arranged for a review session with the registrar, scheduled for 10.00 am the following morning, 6 November 2020, via video conference.
The assistant manager of operations was also in attendance. During the session, the worker was merely informed that he would be updated on the next steps after consultation with the chief executive officer, and no confirmation of any decision was conveyed to him.
The worker was requested to sign the appraisal form, but did so only to acknowledge receipt of the document, expressly without agreeing to its contents.
On 10 November 2020, the worker was directly informed by the president and chief executive officer to vacate his employment by early December 2020, without any compensation.
The worker objected to such unilateral treatment and expressly referred to the two months' notice provision contained in his appointment letter.
Subsequently, the worker was served with a termination letter dated 9 November 2020 entitled "Non-Confirmation and Cessation of Employment," which sought to retroactively effect cessation of employment from 6 November 2020 while stipulating that his last working day would be on 5 January 2021.
The company maintained that the worker's probationary appraisal was conducted and concluded on 6 November 2020, and that he was informed verbally that his non-confirmation automatically led to cessation of employment with a notice period of two months, effective from 6 November 2020.
The company claimed the worker verbally acknowledged and accepted this decision during the appraisal meeting.
However, as the worker submitted the necessary documents only after working hours on 6 November 2020, the issuance of the official letter was delayed until the next working day.
Legal framework and burden of proof
The Industrial Court's function in dismissal cases is confined to two issues: whether there has been a dismissal and whether such dismissal was with or without just cause or excuse.
As established in Wong Yuen Hock v. Syarikat Hong Leong Assurance, the court's "main and only function" is to decide whether the grounds advanced by the employer were in fact committed by the worker and whether they constitute just cause or excuse.
The burden of proof rests on the employer to justify the dismissal. As emphasised in Stamford Executive Centre v. Dharsini Ganeson: "In a dismissal case the employer must produce convincing evidence that the workman committed the offence or offences the workman is alleged to have committed for which he has been dismissed. The burden of proof lies on the employer."
This principle applies equally to probationers, who enjoy statutory protection under employment law.
The Court of Appeal held in Khaliah Abbas v Pesaka Capital Corp that "a probationer enjoys the same statutory protection under section 20 of Act 177 as a confirmed employee. His services cannot be terminated arbitrarily or capriciously, but only upon proof of unsatisfactory performance, misconduct, or other just cause."
In cases of alleged poor performance, the evidential burden lies squarely on the employer to establish, by cogent and credible evidence, the nature of the poor performance complained of.
Court analysis and evidentiary failures
The court found the company's evidence gravely deficient. The company sought to rely on certain email correspondence and the testimony of a single witness who did not personally conduct the worker's appraisal on 6 November 2020.
Crucially, the documents said to record the worker's appraisal and the emails allegedly notifying him of the assessment and termination were not tendered during the proceedings. Instead, these documents surfaced belatedly at the stage of written submissions.
The court noted that "submissions, however persuasively framed, do not constitute evidence, and documents annexed thereto cannot be relied upon unless duly produced and admitted as exhibits during trial."
The company's failure to tender these records at the appropriate stage deprived the court of any contemporaneous documentary basis to support its version of events.
Moreover, the court noted with concern that "the appraisal was conducted by the Registrar who had been assigned to supervise the [worker] for barely six weeks prior to the appraisal, thereby undermining both the reliability and fairness of the evaluation process."
Equally significant was the absence of witnesses directly involved in the worker's appraisal or termination process.
The company did not call any officer or superior who could testify as to the manner in which the assessment was carried out or the reasons underlying the worker's dismissal.
Regarding the emails cited as evidence of poor performance, the court observed that they amounted to "routine supervisory feedback and ordinary guidance, which are to be expected in any probationary relationship. The mere fact that an employee is asked to refine or improve work does not necessarily translate into incompetence."
Procedural irregularities and contract breaches
The court found the termination letter's backdating to be "irregular, procedurally unfair, and legally untenable. A termination of employment must be clear, prospective, and unequivocal. Any attempt to backdate will deprive the employee of certainty regarding his status."
The court accepted the worker's contention that the backdating was in direct breach of his appointment letter, which expressly provided that a probationer's employment may only be terminated with two months' notice or payment in lieu thereof.
The court stated: "By backdating the cessation of employment to 6 November 2020, the Company unlawfully reduced the [worker]'s contractual entitlement and denied him the benefit of the notice period. This constitutes not only a breach of contract but also a disregard of the duty of good faith and fair dealing in the exercise of managerial prerogative."
The procedural irregularity demonstrated a broader pattern of unfairness in how the termination was handled.
Regarding the travelling allowance, the court found the company's justification untenable, stating:
"The allowance was fixed and contractual in nature and further this is also reflected in the salary slip. It was not expressed as conditional on travel, nor did the Company produce any contemporaneous document showing otherwise. The unilateral withholding of this allowance was arbitrary, unilateral, and without lawful basis."
These contractual breaches further undermined the company's position.
Final determination and compensation award
The court concluded that "the Company has failed to discharge its burden of proving, on a balance of probabilities, that the [worker]'s probationary performance was unsatisfactory to the extent of warranting dismissal."
The reliance on untendered documents and the absence of witnesses directly involved in the appraisal process fatally undermined the company's case. The court held that "the dismissal was not only procedurally defective but also substantively unjust, amounting to a serious abuse of managerial prerogative."
However, the court acknowledged that the worker's conduct contributed to some extent to the employment breakdown.
The court noted: "Although these concerns were not formalised into a proper appraisal process, they nevertheless reflect shortcomings which contributed to the erosion of confidence in the employment relationship."
This contributory conduct would be taken into account when determining the appropriate remedy to ensure fairness to both parties.
The court found that reinstatement was not appropriate for a probationer, as "a probationer holds no lien to the appointment."
Instead, the court awarded backwages for ten months, the period until the worker secured alternative employment, with a 30% reduction for contributory conduct.
The final order stated: "The Court orders that the Company pays the [worker] the total sum of Ringgit Malaysia Thirty Nine Thousand Nine Hundred (RM39,900.00) less any statutory deductions within thirty (30) days from the date that this Award is communicated to the parties."
This amount represented RM5,700 multiplied by ten months (RM57,000), less 30% for contributory conduct (RM17,100), resulting in RM39,900.
