Probation and confirmation in Malaysia

“He is still on probation, so we can just let him go.” That sentence has produced more Industrial Court awards against Malaysian employers than almost any other, and the statute contradicts it directly.

Does a probationer have unfair-dismissal protection?

Yes, and you do not need case law to establish it.

Section 20(1) of the Industrial Relations Act 1967 gives the right to a workman. Section 2 defines a workman as any person, including an apprentice, employed by an employer under a contract of employment to work for hire or reward. There is no probation exclusion, no qualifying service period and no wage ceiling.

The clincher is the Second Schedule, which sets the factors the Industrial Court applies when making an award on a s.20(3) reference:

Paragraph 1 — backwages shall not exceed twenty-four months from the date of dismissal, based on last-drawn salary.

Paragraph 2 — in the case of a probationer who has been dismissed without just cause or excuse, backwages shall not exceed twelve months.

Parliament wrote a remedy for the wrongful dismissal of a probationer into the Act. A remedy presupposes the right. The only difference the statute draws is the size of the award, not the existence of the claim.

Section 10(2) of the same Act reinforces it from another direction: when an employer is restricted from terminating employees during a trade-union recognition claim, the proviso carves out non-confirmation of a probationer as one of the permitted terminations — again, the Act naming probationers rather than ignoring them.

What must an employer actually show?

The same thing as for a confirmed employee: just cause or excuse. In practice, for a probationer who has not committed misconduct, that means showing you gave a genuine opportunity to meet the standard:

• a written statement of what the role required, issued at the start rather than reconstructed afterwards
• assessment against those requirements, recorded and dated
• feedback given while there was still time to act on it
• a decision made before the probation period expires, in writing

Terminating on the last day with no assessment on file, or with an appraisal written after the decision, is what converts a defensible non-confirmation into a dismissal without just cause.

Notice, extension and lapse

Probation does not suspend the ordinary rules. Section 12(2) of the Employment Act 1955 requires notice of the same length both ways, and s.13(1) permits either party to pay an indemnity equal to the notice wages instead. If your contract sets one week’s notice during probation for the employee, it sets one week for you too.

An extension must be in writing and served before the original period ends. Where the period simply lapses and the employee keeps working, the employer is arguing against the obvious inference that the probation was satisfied — this is usually described as confirmation by conduct.

Common mistakes

Writing a contract clause promising free termination during probation. Section 7 of the Employment Act voids terms less favourable than the Act, and nothing in a private contract removes a statutory right under a different Act.

Backdating an extension. Extending after expiry is not an extension.

Treating the 12-month backwages cap as a discount. It caps backwages only. It does not cap compensation in lieu of reinstatement, and it does not make the dismissal lawful.

Missing the clock on the employee’s side. Section 20(1A) requires representations within 60 days of dismissal, or where notice was given, within 60 days of the expiry of the notice. That period is jurisdictional.

What’s next

Rewrite your probation letter so it states the standard rather than reserving a discretion, and diarise a confirmation decision two weeks before each probation ends. Then read unfair dismissal under s.20 for the procedure that follows if the decision is challenged.