"You're still on probation, so we can just let you go." No, they can't.

The most common thing a Malaysian employer says when letting go of a probationer is that probation means they don't need a reason.

That is wrong, and the Court of Appeal settled it in 1997.

In Khaliah Abbas v Pesaka Capital Corporation Sdn Bhd [1997] 1 MLJ 376, the Court of Appeal held that probationers have the same legal rights as confirmed employees. An employer must still have just cause or excuse to dismiss one.

1. What probation actually is

Probation isn't a legal requirement in Malaysia. It's a common contractual practice — a trial period, typically 3 to 6 months, during which the employer assesses suitability before confirming permanent employment.

What it is not: a period where employment law doesn't apply.

Probationers are entitled to:

• EPF, SOCSO and EIS contributions
• Rest days, public holidays, paid annual leave, sick leave and hospitalisation benefits
• Overtime where applicable
• Written notice or payment in lieu on termination
• The statutory right not to be dismissed without just cause or excuse

That last one is the whole article.

2. Khaliah Abbas — the case that decides this

The Court of Appeal's holding in Khaliah Abbas v Pesaka Capital Corporation Sdn Bhd [1997] 1 MLJ 376 is the anchor: probationers have the same legal rights as confirmed employees, and an employer must have a valid reason — just cause or excuse — to dismiss one.

What "just cause or excuse" means here: a valid, reasonable ground. For a probationer that's usually poor performance, misconduct, attitude issues, or genuine unsuitability for the role.

The standard the Industrial Court applies, drawn from its own decisions: an employer's right to terminate during probation depends on the employer being reasonably satisfied with the employee's suitability, and that decision must be made bona fide — not arbitrarily or capriciously.

A real illustration. In one Industrial Court case, an employee was terminated on the basis that she hadn't met the standard requirements for confirmation — but no standard requirements had ever been stated, and no warning letters had been issued. The court found the dismissal wrongful and awarded nine months' salary as compensation in lieu of reinstatement.

Read that again from the employer's side: the reason given was performance, and the case was lost because nobody had written down what the performance standard was.

Honest nuance: the Industrial Court does recognise that employers have wider discretion when assessing a probationer's suitability than when dismissing a confirmed employee for cause. It's not the same test in practice. But wider discretion is not unlimited discretion, and it still requires good faith and evidence.

3. Confirmation isn't automatic — but silence has consequences

Two situations that come up constantly.

Probation ends and nobody says anything. Confirmation is not automatic on completion, and a confirmation letter is what formally signals permanent status. But if probation expires without clear action, the employer's position weakens considerably — you can't leave someone in limbo indefinitely and then rely on their probationary status.

Confirmation by implication. Where a company starts treating a probationer as confirmed — granting benefits or appraisals normally reserved for confirmed staff — courts may find the employee was confirmed by implication, regardless of whether a letter was issued.

Extensions. Probation can be extended, but:

• Only if the contract allows it
• Only with valid reasons — incomplete KPIs, attendance issues
• Clearly time-bound — "extended for two months," not open-ended
• Communicated in writing, transparently

Repeated or indefinite extensions without strong justification can be challenged as unfair or oppressive, and keeping someone in limbo for an extended period is precisely the kind of thing that supports a constructive dismissal argument.

4. If you've been dismissed on probation

The deadline is the most important thing on this page.

File a representation for reinstatement under section 20 of the Industrial Relations Act 1967 with the Industrial Relations Department (Jabatan Perhubungan Perusahaan, JPP) within 60 days of dismissal.

That deadline is strict. Miss it and the claim is generally gone, regardless of how strong it was.

Before you file:

• Request your termination reason in writing. If they won't give one, or it's vague or shifting, that itself is useful.
• Gather everything: your offer letter and contract (check the probation clause), any KPIs or job description you were given, all performance reviews and feedback, warning letters if any, emails showing what you were told, and your payslips.
• Note what wasn't done. Were you ever told what the standard was? Did anyone conduct a review? Were you warned and given a chance to improve? The absence of these is the heart of most successful probationer claims.

The process: conciliation at JPP first. If unresolved, the matter may be referred to the Industrial Court.

5. What the Industrial Court can award

If it finds you were unjustly dismissed:

• Reinstatement to your former position, or
• Compensation in lieu of reinstatement, calculated on length of service and salary
• Back wages from dismissal to the last day of hearing — capped at 12 months for a probationer, compared with 24 months for a confirmed employee

Be realistic about the shape of these outcomes. Reinstatement is rarely ordered in practice; compensation is the usual remedy. And a probationer with a few months' service will not receive a large award — the nine months' salary in the case above reflects a reasonably strong set of facts.

On your odds: analysis of Industrial Court decisions indicates employers win just over half of dismissal cases — meaning a substantial proportion of employee claims succeed. Between 2019 and 2023 the Industrial Court resolved close to 87% of dismissal cases brought before it, with over 5,000 cases registered in 2023 alone.

Neither a lottery nor a formality.

6. If you're the employer

The pattern in the losing cases is consistent, so this is straightforward.

• Set written KPIs and a job description from day one. If you can't point to what the standard was, you can't say the employee failed it.
• Do a mid-point review, documented. Commentary in 2026 is direct: a probation process with no written KPIs and no mid-point review is already out of step with what Malaysian courts and practitioners consider reasonable.
• Give feedback and a genuine chance to improve. Courts give significant weight to documented evidence of feedback and opportunity to improve.
• Warn in writing before terminating for performance.
• Extend properly if you extend — reasons, time limit, in writing.
• Issue the confirmation letter promptly if they've passed. Don't let probation lapse silently.
• Give written notice or pay in lieu.

The economics: structured probation management is far cheaper than defending a claim. The documentation that protects you takes a few hours across three months.

What to actually do

If you're on probation:

• Ask for your KPIs and job description in writing in your first week if you weren't given them.
• Ask for a mid-point review. Put the request in writing.
• Keep every piece of feedback, positive or negative.
• If probation is ending and nobody has said anything, ask in writing what your status is.

If you've been dismissed:

• Request the reason in writing.
• File under section 20 IRA within 60 days at the Industrial Relations Department. This deadline is strict.
• Gather your contract, KPIs, reviews, warnings and correspondence.
• Note specifically whether standards were ever set and whether you were warned.
• Consider legal advice — many employment lawyers offer a fixed-fee first consultation.

If you're an employer: - Written KPIs, mid-point review, documented feedback, written warnings, proper extension letters, prompt confirmation.