The law on Probationers in Malaysia

This is a brief discussion on the law governing probationers in Malaysia:

The term ‘probationer’ is not defined in the Employment Act 1955 (“EA”) or the Industrial Relations Act 1967 (“IRA”). In general terms, it means an introductory period for both parties to assess the suitability of employment. It is important to understand certain rights of a probationer:

1) Rights under the EA

I would argue that a probationer joins the company and is immediately offered a ‘contract of service’. He enters into a contract despite him being given a trial period of say 3 months. The EA (First Schedule) states that an employee is one who has entered into a contract of service…..This is very clear that a probationer will be entitled to the minimum benefits provided under the EA. There are no exceptions stated in specific sections excluding probationers from such benefits. 

2) Security of Tenure

This is a big question. Many at times, clients will call and ask if they can terminate a probationer because their performance is poor. There is a long argument on this issue that I do not wish to state but do contact me if you need elaboration on this. In essence, a probationer is entitled to security and in the event the Court finds that a probationer has been unjustly terminated, the Second Schedule to the IRA states that the maximum backwages ordered shall be 12 months instead of the usual 24 months. 

3) Termination at the end of Probationary Period

This is possible. Case laws have mentioned that the company has the right to terminate an employee at the end of their probation period. My advise to employers is to have just cause and excuse even when terminating a probationer because they have a right to file for a unlawful dismissal claim anyway. 

4) Notice period

Yes, by not-confirming a probationer, notice period must be given. It is only when the probationer is terminated on grounds of misconduct that notice is not required. The notice period should be according to contract of employment and if there isn’t a notice period, the notice period under s.12 of the EA is applicable. 

5) Extension of probation

Yes, the employees probationary period can be extended. The big issue here is whether or not the probationer will continue to be on probation if the company forgets to confirm him/her. The law states that a probationer shall not be deemed confirmed unless there is an express act confirming the employee. This is by way of a letter, increment, being entitled to benefits that only a permanent employee is entitled to. If none of this is present, the probationer remains as a probationer even at the expiration of the probation period. 

If you are still unclear on the above situation, please drop me an email.