The Myth of 3 Warning Letters

Is an employer required to issue at least 3 warning letters before they can dismiss an employee? Contrary to popular belief, there is no such legal requirement. The origin of this myth is unknown. If an employer is ever in the unfortunate position of issuing multiple warning letters to the same employee, they should remember that dismissal is not a numbers game.

We examine two decisions of the Industrial Court which dealt with warning letters:

Muhammad Jamil Sabdani v Prima Union Plywood (M) Sdn Bhd [2008] 2 LNS 2112

The Claimant was an Assistant Superintendent with the Company. He was given 3 warning letters for failing to perform his duties as an Assistant Superintendent. In reviewing the warning letters, the Court observed that: 

  • The first warning letter did not specify the Company’s instructions that the Claimant allegedly did not follow. 
  • The second warning letter did not clearly state what was the reason for the warning. 
  • The purpose of the third warning letter was also ambiguous.

The Court held that despite there being 3 warning letters, the Company did not give adequate opportunity to the Claimant to improve his work performance (as these warning letters were issued across the same month).  It was unclear whether the Company had explained the warning letters to the Claimant. The Industrial Court also held that the Company provided no cogent evidence on the Claimant’s alleged poor work performance and quality of work. The dismissal was found to be unfair.

Zuraaida binti Che Zahari v The Pacific Insurance Berhad [2018] ILJU 74

The Claimant was initially a receptionist and was redesignated as a clerk. After her transfer as a clerk, she had problems fitting into her new role. Despite being given guidance and counselling sessions by her manager,  the Company viewed that her performance was still lacking by her 8th month  in the new role, as she continued to make the same elementary mistakes.

The Claimant’s poor performance resulted in the Company incurring extra expenses to fix the mistakes, and created extra work for her manager. Although there were some counselling sessions given to the Claimant, no warning letter was issued to the Claimant and she was dismissed by the Company. The Claimant was of the view that the counselling sessions were insufficient . She also contended that the Company did not issue any warning letter stating that stern action would be taken against her if she did not improve.

Despite the lack of a warning letter, the Industrial Court held that the Company had rightfully dismissed the Claimant with just cause and excuse, as she had been given ample guidance and sufficient opportunity to improve.

Key Takeaways
In dismissing an employee for poor performance, the crucial elements to be established are: 

  • That the employee was informed of their performance shortcomings;
  • That the employee was given sufficient opportunity to improve;
  • That despite the opportunity given, the employee still failed to improve.

None of these elements require a warning letter to be issued, much less three warning letters. However, warning letters (if drafted correctly) are useful evidence to demonstrate the first two elements.

In dismissal for misconduct, the necessity of a warning letter before dismissal depends on factors such as the severity of the misconduct. For example, an employee who commits gross misconduct such as fraud or sexual harassment need not have received prior warning letters for misconduct before they are dismissed. The single act of gross misconduct may be enough to warrant immediate dismissal.

Employers should remember the following when dealing with warning letters:

  • The contents of the warning letter. Does it contain sufficient particulars and details to ensure the said employee understands his or her mistakes?
  • Time given to employee to amend their ways. If a warning letter sets unrealistic expectation or deadlines in which an employee is expected to improve by, this may be viewed as bad faith by the employer.
  • Consequences. The warning letter should spell out the consequences to the employee if they repeat the offence or fail to improve their performance.  If dismissal is a possible outcome, this should be in the warning letter so the employee knows the severity.

One may say that more warning letters are better than fewer warning letters, for justifying a dismissal. Maybe the myth of “3 warning letters” originated from a “three strike rule”, or that three warning letters seems like a reasonable number of chances to provide an employee. As dismissal can be a thorny issue, employers should not be focused on the number of warnings but instead look at the substance. Multiple warning letters that are ambiguous or without basis can be viewed as bad faith (or even grounds for constructive dismissal), and lack of written evidence of warnings given are also not favourable.

***

This article was written by Leow Ho Eng (Associate) from Donovan & Ho’s employment law practice.
Donovan & Ho is a law firm in Malaysia, and our employment practice group has built a reputation for providing strategic employment advice to local and global organisations. Our team of employment lawyers provide advice on employment law and industrial relations including review of employment contracts, policies and handbooks, advising on workforce reductions, and managing dismissals of employees for poor performance or misconduct. We also represent clients in unfair dismissal claims and employment-related litigation. Have a question? Please contact us.

 

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