When hiring new employees, most companies in Malaysia include a probationary period in the employment contract.
This period allows both the employer and employee to assess if they are the right fit before confirming the employment on a permanent basis.

But how long should probation last? What rights do probationary employees have? And what must employers know before confirming or terminating them?

This article explains everything Malaysian employers should know about managing the probationary period — including compliance rules, best practices, and how Pandahrms can help streamline the process.

What is a Probationary Period?

A probationary period is a trial phase at the start of employment during which both employer and employee evaluate suitability for the job.

The main purpose is to:

• Assess the employee’s performance, attitude, and cultural fit

• Provide training, feedback, and support for improvement

• Allow the employer to decide whether to confirm or terminate the employment

During this period, the employee is considered a probationer, not yet a permanent staff member — but still entitled to protection under Malaysian labour laws.

Duration of the Probationary Period in Malaysia

The Employment Act 1955 does not specify an exact duration for probation.
However, most Malaysian companies typically set it between 3 to 6 months.

Some organisations may extend the probation period if the employee’s performance is below expectations, provided there is clear written notice before the original period ends.

Best practice:

• Keep the initial probation period reasonable (3–6 months)

• If extending, issue a formal extension letter stating the reasons and duration

• Avoid indefinite extensions, which can be seen as unfair treatment

Rights of Probationary Employees

Although probationary employees are on trial, they still have certain legal rights.

1. Fair Treatment
   Employers must evaluate performance fairly and provide feedback or warnings before termination.

2. Notice Period
   Termination or confirmation must follow the notice period stated in the employment contract or, if not stated, the minimum notice under the Employment Act.

3. Statutory Benefits
   Probationers are entitled to benefits such as EPF, SOCSO, EIS, and overtime pay (if applicable), just like confirmed employees.

4. Right to Appeal for Unfair Dismissal
   If a probationary employee is dismissed unfairly or without valid reason, they can file a complaint under Section 20(1) of the Industrial Relations Act 1967 for unfair dismissal.

Employer Responsibilities During the Probationary Period

Employers play a key role in ensuring the probation process is transparent and compliant.

1. Set Clear Job Expectations

Provide a clear job description, KPIs, and company policies from day one.
When employees understand what is expected, performance can be measured objectively.

2. Monitor and Document Performance

Keep regular performance reviews and attendance records.
Documentation helps justify decisions on confirmation or termination later.

3. Provide Constructive Feedback

Probation is a learning stage. Offer feedback sessions and coaching to help the employee improve.

4. Communicate Decisions Promptly

At the end of the probation, issue a confirmation letter if the employee meets expectations, or a termination/extension letter if not.

Termination During the Probationary Period

Employers can terminate a probationary employee, but it must be based on valid reasons such as poor performance, misconduct, or unsuitability for the job.

Termination must follow these principles:

• Provide reasonable opportunity for improvement

• Record all feedback and warnings

• Observe the contractual notice period

• Avoid termination without due process, which could lead to an unfair dismissal claim

Remember: A probationer is not a “temporary” employee. They are still covered by the same basic protections under Malaysian employment law.

Best Practices for Managing the Probationary Period

Here are some practical tips for employers:

1. Conduct a Structured Onboarding Process
   Help new hires adapt quickly with orientation, training, and mentorship.

2. Set Performance Review Milestones
   Review performance monthly or mid-way through probation to identify improvement areas early.

3. Document Everything
   Keep all records of evaluations, attendance, and communication — these will support your HR decisions later.

4. Be Transparent with Employees
   Communicate clearly about whether the employee is being confirmed, extended, or terminated — and explain the reasons.

How Pandahrms Supports Employers

Managing probation effectively requires accurate records and consistent follow-up — something many HR teams struggle to handle manually.

With Pandahrms, you can:

• Track each employee’s probation status and duration easily

• Store all performance evaluations and HR notes in one place

• Integrate attendance, leave, and performance data for review

• Generate digital confirmation or termination letters within minutes

By automating your HR processes, Pandahrms helps reduce administrative errors, ensures compliance, and gives HR teams more control over employee life cycles — from onboarding to confirmation.

Key Takeaway

The probationary period is more than a trial — it’s an important stage for evaluating potential, setting expectations, and building a productive workforce.

By following fair HR practices and using Pandahrms to streamline documentation and monitoring, employers can ensure a smoother and more transparent probation process.