When a Performance Plan Becomes a Breach of Trust
Imagine dedicating 17 years to your employer, only to be suddenly told you are underperforming.
No prior warnings. No performance reviews. Just a Performance Improvement Plan (PIP) on your desk, along with the unspoken message that you are no longer welcome.
This was the reality for the Claimant, an Administrative Assistant at a company in Malaysia. After nearly two decades of committed service, a change in leadership and growing friction with the new Head of HR turned the Claimant’s work environment into one marked by humiliation, constant surveillance, and silent hostility.
The Claimant eventually chose to resign. However, this was not just a simple resignation. It was constructive dismissal. The Industrial Court agreed and, as a result, awarded the Claimant RM76,014 in back wages and compensation.
The Anatomy of Constructive Dismissal and PIP Misuse
Constructive dismissal does not always stem from dramatic events. Instead, it often develops through the slow erosion of trust, dignity, and fairness. This typically happens through:
- Unjustified placement under a PIP without prior warnings or evaluations
- Targeted supervision or public humiliation by superiors
- Ignored grievances, even when management is fully aware
- Manipulated or skipped performance reviews
In this case, the Court found that the employer imposed the PIP without any proper performance review or prior warning. It was not designed to help the Claimant grow. Rather, it was used as a tool to push the Claimant out.
What Employers Should Know
Due Process Is Essential
A PIP should never serve as a shortcut to dismissal. Therefore, employers must issue documented warnings, conduct proper reviews, and evaluate performance fairly.
Supervisors Set the Tone
Leadership behaviour, especially microaggressions or biased comments, can escalate and lead to serious legal consequences. As such, manager training and accountability are crucial.
Patterns Matter
Courts do not evaluate isolated incidents alone. Instead, they assess the cumulative treatment of the employee. If the overall pattern reveals a breakdown of trust and fairness, it can support claims of constructive dismissal.
What Employees Should Do
Keep Documentation
Maintain records of all feedback, performance reviews, and any signs of discrimination or hostility. These documents can serve as crucial evidence if things escalate.
Voice Your Concerns
Raise grievances early. Even informal complaints, such as those submitted through feedback forms, are valid, especially when formal processes feel inaccessible.
Understand Your Rights
You have the right to fair treatment, clear expectations, and a genuine opportunity to improve before facing punitive measures like a PIP. Knowing your rights helps you navigate difficult situations more confidently
This case is not just about one unfair experience. Rather, it serves as a warning to organisations that reduce HR practices to checkboxes and paperwork. When handled without integrity, a PIP does not just result in legal consequences. More importantly, it fractures trust across the entire organisation.
Want to read the full Industrial Court judgment?
Download the official case file here: CLAIMANT vs COMPANY – Industrial Court Malaysia – Case No 7-4-1435-22 – Award No 856 of 2025
