Probationary Employees: Confirmation, Extension and Termination Done Right

In Malaysia a probationer enjoys the same right not to be dismissed without just cause or excuse as a confirmed employee, so employers must base non-confirmation on documented, bona fide assessment of performance or suitability.

Do probationers have unfair dismissal protection?

Yes. The Court of Appeal in Khaliah bte Abbas v Pesaka Capital Corp Sdn Bhd confirmed that a probationer enjoys the same security of tenure as a permanent employee for the purposes of section 20 of the Industrial Relations Act 1967. An employer cannot simply invoke the probation clause and terminate at will.

What differs is the standard of assessment: the employer is entitled to judge a probationer’s suitability for confirmation more broadly — covering performance, attitude, compatibility and conduct — provided the assessment is bona fide and not capricious or a cloak for an ulterior reason.

How should employers run a defensible probation process?

The defensible pattern is straightforward: set measurable expectations at the start, conduct documented reviews during the probation period, communicate shortcomings in writing, and give the probationer a genuine opportunity to improve before deciding against confirmation.

Where performance is borderline, an extension of probation — expressly permitted by a well-drafted contract — is usually safer than immediate termination, and itself signals that the employer acted fairly. The extension letter should state the specific areas requiring improvement.

What about probationers who simply continue working after probation ends?

A recurring trap is the employee whose probation expires without any confirmation or extension letter. The prevailing position in the Industrial Court is that such an employee remains a probationer until affirmatively confirmed, but the longer the silence continues, the stronger the argument that confirmation should be implied from conduct.

Calendar discipline solves this: diarise probation end dates and issue confirmation, extension or termination letters before expiry. Note also that statutory rights — minimum wage, leave, maternity protection — apply to probationers in full from day one.

Key Takeaways for Employers

• Probationers can bring unfair dismissal claims; non-confirmation needs just cause or excuse.
• Suitability is assessed more broadly than for confirmed staff, but the assessment must be bona fide and documented.
• Set expectations early, review in writing, and warn before deciding against confirmation.
• Extend probation (where the contract allows) rather than terminate borderline cases abruptly.
• Always issue a written outcome before probation expires — silence creates disputes.

Frequently Asked Questions

Can an employer terminate a probationer without reasons?

No. A probationer dismissed without just cause or excuse can claim unfair dismissal under section 20 of the Industrial Relations Act 1967, just like a confirmed employee.

Can probation be extended in Malaysia?

Yes, where the contract provides for extension or the employee agrees. The extension should be in writing, before the original period expires, stating the areas requiring improvement.

Is a probationer entitled to annual leave and sick leave? Statutory leave accrues from commencement of employment, although annual leave entitlement under the Employment Act becomes exercisable after 12 months of service. Contractual schemes may be more generous.