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Protecting the Rights of Probationary Employees: Lessons from a Landmark Case in Malaysia

Updated: Mar 12, 2023




While probationary employees have fewer rights than permanent employees, they still have certain legal protections. For example, probationary employees are entitled to:

  1. Fair treatment: Probationary employees must be treated fairly and not discriminated against based on race, religion, gender, age, or disability.

  2. Clear communication: Employers must provide a clear communication regarding the expectations and standards of performance for the probationary period.

  3. Notice of termination: Employers must give notice of termination following the employment contract or minimum notice period required by law [Pease see 4. below].

  4. Termination with just cause: Employers must have a valid reason for terminating a probationary employee, and the reason must not be discriminatory or in violation of any other laws.

If a probationary employee feels that their rights have been violated, they may be able to file a complaint with the Industrial Relations Department or the Labour Court.


But the chances of winning may depend on the case details, and it is best to talk to a lawyer before taking any legal action.


Khaliah Abbas v. Pesaka Capital Corporation Sdn Bhd

The Court of Appeal in Malaysia decided that employees on probation have the same rights as permanent or confirmed employees and that probationary employees cannot be terminated or fired without a good reason.

Industrial Court

In this case, the claimant, Khaliah Abbas, was employed as a probationary employee by the respondent, Pesaka Capital Sdn Bhd. The respondent terminated her employment during the probationary period, citing poor performance as the reason for the termination.


The claimant agreed that the company had the right not to confirm her at the end of her probationary period. But she complained that no reason was given for the Company saying that her work performance was unsatisfactory.


Hence, the claimant filed a complaint with the Industrial Relations Department, alleging that her termination was unfair and that she was not given a fair opportunity to improve her performance.


The company claimed that she did not meet the standard requirements for confirmation, but no standard requirements were stated, and no warning letters were issued to her.


The Industrial Court held that an employer's right to determine the contract during a probationary period depended on the employer being reasonably satisfied with the employee's suitability, and the employer's decision should be made bona fide, not arbitrarily or capriciously. Therefore, the Court concluded that the Claimant's dismissal was wrongful and ordered the company to pay compensation.


The Industrial Court awarded her nine months of salary as compensation rather than ordering her reinstatement.

High Court

The respondent, dissatisfied with the judgement of the Industrial Court's award, submitted an application to the High Court seeking a certiorari order to cancel the Industrial Court's Judgement No. 141 of 1994.


The company argued that the Industrial Court exceeded its jurisdiction in issuing the award because, under Malaysian law, a probationary employee has no right to tenure or reinstatement.


The company cited several Industrial Court cases that support this position.


The High Court agreed with the company's arguments and issued the Certiorari order, canceling the Industrial Court's award.

Court of Appeal

However, the Court of Appeal concluded that an employee on probation falls under the purview of the Industrial Relations Act 1967, which defines a workman as "any person, including an apprentice employed by an employer under a contract of employment to work for hire or reward."


The Court emphasised the need for bona fide and just cause or excuse in dismissing an employee on probation but held that the Industrial Court has the jurisdiction to interfere and set aside dismissals resulting from discrimination or unfair labour practices.


The Court allowed the appeal and set aside the order of the High Court.


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