Termination Of A Probation Staff In Malaysia. Can A Company Terminate An Employee Before The End Of Their Probation Period?

Q1. What is the definition of Probationer?

Answer: 

There is no statutory definition of Probationer or Probation staff in the Employment Act 1955 or in the Industrial Relations Act 1967.

However, it is simply mean that a new employee is put on trial for a certain period of time to prove his fitness for the job position in terms of his performance, conduct and character.

Q2. How long is the probation period? 

Answer: 

There is no law governing the length of the probationary period. It will depend entirely on the employment contract agreed upon between the employer and the employee.

The duration period for probation usually from a period of 3 months to 12 months.

Q3. What is the right of an employee during probation?

Answer: 

A probationer or an employee on probation enjoys the same rights as a permanent or confirmed employee1. The list of the rights are as follows:-

• Right to be paid minimum wage

• Right to holiday pay (public holiday)

• Right to a payslip

Q4. What happen at the end of the probationary period?

Answer: 

There is no automatic confirmation in Malaysia. Notwithstanding the contractual probationary period may have lapsed, the employee will continue to remain a probationer until he receives a confirmation letter from the employer2

The company can either confirm the employee as a permanent employee or extend the probation period or terminate the probationer.

Q5. I still didn’t get an official confirmation letter from the employer, however I was allowed to go on annual leave. What is my status under the law?

Answer: 

Generally, there is no “automatic” confirmation in Malaysia. The probationer is allowed to remain in employment, he is neither confirmed nor discharged from employment.

However, the Court may recognize that the probationer was confirmed as a result of the employer’s conduct such as when the probationer is treated as if he was a confirmed employee.

In the High Court case of Paari A/L Perumal3, the High Court held that the employer’s conduct in giving the annual leave to the employee (which they were only entitled to after being confirmed), proved that the employee was a confirmed employee. It was further held that the benefits given meant that the employee has been treated as confirmed.

Hence, if the employer did not write an official letter of confirmation to you but you were allowed to take annual leave in which the benefit was only entitled to after you are being confirmed, you will be regarded as confirmed employee based on the Paari A/L Perumal case.

Q6. Can an employee be terminated during the probation period?

Answer: 

Since the law recognize that an employee under probation have the same rights as a permanent employee, the probationer services cannot be terminated or dismissed without just cause and excuse. The dismissal of the probationer may be open to a claim for reinstatement4 and back wages for up to 12 months.

Q7. How long is the notice period to be given?

Answer: 

The notice period for termination must be according to the employment contract. If there is no notice period stated in the employment contract, the notice period under Section 12 of the Employment Act 1965 is applicable i.e. 4 weeks’ notice (has been employed for less than 2 years).

Mere compliance with the notice period is not sufficient, as the employer still need to provide a good reason for termination such as poor performance, misconduct or redundancy. If not, unfair dismissal claims could arise.

Q8. Since the company must give an employee and/or probationer a valid reason to terminate before the end of the probation period, what type of reasons will be considered valid by the Courts?

Answer: 

Generally, there are 3 circumstances:-

• The probation staff committed a misconduct like sexual harassment.

• The probation staff is performing poorly, he isn’t doing his job well.

• The probation staff is retrenched, which means that the company cannot afford to keep him.

Q9. Is there any good practice to terminate a probationer based on poor performance?

Answer: 

Yes, the employer can follow the following practice:-

• Warn the probationer about his poor performance in a form of a proper evaluation (should be documented and signed off by the probationer).

• Give sufficient opportunity to the probationer to improve his work performance such as communicating specific goals and tasks to be achieved by the probationer in a reasonable timeframe, setting out area of improvements, etc.

• Provide sufficient guidance and advice during probation period.

• Consider extending the probationary period as an alternative to termination, if there is still potential for the employee to improve.

If the probationer still fails to improve his performance after such steps have been taken by the employer, the Court would more likely to determine that the termination was with just cause and excuse.

Q10. What is the remedy if I was unjustly dismissed by the employer while still under the probation period?

Answer: 

In the event the Industrial Court satisfied that a probationer was unjustly dismissed by the employer, the Court may award as follows:-

• Order the employee to be reinstated (if reinstatement is no possible, then compensation in lieu of reinstatement. The calculation of compensation depends on the employee’s length of service and salary);

• Order employer to pay back wages (Back wages are calculated from the date of dismissal until the last day of the court hearing and it shall not exceed 12 months for probationer)

FOOTNOTES 

[1] Section 2 of the Industrial Relations Act 1967 includes probationer. 

[2] K.C. Mathews v Kumpulan Guthrie Sdn Bhd [1981] 2 MLJ 320 and Wong Choon Moey v Practimax Sdn Bhd [2013] 2 ILJ 501.

[3] [2000] 6 MLJ 602. 

[4] Section 20 of the Industrial Relations Act 1967.

THIS FAQ IS PREPARED AND PUBLISHED BY GENERAL LITIGATION, CORPORATE INSOLVENCY AND APPELLATE DEPARTMENT OF THE DISPUTES RESOLUTION OF MESSRS GAN & ZUL, ADVOCATES & SOLICITORS.