Termination : Can Employer Terminate Based on Performance

Terminating an employee based on performance is a sensitive and complex matter that requires adherence to labor laws and regulations. In Malaysia, employers must navigate the legal framework to ensure a fair and lawful termination process. 

1. The Employment Act 1955 and Termination:

   • Overview of the Employment Act's applicability to termination cases in Malaysia
   • Understanding the distinction between employees covered under the Act and those exempted
   • The role of the Industrial Relations Act 1967 in resolving employment disputes

2. Performance-Based Termination Grounds:

   • Identifying valid grounds for performance-based termination, such as consistent underperformance or failure to meet job requirements
   • The importance of clear job descriptions, performance expectations, and documented performance evaluations
   • Ensuring fair and objective assessment of performance issues before considering termination

3. Due Process and Fairness:

   • Conducting a thorough and unbiased investigation into the employee's performance issues
   • Providing the employee with an opportunity to respond to allegations and present their case
   • Ensuring that the termination decision is based on valid and justifiable reasons

4. Performance Improvement Plans (PIPs):

   • Implementing Performance Improvement Plans to help underperforming employees
   • Setting clear goals, expectations, and timelines for improvement
   • Documenting the PIP process, including discussions, feedback, and support provided

5. Notice Period and Severance Pay:

   • Understanding the notice period requirements under the Employment Act
   • Calculating severance pay based on the length of service and reason for termination
   • Exceptions to notice and severance pay requirements for cases of serious misconduct

6. Consultation and Communication:

   • Engaging in open and transparent communication with the employee regarding performance concerns
   • Offering guidance, coaching, and support to help the employee improve
   • Documenting all discussions and actions taken throughout the performance management process

7. Legal Considerations and Risks:

   • Seeking legal advice to ensure compliance with employment laws and regulations
   • Understanding potential risks and consequences of wrongful termination claims
   • Mitigating legal risks by following proper procedures, documentation, and due process

8. Termination Meetings:

   • Conducting termination meetings professionally, respectfully, and with empathy
   • Providing a clear explanation of the reasons for termination, focusing on performance-related issues
   • Offering support and guidance on next steps, such as job search assistance or counseling services

9. Employee Rights and Settlement:

   • Respecting the employee's rights to privacy and confidentiality during the termination process
   • Settling outstanding dues, such as salary, benefits, and accrued leave
   • Providing necessary documentation, such as termination letters and certificates of service

10. Continuous Improvement and Learning:

    • Evaluating the effectiveness of performance management processes and making necessary improvements
    • Investing in training and development programs to enhance employee performance
    • Creating a culture of performance excellence and continuous improvement

Read More on Ajobthing : 

1. 7 Simple Ways to Improve Employee Performance with KPIs
2. Compassionate Leave: A Guide for HR's in Malaysia
3. Offer Letter : What to Include in an to ensure Clarity and Transparency for Employers
4. Probation Period: Things Employers Should Avoid Doing With Probationary Employees
5. Probation Period : An Employer's Perspective

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