Written by Magdalene Lee Jin Wei
Introduction
In the Industrial Court case of Lim Teong Kim v Perak FC Sdn Bhd, Case No. 22/4-77/24 case, the Malaysian Industrial Court delivered a significant award of just cause and excuse in employment termination, particularly in high-profile sports contracts.
Brief Facts of the Case
In September 2022, a well-known football coach, Lim Teong Kim (‘the Claimant’) signed a two-year contract with Perak FC. He had to meet certain Key Performance Indicators (‘KPIs’) as part of his contract, including ensuring the team placed at least 9th in the league by the end of the 2023 season.
After a post-match interview in April 2023, tensions increased, and a final warning letter was issued. The Claimant was then put on a Performance Improvement Plan (‘PIP’) by the club, which required that he earn nine points by the middle of the season. The Claimant not only fulfilled this requirement but went above and beyond.
In May 2023, Perak FC terminated his contract despite his compliance, claiming ‘unsatisfactory team performance’. At the time, the team stood at 11th place, but the season was still ongoing, and 16 months remained on his contract.
The Court’s Findings
Three main points were highlighted in the Industrial Court’s ruling that the dismissal was without just cause or excuse:
- Premature Termination — The dismissal was unreasonable because the team still had time to meet achieve the agreed KPI.
- Double Punishment — A warning had already been given in response to the previous post-match incident. Termination could not be justified by it again.
- Compliance with PIP — The Claimant refuted allegations of poor performance by fulfilled the performance requirements set by the club.
The court awarded the Claimant RM1,040,000 in compensation, which is equivalent to his full salary for the remaining 16 months of his contract because reinstatement was no longer feasible.
Conclusion
In conclusion, this case demonstrates that, particularly in cases where an employee has a fixed-term contract, employers must provide fair reasons before terminating an employee. A dismissal cannot be justified by vague claims of poor performance when the employee is actively achieving the goals set out for them. The decision also reinforces the Industrial Court’s role to protect workers against arbitrary termination and ensure the upholding of contractual rights, even in demanding industries like professional sports.
Published on 4 September 2025