What Employers Should Do at the End of a Probation Period

Almost all employment contracts include stipulated probation periods, usually lasting between three and six months for most employees. Even if your organisation uses the strictest, most thorough hiring procedures, several variables still affect whether a new hire will eventually be successful in the team.

The statistic mentioned most frequently is that 20% of recruits will not make it through their probationary period. This percentage emphasises the importance of including a probation clause in all employment contracts, which typically permits shorter notice periods if any party decides to terminate the employer-employee relationship.

If you're an HR professional or employer looking to learn more about the probation term, or if you're an employee nearing the conclusion of your probation period, this article is made for you. 

‍

Does the Employment Act 1955 mention anything about probation?

Malaysian employment law is primarily governed by the Employment Act 1955, albeit there is no precise definition of a probationer. However, case law in Malaysia indicates that a probationer can be distinguished from a confirmed employee as a worker undertaking a trial period to evaluate their long-term eligibility for the role.

It's critical to note that a probationary employee has the same legal privileges as a confirmed employee. Companies cannot terminate a probationer's employment without cause or justification. 

Furthermore, impacted probationary employees can file a claim for unfair dismissal with the Director-General for Industrial Relations if they believe this right has been violated.

Whether an employee is on probation or not, the phrase "just cause and excuse" usually suggests that employers need to have a solid basis for firing them.

‍

What should employers assess during the employee's probation period?

The two most important things employers must assess during an employee's probation period are: 

• Suitability for the overall role in the organisation, and

• The employee's work performance.

Although, employers can also assess employees according to their attitude, conduct, and culture fit with their team. 

Based on Malaysian case law, work performance is measured according to the following:

• Incompetence 

• Ineptitude

• Inefficiency 

During the probation period, it is encouraged for employers to schedule periodic check-ins with the employee on probation so they are aware of any gaps in performance and expectations. The manager and probationer should also document and sign the regular evaluations.

Employers must remember to provide enough opportunities for the probationer to act on constructive feedback or improve their work performance.

 

What happens if the employer does not confirm or terminate the probationer?

Employers should ensure that the employment contract states the employee's probation period. This part of the employee's contract should also explain how long their notice period will be and what the probation period means regarding the employee's remuneration or benefits.

At the end of the employee's probation period, the employer, the HR department and the probationer's manager must consider all factors. Usually, most companies will also conduct a probation review. This review is an opportunity for the employer and the probationer to discuss the probation term and how it will impact plans moving forward.

At this point, the employer has three choices:

• They can confirm the probationer,

• They can choose to extend the probationary period, or

• They can terminate the probationer's employment.

What happens if the probationer has reached the conclusion of their term, and the employer has yet to inform them if they have been confirmed or dismissed? 

Has the probationer been automatically confirmed? Unfortunately, no, they are not confirmed as a full-time employee. It is nothing more than a common misconception, as no provision in the Employment Act mentions automatic confirmation.

For an employer to confirm or terminate a probationer, the employee should receive notice at the end of their probation. Employers should note that they can imply the notice via conduct. For instance, if the employer treats the probationer as a confirmed employee, along with benefits, the courts would recognise that the employer has confirmed the probationer. 

Suppose you are an employer looking to clear any confusion. In that case, you should always have a review and evaluation session at the end of the probation and issue the confirmed employee an official confirmation letter through HR.

 

Guidelines for probation extension

The manager should only grant an extension when unusual circumstances warrant it. The management should give the extension before the original probationary period expires.

Once both parties have agreed to the probation extension, the manager must write the requirements. There is no explicit law in Malaysia that limits probation extension. It is critical to make it abundantly clear. This is necessary to avoid potential claims of unfair dismissal.

• The duration of the extension and the date on which it will expire. A month-to-month extension is usually granted for a maximum of three months.

• The reasons for the extension. For example, the employee's performance did not meet the precise standards, but the manager believed that an extension would help the person meet these standards.

• The performance goals that the employee must meet before the end of the extended probation period.

• Any training or assistance provided by the employer during the extension.

• If the employee does not satisfy all of the specified standards by the conclusion of the extended probation period, the company will terminate their employment.

The management should understand that making probation extensions, the norm is not a good idea. Exceptional circumstances must justify an extension.

 

Visit the HR Library to acquire all relevant HR resources.
Contact here for more information on hiring employees.