The Fundamentals of Probation for Employees in Malaysia

Disclaimer: This article should not be considered to be legal advice, and altHR is not liable for any actions taken based on this article.‍‍

Most employees in Malaysia are familiar with the concept of probations — it’s common practice for employers to include a period of probation within most employment contracts, usually spanning between 3–6 months. At the end of this time span, managers and HR will usually work together to review the employee’s performance, and if all goes well, the employees are confirmed in employment. 

However, we’ve seen many HR managers in Malaysia asking about the actual technicalities of being on probation. Are they eligible for standard leave entitlements? What’s the notice period like for probationers? What happens if you don’t officially confirm their employment? 

Here’s a quick breakdown for employers, HR managers, and employees in Malaysia. 

The details are in employee agreements

You might be surprised to know that there isn’t actually a legal definition of an employee on probation in the Employment Act 1955. Instead, the main difference for an employee on probation is someone who is undergoing a trial period of sorts to assess their suitability for permanent employment, according to case law. 

This also means that the terms of employees’ probation are usually stipulated within the employment agreement/contract. This usually includes the length of the probation period, as well as possible changes to notice periods in the event of termination (by either party). For many employees on probation, notice periods are shorter compared to those on confirmed employment. 

If employers fail to confirm an employee at the end of their probationary period, this does not mean that the employee has been automatically confirmed. As such, be sure to conduct a documented evaluation and review session at the end of the probation period, and to provide notice of confirmation (or even termination) in black and white for all employees. 

Are employees on probation eligible for benefits like annual leave?

This is a question we see asked fairly frequently. The short answer is that employees on probation are still eligible for whatever benefits that confirmed employees are entitled to in your organisation if it is provided for within the terms of your contract — including leave entitlements. 

What’s important to understand is that there are certain rights which employees are entitled to, regardless of probationary status. For example, an employer cannot terminate a probationer’s service without just cause or excuse. If this happens, the affected employee can make a claim to the Director-General for Industrial Relations. 

Do also note that with regards to benefits, the Employment Act 1955 does not cover every single employee in Malaysia. Instead, the following categories of employees in West Malaysia are governed by the Act: 

• Employees who have entered into a contract of service with monthly wages of RM2,000 or less.
• Employees who — regardless of monthly wage — are engaged in manual labour.
• Domestic servants. 
• And other categories of employees within the First Schedule of the EA 1955.

At the end of the day, employment agreements are key to understanding the terms of an employee’s employment at an organisation — regardless of probationary status. As such, HR managers are advised to have a centralised HR system to store all important documentation.