Hiring someone new is exciting, but it can also be nerve-wracking. That's why many companies in Malaysia include a probation period, typically lasting between one to six months. Think of it as a trial phase for both parties—a time to assess whether the new member is a good fit for the team and whether the company is the right place for them to build their career. If everything goes well, they become a permanent part of the team.
However, there’s often confusion surrounding probation. Questions about annual leave, notice periods, and what happens if things don't work out are common. Let’s break down in this article.
What Is Probation?
You might be surprised to learn that the term ‘probationer’ isn’t defined in the Employment Act 1955 or the Industrial Relations Act 1967. However, case law recognizes a distinction between a confirmed employee and a probationer. Essentially, a probationer is a new hire undergoing a trial period to determine if they’re suitable for permanent employment.
While probation periods aren’t legally mandated in Malaysia, they are widely practiced and recommended as best practice. The specifics—such as the length of probation, the process of confirmation, and the notice period—are typically detailed in the employment contract.
It’s crucial to understand that employees on probation have the same statutory rights as confirmed employees. This includes entitlements like minimum wage, public holidays, overtime pay, and annual leave. While these basic rights are equal, additional benefits, such as bonuses or incentives, are often reserved for confirmed employees.
Importantly, employers cannot terminate a probationer's employment without just cause or excuse. If a probationer believes they’ve been unfairly dismissed, they have the right to file a complaint with the Director-General of Industrial Relations.
Is a confirmation letter mandatory after probation in Malaysia?
No, a confirmation letter isn't legally mandatory. However, it's highly recommended. There's a common misconception that employees are automatically confirmed once their probation ends. This isn't true. Malaysian law doesn't recognize automatic confirmation i.e. an employee remains a probationer until officially confirmed or terminated.
A confirmation letter not only clarifies the employee's status but also serves as important documentation and can boost morale by acknowledging their new permanent role.
Do probationers have annual leave in Malaysia?
Yes, probationers in Malaysia are entitled to annual leave. The specifics may vary depending on the employment contract, but with the amendments to the Employment Act in 2022, all employees are now entitled to annual leave, regardless of their wages or industry. This means probationary employees are guaranteed their right to annual leave under Malaysian law.
How long can the probation period be extended?
There's no maximum duration for a probation period in Malaysia. While there’s no strict limit, it’s essential to be reasonable, typically around 3 months. Extending the probation period too long can be unfair to the employee and negatively impact morale. Remember, you can't indefinitely keep someone on probation.
If you're considering extending the probation period, it's best to have a clear reason and communicate this openly with the employee.
Are employers required to contribute to EPF, LHDN, and SOCSO during probation?
Yes, employers are required to contribute to EPF, SOCSO, and LHDN for employees on probation. There's no special rule for probationers when it comes to these statutory deductions. As soon as an employee starts working for you, regardless of their employment status, you need to make the necessary contributions. It's a legal obligation.
Can I terminate an employee during the probationary period?
Yes, you can terminate an employee during their probation period. However, it's important to remember that like confirmed employees, probationers have certain employment rights.
This means you can't simply let someone go without just cause.
This means you need to follow proper termination procedures, just as you would with a permanent employee. It's essential to have clear and documented reasons for termination to protect your business from legal repercussions.
Can a probationary employee be terminated without notice?
No, a probationary employee cannot be terminated without notice in Malaysia. Recent amendments to the Employment Act in 2022 have clarified that all employees, including probationary ones, are entitled to a notice period upon termination.
The specific notice period will depend on the terms of your employment contract. If the contract doesn't specify a notice period, the default notice period is 4 weeks for probationary employees who have worked for less than 2 years.
Getting the probation period right is key to building a strong, motivated team and keeping your business on solid ground. By clearly setting expectations, treating probationers fairly, and following the right procedures, you're not just protecting your company—you’re also setting the stage for long-term success. With the right approach, probation isn’t just a trial run; it’s an opportunity to make sure you’ve got the best people on board, ready to contribute to your company’s future.
Efficiently Manage Probation & Onboarding Processes
Managing the ins and outs of probation periods and staying on top of employment laws can be tricky, especially when you're busy growing your business. That’s where Synergy Outsourcing steps in.
We’re here to take the HR headaches off your plate, offering tailored support that ensures your practices are spot-on and compliant with Malaysian law. From crafting employment contracts to managing payroll and handling employee relations, our team has got your back.
Let us handle the HR details, so you can keep your focus where it belongs—on moving your business forward. Feel free to reach out to our team 📞+6 010-277 0718 or 📩 info@synergy-outsourcing.com.
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