Can Company Fire Employee On Probation Without Warning Letter?

The realization that you might have made a poor hiring decision is concerning. You, as the Employer, can evaluate their skills and talents and suitability in the company during this probation period. Similarly, the probationer can decide whether or not to stay in the organization after the period has ended.

Remarkably, there is no mandatory requirement in Malaysia for the duration of the probation period. However, it is not entirely unusual for it to last between 3 and 6 months, depending on the agreement reached between both the Employers and the employees.

While this is true, employers must be aware that probationers have the same rights as full-time employees under our labour laws. In layman's terms, our law somewhat protects the rights of probationers.

We hope to share some key points that an employer should consider when terminating a probationer's contract in this article.

A Probationer Cannot Be Dismissed Without "Just Cause And Excuse."

Unfortunately, the phrase "just cause and excuse" is not defined by law. However, as a basic guideline, an Employer must have compelling reasons and justification to withdraw a probationer.

In any case, the Employer has the discretionary right to confirm or extend a probationer's probation period according to the terms of the contract of employment (if applicable). In the absence of such circumstances, it is always a good practice for the Employer to keep the length of probation reasonably short.

As a general rule, we strongly advise employers to always provide the necessary resources and guidance for probationers to facilitate them in working to the Company's expected standard. This could include: 

• Clearly defining the probationer's duties and responsibilities in their position.

• Provide periodic evaluations of job performance and suitability.

• Communicate any concerns to the probationers as soon as possible.

• Regular weekly dialogue consultations with the probationer should be provided and encouraged.

This is because Malaysian law prohibits employers from dismissing a probationary without a "just cause and excuse." Even if a termination notice is given, such rights are provided in this context by Section 20 of the Industrial Relations Act 1967, which prohibits employers from firing a probationer at their pleasure and will, or for a bad intention, such as discrimination or unfair labour practises.

What Exposure Does The Company Have?

For any of these reasons, if the organization insists on dismissing its probationer without "just cause and excuse," that probationer may be entitled to compensation up to a maximum of 12 months back wages calculation based on his/her/her last drawn salary.

However, suppose the probationer is on a permanent contract. In that case, their back wages are only limited to the remaining term of the contract.

Probationary Employees Dismissed for Bad Performance?

If you've decided to fire an employee, perhaps because of poor performance, you must ensure that your explanations and decision-making are genuine and fair. In other words, employers must act appropriately, such as establishing a clear dismissal procedure and demonstrating that it provided effective communication with the probationer about the reasons and timeline of events. This procedure must also occur directly before the probation period ends. In circumstances where you want to fire the probationer due to 'poor performance.'

Then, it is preferable that you follow the guidelines outlined below:

• You have warned the probationer regarding their poor performance; 

• You have provided the probationer with a sufficient opportunity to meet expectations; 

• And you can demonstrate that, despite the Company's full assistance and training, the employee still continues to fail to improve their performance sufficiently.

As a result, if the probationer's performance remains below an acceptable level based on their capabilities despite proper intervention by the Company, we consider that the Company may have legitimate cause to dismiss such an employee.

How Do You Dismiss a Probationer for Misbehavior?

If dismissal is your only option, we strongly advise you to ensure that your Company's internal dismissal procedure/due inquiry process is sound. This is necessary to avoid potential claims of unfair dismissal.

However, the law recognizes that an Employer has the right to terminate a probationer's service for proven misconduct. You must conduct a proper 'due inquiry' to determine the probationer's 'guilt' before progressing with dismissal.

As nothing more than a general rule, the Employer must always issue a Show Cause Letter or a Warning letter to a probationer accused of serious workplace misconduct.

That being said, we must emphasize that not each misbehaviour would warrant such severe punishment because it will always rely entirely on the facts of each individual case.

Furthermore, the Employer must allow the said probationer enough opportunity to respond to the allegations or defend themselves.

In cases where the Employer appears to believe that its probationer has engaged in gross misconduct (e.g., workplace fighting or theft), there may be reasonable justification to dismiss the probationer without undertaking a domestic inquiry.

Nonetheless, suppose you want to avoid the proper 'due inquiry' procedure. In that case, we strongly advise you to seek appropriate legal counsel from your lawyers.

Don't know how to write a warning letter? Read here.

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