She Passed Her PIP And Got Fired Anyway. The Industrial Court Awarded Her RM1,036,640.

Tung Yoke Leng joined Maxis in 1996. Twenty-five years later, after being seconded to the audit department — a field she had no prior experience in — she was rated as falling short at three reviews and placed on a Performance Improvement Plan.

She was given support staff who, the Court later found, had no experience. She had to coach and guide them herself. The KPI criteria snowballed from one review into the next, which she flagged to the company by email more than once.

Then, at the fourth review, the company found she had met all her PIP goals.

They terminated her anyway, on 1 September 2021.

Industrial Court chairman S Vanithamany found the dismissal was without just cause or excuse: Tung had received no warning before being placed on the PIP, was never cautioned that her service might be terminated for poor performance, was not warned of the consequences of the enhanced PIP, and — despite the company stating the whole process would be documented — the company could not produce evidence of the coaching and guidance it claimed to have given.

The award: RM416,640 in back wages (after a 30% deduction for post-dismissal earnings) plus RM620,000 compensation in lieu of reinstatement. Total: RM1,036,640.

1. The test, and where it comes from

The foundational statement is in IE Project Sdn Bhd v Tan Lee Seng [1987] 1 ILR 165 (Award No. 56 of 1987), quoted and re-applied ever since, including by the High Court in later decisions:

An employer should be very slow to dismiss on the ground that the employee is unsatisfactory in performance or incapable of doing the work, without first telling the employee the respects in which he is failing to do the job adequately, warning him of the possibility or likelihood of dismissal on this ground, and giving him an opportunity of improving his performance.

Three elements, all required:

The employer's other burden: it must actually prove the poor performance. Asserting it is not enough. The Court has said an employer is the best judge of its own standards — but that deference applies once the employer has proven a consistent course of unsatisfactory performance, not before.

2. Poor performance is not misconduct, and the difference matters

This is the conceptual error underneath most botched performance dismissals.

Why employers get this wrong: it is administratively easier to run a disciplinary process than a genuine improvement process. So a struggling performer gets charged with something — negligence, dereliction of duty — and put through a DI. The Industrial Court can see through that, and characterising a capability problem as misconduct invites a finding that the stated reason was not the true reason.

A related trap on domestic inquiries, for employees. Do not assume a favourable DI finding ends the matter. In Mohd Dzulkarnain Bin Shaharud-Din v TM Technology Services Sdn Bhd (Award No. 245 of 2026), the Industrial Court reaffirmed that an employer is not bound by a domestic inquiry panel's findings even where the panel found the employee not guilty — the DI is a fact-finding mechanism, not a final adjudication. The dismissal must still be fair overall, but "the panel cleared me" is not the end of the argument.

3. What a legally adequate PIP looks like

Drawing from the cases where employers won and lost:

A PIP that will survive scrutiny:

• Preceded by a warning. The employee should already know their performance is a problem before the PIP lands. In Maxis, the absence of any prior warning was a central finding.
• Objective, measurable standards, communicated clearly and in writing.
• A defined timeline — a real period, not an arbitrary few weeks.
• Achievable targets that do not snowball. In Maxis, unresolved items were carried forward and piled up across reviews, making them impossible to complete.
• Genuine support — coaching, training, competent resources. In Maxis, the assigned support staff were inexperienced and the claimant had to coach them herself, on top of her own targets.
• Documented support, not just promised. Maxis stated the process would be documented and then could not produce evidence of the coaching it claimed to have provided.
• An express written warning that failure to improve may result in termination.
• Honest reviews, where a pass is treated as a pass.

A PIP that will fail:

• Issued cold, with no prior performance conversation or warning
• Targets set at a level nobody could meet in the time given
• No real support, or support that creates extra work
• Extended unilaterally without justification — one court found a unilateral extension was done in bad faith and that the company had been "stringing the Claimant along with an ulterior motive"
• Documented outcomes ignored when they favour the employee
• Designed from the outset to build a paper trail for a decision already taken

The phrase to remember: where the process was a formality, the Court called it "nothing but a showpiece for collateral purposes" and added that it "cannot over-emphasise the importance of acting fairly in managing a case of genuine poor performer".

4. Cases where the employer won

Employers do win these. Two examples:

Extended PIP upheld (PETRONAS-related, reported 2026). The Industrial Court upheld a dismissal where the company had run a structured performance management process over a prolonged period, with two PIPs, repeated warnings that failure to show significant improvement during the second PIP could lead to termination, and extensive support. The claimant argued the second PIP was unreasonable because it coincided with the pandemic and MCO — the Court rejected that, noting the employer was an essential service whose operations continued, so the pandemic had not prevented the claimant from achieving his KPIs. The Court held the company had acted bona fide and properly exercised its management prerogative.

Azura Norden v Small Medium Enterprise Development Bank Malaysia Berhad (Award No. 94 of 2021). Reported as a case where a proper PIP with objective standards, clear timelines and support justified the dismissal when the employee failed to improve.

The pattern is consistent. Employers lose on process, not on whether the employee was actually underperforming. A genuinely weak performer, properly warned, properly supported and properly reviewed, can be lawfully dismissed. The same weak performer, ambushed with a PIP designed to remove them, produces a seven-figure award.

5. If you are the employee: your counter-move

The single most useful thing you can do when a PIP lands is put questions in writing, politely and promptly. It costs nothing and it changes the evidential picture entirely.

Ask, by email:

• What is the standard I am being measured against, expressed as specific and measurable criteria?
• Over what period will I be assessed, and on what dates will reviews take place?
• What support, training or resources will be provided, and by whom?
• What is the consequence if the PIP targets are met? (Get the answer in writing. It is the question Maxis could not answer.)
• What is the consequence if they are not met?

Then:

• Flag impossibility at the time, not later. If targets are carried forward and compounding, or the resources are inadequate, say so in writing while it is happening. Tung's contemporaneous emails about snowballing KPIs mattered.
• Keep every review document.
• Save evidence of the support you did or did not receive.
• Do not resign. Resigning to escape a PIP puts you in constructive dismissal territory, where you must prove you were driven out rather than having left voluntarily — a materially harder case. Get advice first.
• If dismissed, the 60-day s.20 clock starts. File the representation with the Director General of Industrial Relations at the nearest JPP office. See the companion page (Unfair Dismissal in Malaysia: Fired for No Good Reason? You Have 60 Days to Act).

A note on unreasonable PIPs. A PIP with impossible goals, harassment or no support can itself be a factor in a constructive dismissal claim. But "can be a factor" is not "is a claim". This is contested territory and outcomes turn heavily on the facts — take advice before acting on it.

6. If you are the employer

• Warn first. A PIP should not be the first time the employee learns there is a problem.
• Say the word "termination" in writing. The employee must know dismissal is a possible consequence. This is the most commonly missed element and it is fatal.
• Set targets you would defend under cross-examination. Ask whether a competent person in that role, with the resources actually provided, could meet them in the time given.
• Provide real support and document it contemporaneously. If you say the process will be documented, document it. A promise you cannot evidence is worse than no promise.
• Do not carry unfinished items forward indefinitely. Compounding targets look like a designed failure.
• Honour your own review outcomes. If the employee passes, you have a serious problem justifying a dismissal on that basis.
• Do not dress a capability issue as misconduct. Run the right process for the right problem.
• Remember the cost of getting it wrong. Back wages up to 24 months (12 for probationers) plus compensation in lieu, and since 1 January 2021, money awards carry 8% interest per annum from the 31st day after the award.

7. Where this is genuinely uncertain

There is no statutory PIP. Nothing in the Industrial Relations Act 1967 or the Employment Act 1955 requires a PIP or prescribes its contents. The requirements described here are distilled from Industrial Court awards, and awards are decisions on their own facts, not binding precedent in the way appellate judgments are.

"Reasonable opportunity to improve" has no fixed duration. Three months is common in practice, but nothing makes it the standard. Adequacy depends on the role, the deficiency and the support given.

Outcomes vary between chairmen. The same broad facts do not always produce the same result, and awards can be appealed to the High Court within 14 days.

Beware advice that treats a PIP as a magic shield or an automatic red flag. It is neither. A PIP is evidence — of a fair process, or of a rigged one, depending on how it was run.

What to actually do

Employee, on receiving a PIP:

• Do not sign anything acknowledging the substance of the criticism if you disagree with it. Acknowledging receipt is fine and normal; write "received" rather than "agreed".
• Send the written questions in section 5 within a few days.
• Keep a dated file of every review, every email, every request for support.
• If targets become impossible, say so in writing at the time.
• Continue performing to the best of your ability throughout. A visible drop-off during the PIP hands the employer its case.

Employee, after dismissal:

• 60 days to file a s.20 representation with the DGIR. Filing is free and you do not need a lawyer to file.
• Gather: PIP document, all review outcomes, warning letters, prior appraisals (especially strong ones), emails about resources and targets, termination letter, payslips.
• Ministry of Human Resources: 1-800-88-6800. JPP offices: jpp.mohr.gov.my.

Employer, before issuing a PIP:

• Confirm the problem is capability, not conduct.
• Check there is a documented prior warning.
• Draft measurable targets, a defined period, named support, and an express statement that failure may result in termination.
• Diarise reviews and write them up on the day.
• Decide in advance what happens if the employee passes — and be prepared to honour it.