Court Orders Maxis to Pay Ex-Executive Over RM1 Million for Unfair Dismissal

Medical leave is an important employee right, but it must be used responsibly. Under Section 60F of the Employment Act 1955, employees are entitled to paid sick leave when they are properly examined and certified as unfit for work. However, submitting a medical certificate does not protect dishonest conduct or misuse of medical leave.

Problems With the PIP Process

• She was not given a sufficiently clear warning that failing the PIP could result in dismissal
• The counselling sessions were not properly documented, despite the company’s own internal requirements
• Her supporting team consisted largely of inexperienced employees, making it harder for her to meet the required targets
• Certain performance issues were carried forward between PIP reviews
• Evidence showed she had achieved the required targets during the final review — yet Maxis proceeded with dismissal anyway

Court’s Decision

The Industrial Court ruled that Maxis had failed to provide a satisfactory justification for dismissing Tung. Court chairman S Vanithamany found that the company did not act in good faith and that the termination was without just cause or excuse. The Court awarded Tung a total of RM1,036,640, comprising RM416,640 in back wages (after a 30% deduction for post-dismissal earnings) and RM620,000 as compensation in lieu of reinstatement, calculated at one month’s salary for each of her 25 completed years of service.

Important Lessons for Employers

• Clearly warn the employee in writing that their performance is unacceptable and that continued failure may lead to dismissal
• Document every counselling session — dates, concerns discussed, guidance given, agreed targets and the employee’s responses
• Provide adequate resources and support; don’t set demanding targets while assigning inexperienced or insufficient staff
• Objectively recognise genuine improvement, particularly during the final review
• Keep targets clear, measurable and consistent — don’t continuously move the goalposts
• Follow the company’s own PIP policy; failing to do so seriously weakens the employer’s defence
• Exercise additional care with long-serving employees, who require persuasive evidence and a demonstrably fair process

Conclusion

This decision confirms that a formally structured PIP does not, by itself, make a subsequent dismissal fair. The Industrial Court will examine whether the PIP genuinely offered a reasonable opportunity to improve — not merely whether the paperwork existed.