Drop in work performance, fair statement?

Today, one of my colleague is told and served by my boss a performance warning notice for his ever nonexistence in work performance. I was shocked and amused by his reaction, "who says I am not working, it is just that no one knows". How could he have the cheek to say that and refused to acknowledge the warning letter? I think he got the wrong thing, value perception is not just about others' appreciation of you but your work results.. Recalcitrant.. Deserved to be sacked.