Employment Law: Probation

Introduction:-

Probation is not a strange term in employment contracts.

It simply means that an employee is put on trial to prove his fitness for the job position for which he is employed in terms of his performance, conduct, and character.

Probationary Period

Basically, a probationary period is left to be agreed upon between the employer and the employee. There is no law governing the length of the probationary period.

Hence, a probationary period as stated in the employment contract shall be regarded as a contract of an agreed period or duration of trial of a term certain.

Extension or Confirmation

At the end of the probationary period, it is encouraged that the employer either extends or confirms the employee’s service by writing. Whether to extend or to confirm an employee’s service is entirely at the discretion of the employer.

It is well established legal principle that a probationer holds no lien on the post; which means he has no right of tenure to his job beyond the agreed contractual probationary period.

Hence, it is trite law as stated in the case of

K.C. Mathews v Kumpulan Guthrie Sdn Bhd [1981] 2 MLJ 320 

that ‘If no action is taken by the employer either by way of confirmation or by way of termination, the employee continues to be in service as a probationer.’,

as confirmed in the case of

Wong Choon Moey v Practimax Sdn Bhd, [2013] 2 ILJ 501.

Termination of Employee under Probation

Basically, the law recognizes that an employee on probation enjoys the same rights as a permanent or confirmed employee and his or her services must not be terminated without just cause and excuse.

The rationale of such position came from the fact that the definition of ‘Workman’ in Section 2 of the Industrial Relations Act 1967 (‘IRA 1967’) includes probationers, thus the dismissal of a probationer may be open to a claim for reinstatement under Section 20 of the IRA 1967 as well as to claim back wages for up to 12 months.

It follows, therefore that a probationer cannot be dismissed without just cause or excuse during the probationary period or its extension or continuation, whichever the case may be.

The court in deciding whether a probationer has been dismissed with good cause and excuse will consider:-

1. there are the intrinsic distinction between the employees under probation and confirmed permanent employees. For instance, on the expiry of the probationary period of the employees, even if the works of the employees is satisfactory, it does not confer any right on them to be confirmed.
2. the employer, if reasonably satisfied that the employee is not suitable for the job he may be removed. 
3. whether or not the probationer is suitable for the job, it is not just based upon the performance of the employee but also on his conduct, behavior, aptitude, and attitude in relation to the job for which he is employed.
4. in case of inefficiency and unsatisfactory work performance leading to dismissal, the court has to be satisfied:-

– Firstly, as to the manner the worker has failed to perform;

– Secondly, whether he was pre-warned or notified of his performances;

– Thirdly, whether in spite of the warnings he still failed to perform; and 

– Lastly, the Company had acted in good faith and in a reasonable manner in its conduct towards the Claimant.

5. As long as the company makes known to the employee his shortcomings, inefficiencies, and instances of unsatisfactory and poor performance in a proper, coherent and cogent manner, thereby ensuring procedural fairness, the court will regard the company as having met the test above.

In some cases, the court if satisfied that the Company had acted in good faith and in a reasonable manner in dismissing the claimant based on his/her poor performance and that he/she was adequately warned about poor performance; accorded sufficient opportunity to improve and had yet failed to improve performance sufficiently would held that there was no unjust dismissal accordingly.

Remedies

Likewise in the case of unjust dismissal of a permanent employee, the court may resort to Section 30 of the IRA 1967, in which the court shall act according to equity, good conscience and the substantial merits of the case without regard to much technicalities.

In the event the industrial court satisfied that a probationer was unjustly dismissed, the court may award:-

1.Reinstatement ‘

Note: if the court in the course of hearing finds that the award of reinstatement is inappropriate, then the court may substitute the award to compensation in lieu of reinstatement. Such compensation is calculated based on the number of years of service of the employee or probationer, for every year of service, he will be compensated with one (1) month salary); and

2. Backwages

such backwages are calculated from the date of dismissal until the last day of the court hearing, and it shall not exceed 24 months, whereas, for probationer, it shall not exceed 12 months.

About the Author: 

This article was written by Chia Swee Yik, Partner of this Firm, who endeavors to provide practical advice on employment law.

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