The concept of probationary periods for new employees has become an integral part of the onboarding process.
When an employee starts a new job, there is often a probation which functions as a “trial period”. Although the word “probation” or “probationer” is not defined in the Employment Act 1955, the Courts in Malaysia have accepted that a probationer is on trial to prove their fitness for the post for which they offer their services.
It is not a legal requirement to put employees on probation, but it is common practice by employers in order to test the probationer’s character, suitability and capacity as an employee (see Equatorial Timber Moulding Sdn Bhd, Kuching v John Michael Crosskey [1986] 2 ILR 1666 ).
Here are some frequently asked questions and common issues about probation and probationers in Malaysia.
What is the difference between a probationer and a confirmed employee?
A probationer does not have the same status, rights or privileges as a confirmed employee, even though they have the statutory right not to be dismissed unfairly (see Khaliah Abbas v Pesaka Capital Corporation Sdn Bhd [1997] 3 CLJ 827 (CA); Vikay Technology Sdn. Bhd. v Ang Eng Sew [1993] 1 ILR 90; Dorsett Regency Hotel (M) Sdn Bhd v Andrew Jayadass James Ambrose [2003] 2 ILR 740 ).
Probationers are considered as employees on trial who do not have a substantive right to hold their post. Confirmation in their position is conditional on the probationers performing their functions to the reasonable satisfaction of their employer.
Nevertheless, the law does recognise that probationers have the same rights as confirmed employees to not be subject to termination without just cause or excuse.
As probationers are employees, they also enjoy statutory rights and benefits under the Employment Act 1955 if they meet the eligibility criteria. (For more information on employee rights and benefits under the Employment Act 1955, please read our Guide to Malaysian Employment Law ).
What is the legal test for terminating probationers?
The suitability of a probationer in their role is dependent on the probationer’s job performance, conduct, behaviour, aptitude and attitude in relation to the job they are hired to do. The test is whether the probationer possesses the right skill, competence, temperament, attitude and suitability which would entitle them to transcend from being an employee on probation to that of a confirmed permanent employee.
This is a subjective test. The Courts accept that the best person to judge the probationer on these requisites would be the employer. As such, the employer may terminate the probationer at the end of the probationary period if they are found to be unsuitable based on inefficiency and unsatisfactory work performance, so long as the employer makes known to the probationer their shortcomings, inefficiencies and instances of unsatisfactory poor performance (see Roslan Baba v Puncak Niaga (M) Sdn Bhd [2013] 3 ILR 216 ).
Can a probationer be terminated before the end of the probation period?
Generally, an employer should not terminate a probationer before the end of their probationary period unless have sufficient reasons to justify immediate termination (e.g.: gross misconduct), and this has to be done in line with the proper procedure.
Can a probationer be automatically confirmed?
Confirmation is not an automatic right of an employee. If the employer takes no positive action at the end/lapse of the probationary period, the probation is deemed automatically extended and the employee remains a probationer until further notice.
However, the Courts have recognised that there can be implied confirmation by way of conduct on the part of the employer. For example, where after the end of the probationary period, the employer starts treating the employee as confirmed by giving them benefits only provided to confirmed employees (see Abdul Majid Hj Nazardin & Ors v Paari Perumal [2002] 2 MLJ 640 (CA)).
What is the legal remedy for a probationer vs a confirmed employee who has been unfairly dismissed?
The remedy of a probationer who has been dismissed without just cause and excuse is capped at 12 months’ backwages, as opposed to 24 months’ backwages in the case of a confirmed permanent employee (see Second Schedule of the Industrial Relations Act 1967).
Does it make a difference if the probation is in respect of a “senior” position or for an experienced employee?
The Courts recognise that the need for warning and opportunity for improvement is much less apparent for employees in senior management as by the nature of their jobs, they should be fully aware of what is required of them and be fully capable of judging for themselves whether they are achieving what is required of them. This principle also applies to probationers (see Robert John Reeves v Menteri Sumber Manusia Malaysia & Anor [2000] 1 CLJ 180 (HC); James v Waltham Holy Cross UDC [1972] ICR 398 ).
A probationer who has the necessary skills, qualifications and experience to effectively discharge their duties and responsibilities is expected to work independently without much guidance or warning. The Courts do not expect an employer to train a probationer with vast experience as if they were a junior employee, especially if the employer had hired the probationer based on their years of experience, and by nature ought to know what their job entails (see Ahmad Mohd Khairuddin v Global Knowledge Network (M) Sdn Bhd [2018] 1 ILR 392 ).
What are the employer’s options at the end of an employee’s probationary period?
Assuming there is nothing contrary in the contract of employment, the employer may:
Employers should review their probationary period clauses to ensure that the right terms are in place, as having vague or overly restrictive terms may impact the employer’s ability to take necessary actions during or at the end of the probationary period.
This article was written by Adelyn Fang (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 .
