Our Employment & Industrial Relations Partner, Wong Keat Ching together with our Legal Associate, Ameerah Nasri successfully represented Petroliam Nasional Berhad (“PETRONAS”) before the Industrial Court in Syed Mohd Azinuddin bin Syed Azmi v Petroliam Nasional Berhad (Award No. 667 of 2026), where the Court upheld the dismissal of an employee for poor performance. The Industrial Court found that PETRONAS had acted with just cause and excuse after undertaking a comprehensive performance management process, which included repeated warnings, two Performance Improvement Plans, and extensive mentoring and coaching over nearly two years.
Brief Facts
The Claimant, an Executive since 2007, received sustained low performance ratings (rated as “3L”) over several years and was subsequently offered a voluntary separation option, which he declined.
Due to his stagnant performance, the Company placed the Claimant under a Performance Improvement Plan (“PIP”) in 2020. Despite undergoing the First PIP, the Claimant failed to demonstrate sufficient improvement and again received a “3L” rating in 2020. Consequently, the Company placed him under a Second PIP from June 2021 to November 2021.
A notable detail in this case was the Claimant’s own agency: he had specifically requested a full-time assignment for a particular project (“the Project”). The Company granted this request, providing him with a platform to prove his mettle. Throughout this period, the Company provided a robust support ecosystem, including mentoring and coaching sessions, additional technical support, and monthly reviews. Yet, as the project reached its critical phases, the Claimant’s deliverables remained in a state of perpetual “revision”, missing the very milestones he had helped set.
Following the conclusion of the Second PIP, the Company determined that the Claimant had failed to meet the required performance standards. His employment was subsequently terminated on 16 March 2022 due to poor performance, leading to the industrial dispute before the Industrial Court.
The key issues before the Industrial Court were whether the Company had successfully established the Claimant’s poor performance bona fide, and whether the dismissal was with just cause and excuse.
Industrial Court’s Decision
Whether the Claimant Was Aware of His Poor Performance and Properly Warned
The Claimant attempted to paint the performance ratings as unfair, relying on his own “self-ratings” in his Employee Performance Management (EPM) forms to suggest he had met expectations.
The Court, however, looked to the final ratings decided by the People Development Committee (PDC). It held that the Claimant was fully aware of the “3L” rating’s significance – admitting under cross-examination that he knew it was among the lowest ratings and a precursor to potential termination. The Court found it telling that the Claimant never lodged any grievance or complaint regarding his low performance ratings over several years. Consequently, his challenge to those ratings after his dismissal was viewed by the Court as a belated afterthought.
The Court further accepted that the Company had repeatedly warned the Claimant that failure to demonstrate significant improvement during the Second PIP could lead to the termination of his employment. Accordingly, the Court held that the Company had satisfied the requirement of warning the employee regarding his poor performance before dismissal.
Whether the Claimant Was Given Sufficient Opportunity to Improve
The Claimant contended that the expectations imposed on him during the PIP process were unreasonable, particularly as the Second PIP coincided with the COVID-19 pandemic and the Movement Control Order (MCO).
The Court rejected this excuse. As PETRONAS was an “essential service”, operations continued, and the Court found that the pandemic did not hinder the Claimant from achieving his KPIs. The Company had provided a generous runway for improvement – spanning approximately 23 months since the First PIP began.
The PIP carried out was not a perfunctory exercise; the Company had even deployed additional Technical Professionals and Commissioning Engineers to assist the Claimant, effectively surrounding him with the resources needed to succeed. Significantly, the Claimant had conceded to being given sufficient support to achieve the targets and KPIs under the Second PIP during cross-examination.
The Court was therefore satisfied that the Claimant had been given sufficient opportunity, time, assistance, and guidance to improve his performance prior to the termination of his employment.
Whether the Claimant Ultimately Failed to Improve His Performance
The Claimant argued that the success of the Project, which achieved its “1st drop” milestone in December 2021, was a testament to his performance.
The Court looked past the project’s success to the Claimant’s specific contributions. It accepted evidence that the Project milestones were achieved because the Company deployed additional management and technical support to perform the tasks the Claimant had failed to deliver. Ultimately, the Court concluded that the Company had successfully established the Claimant’s poor performance in accordance with the principles laid down in Ireka Construction Berhad v Chantiravathan a/l Subramaniam James.
Dismissal Was With Just Cause and Excuse
Having found that the Company had established the Claimant’s poor performance, the Industrial Court further held that the dismissal was with just cause and excuse. The Court was satisfied that the Company had acted bona fide and had exercised its management prerogative properly after providing the Claimant with repeated warnings, extensive support, reasonable opportunities to improve, and a structured performance management process over a prolonged period.
The Court emphasized that an employer is the best judge of its own standards. Once a Company has proven a consistent course of unsatisfactory performance and provided a fair opportunity for improvement, it is justified in terminating an employee who fails to measure up.
Key Takeaways
This award underscores how a structured, well-documented performance management process serves as an employer’s strongest shield. Contemporaneous records, i.e. the Monthly Performance Records (MPRs), coaching notes, and documented management interventions were the bedrock of the Company’s case.
Ultimately, while the law protects employees from arbitrary dismissal, it does not require an employer to indefinitely subsidize underperformance. When a fair opportunity is provided and the necessary support is deployed, the responsibility to bridge the performance gap shifts to the employee. In this instance, the paper trail told a story of a Company that went the distance, and an employee who, despite the support, remained at the starting line.
For further information, please contact:
Wong Keat Ching, Partner, ZUL RAFIQUE & partners
keat_ching@zulrafique.com.my
