A probation period is meant to give an employer time to assess whether an employee is suitable for the job.
Contrary to what most Malaysians believe, probation doesnt mean that the employer has a free pass to dismiss the employee without proper reasons.
In Tan Cheng Chuon v Kibing Group (M) Sdn Bhd [Award No. 1580 of 2026], the Industrial Court found that a probationer’s dismissal was without just cause or excuse because the employer failed to prove its allegations of poor performance.
The employer was ordered to pay the employee RM173,400.
What Happened in the Case?
The employee joined Kibing Group (M) Sdn Bhd on 3 October 2022 as its Manager of Business Affairs.
He was placed on six months’ probation and later assigned to work in Sabah. His responsibilities included acting as a liaison between the company, villagers, government departments and local authorities in connection with the company’s proposed operations.
His gross monthly salary was RM17,000, comprising:
- RM13,000 in basic salary; and
- RM4,000 as a performance incentive.
His six-month probation period was due to expire in early April 2023. However, the company did not confirm his employment or formally extend his probation.
The employee continued working.
In May 2023, the company allegedly asked him to resign voluntarily. When he refused, he was issued a letter titled “Unsuccessful Probation” and told to leave.
The company maintained that his performance had deteriorated and that he had failed to make sufficient progress on several projects.
What Poor Performance Did the Employer Allege?
The company relied mainly on the employee’s handling of three assignments:
- a futsal tournament organised for local villagers;
- a sea turtle hatchery project; and
- a grazing reserve rehabilitation project.
The company also alleged that the employee had a poor working relationship with his colleagues.
According to the company, it had communicated its concerns to the employee and given him opportunities to improve.
The Industrial Court examined each allegation against the available evidence.
What Must an Employer Prove Before Dismissing for Poor Performance?
Poor performance is different from misconduct.
Misconduct generally involves blameworthy conduct or a deliberate breach of workplace obligations. Poor performance concerns whether an employee is capable of meeting the required standard.
An employer relying on poor performance should ordinarily establish that:
- the employee was informed of the required standard;
- specific performance shortcomings were identified;
- the employee was warned about those shortcomings;
- sufficient time and opportunity to improve were given; and
- the employee still failed to improve.
In Kedah Marble Sdn Bhd v Jaafar Mohamed [2000] 1 ILR 794, the Industrial Court identified three central requirements: warning the employee, giving sufficient opportunity to improve and proving that the employee nevertheless failed to improve.
A general statement that an employee is “not suitable” or “not meeting expectations” may not be enough.
Are Probationary Employees Protected Against Unfair Dismissal?
Yes.
A probationer has not yet secured permanent confirmation in the position. The employer is generally entitled to evaluate the probationer’s performance, character and suitability.
However, that assessment must be genuine and reasonable.
In Khaliah binti Abbas v Pesaka Capital Corporation Sdn Bhd [1997] 3 CLJ 827, the Court of Appeal confirmed that a probationer enjoys protection against dismissal without just cause or excuse.
An employer cannot avoid this requirement simply by describing the termination as:
- unsuccessful probation;
- non-confirmation;
- failure to meet expectations; or
- termination under a contractual notice provision.
If the decision is challenged, the employer must prove that its assessment was made honestly and supported by evidence.
Why Did the Employer Fail to Prove Poor Performance?
The Court found several problems with the employer’s case.
1. The futsal tournament was not shown to be a failure
The company criticised the employee because the venue of the tournament had to be changed at the last minute.
However, the evidence showed that a villager had recently died and local custom prevented the event from being held at the original village. The employee arranged an alternative venue instead.
One of the company’s own witnesses accepted that the event was successful.
The Court was therefore not persuaded that the incident demonstrated poor performance.
2. There was no proven deadline for the turtle hatchery
The company claimed that the employee had failed to make adequate progress on a proposed sea turtle hatchery within two months.
However, it could not produce a written instruction establishing that deadline.
The evidence also showed that the employee had contacted relevant organisations, obtained quotations, prepared a project paper and sought guidance from the Sabah authorities.
The Court found that the project required approvals, budgets and considerable groundwork. The employee could not simply be blamed for failing to complete it without examining the steps he had taken and the support he required from management.
3. The employee had made progress on the grazing reserve project
The company alleged that the employee failed to obtain the necessary supporting letters for the grazing reserve project.
However, the evidence showed that he had met committee members, participated in negotiations and contributed to a term sheet involving proposed compensation of RM2.5 million for five villages.
The employee had also been removed from the project before its completion.
The Court found that the allegation of poor performance was not supported by the evidence.
4. Workplace disagreements did not prove poor performance
The company also relied on the employee’s alleged poor relationship with colleagues.
The evidence showed that there had been differences of opinion and working approaches. Nevertheless, effective communication between the employee and his colleagues continued afterward.
No formal warning was issued concerning his interpersonal or communication skills.
The Court did not consider these workplace disagreements sufficient to justify dismissal for poor performance.
Why Were the Lack of Warnings and Evaluations Important?
The company did not produce any contemporaneous letter or email warning the employee that his performance was unsatisfactory.
The Court found that the employee had not been:
- clearly informed of his alleged shortcomings;
- warned that his employment was at risk;
- given measurable improvement expectations; or
- allowed sufficient time to improve.
The employer’s performance evaluation was prepared on 11 May 2023, after the six-month probation period had already expired.
It was not conducted in the employee’s presence and was only communicated to him on 16 May 2023 which was the day he was dismissed.
The Court described this process as highly irregular and prejudicial.
An appraisal handed to an employee together with a dismissal letter does not provide any meaningful opportunity to improve.
Did Paying the Performance Incentive Affect the Case?
Yes.
The employee had continued receiving the full RM4,000 monthly performance incentive in the months immediately preceding his dismissal.
The Court considered this inconsistent with the company’s claim that he was performing poorly.
This does not mean that payment of an incentive will always prevent an employer from proving poor performance. The purpose and conditions of the payment will matter.
However, employers should ensure that their internal records tell a consistent story.
It may be difficult to argue that an employee’s performance was unacceptable where:
- performance incentives continued to be paid;
- positive appraisals were issued;
- no concerns were recorded;
- important responsibilities continued to be assigned; or
- the employee was never told that improvement was required.
Does Expiry of Probation Automatically Confirm an Employee?
Not necessarily.
The employee continued working after his six-month probation period expired, but the Court still treated him as a probationer when determining the appropriate remedy.
Whether an employee becomes automatically confirmed depends on the employment contract, the employer’s conduct and the surrounding circumstances.
Employers should nevertheless avoid leaving an employee’s status unresolved.
Before the probation period expires, the employer should ordinarily decide whether to:
- confirm the employee;
- extend probation for a stated period and reason; or
- terminate employment based on a properly supported assessment.
The decision should be communicated clearly and in writing.
Can Senior Employees Be Dismissed Without Warning?
The company argued that the employee held a senior position and should have understood what was expected of him without formal warnings.
The Court rejected that argument on the facts.
Although his title was Manager of Business Affairs, the evidence showed that he functioned mainly as a liaison officer and reported to others. He was also not shown to possess specialist expertise in projects such as the turtle hatchery.
Job title alone does not determine whether warnings are unnecessary.
A senior employee may reasonably be expected to understand basic responsibilities without constant supervision. Even so, where dismissal is based on sustained poor performance, the employer should be able to identify:
- the applicable standard;
- the particular failure;
- when it occurred;
- how it affected the business; and
- whether the employee knew their job was at risk.
What Did the Industrial Court Decide?
The Court held that the employer failed to prove poor performance on the balance of probabilities.
The dismissal was found to have been carried out:
- without prior warning;
- without contemporaneous performance evaluations;
- without an opportunity to improve; and
- without credible evidence substantiating poor performance.
The Court therefore held that the employee had been dismissed without just cause or excuse.
Practical Lessons for Employers
Before dismissing a probationer for poor performance, an employer should:
- provide a clear job description;
- set measurable expectations;
- conduct appraisals during the probation period;
- document specific shortcomings;
- communicate concerns promptly;
- issue appropriate warnings;
- provide guidance and reasonable time to improve;
- review whether its incentives and internal records support its position;
- decide whether probation should be extended before it expires; and
- ensure the termination letter states the genuine reason for dismissal.
Probation should be used as an actual assessment period and not as a label relied upon only when the employer decides to terminate.
Practical Lessons for Employees
A probationer facing performance concerns should:
- ask for clear performance expectations;
- request written feedback;
- respond professionally to criticism;
- retain appraisals, emails and relevant work records;
- document completed assignments and management approvals;
- clarify whether probation has been extended or confirmed; and
- seek advice promptly after receiving a termination letter.
An employee who believes they were dismissed without just cause or excuse generally has 60 days to make a representation under section 20 of the Industrial Relations Act 1967.
Final Thoughts
Employers are entitled to decide whether a probationer is suitable for permanent employment.
However, that discretion must be exercised honestly, reasonably and on the basis of credible evidence.
Tan Cheng Chuon v Kibing Group demonstrates why retrospective appraisals and vague complaints are dangerous. By the time the employee was told that his performance was unacceptable, the employer had already decided to dismiss him.
A performance process cannot help an employee improve if the employee only learns about it on the way out.
You can also explore Employment Law Malaysia: The Complete Guide for Employees and Employers (2026) for practical articles on probationary employees, performance management and unfair dismissal.
This article provides general information only and does not constitute legal advice. Industrial Court awards are fact-specific, and each matter depends on its employment documents, evidence and surrounding circumstances.
