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Probation on Fixed Term Contract

Eileen
Member
Mon, 06 Apr 2020 12:11:06 PM  (Last updated: Tue, 21 Apr 2020 10:04:51 AM)

Can we set a probationary period inside a fixed term employment contract?

If there is a probationary period inside a fixed term contract, under what circumstances we can terminate the employee?

KL Siew
Administrator
Mon, 06 Apr 2020 03:27:25 PM

You still can if you think necessary. All the terms and conditions should be clearly stated in the contact about termination of service as well as other matter.

Eileen
Member
Tue, 07 Apr 2020 05:47:11 PM
Originally posted by KL Siew on Mon, 06 Apr 2020 03:27:25 PM

You still can if you think necessary. All the terms and conditions should be clearly stated in the contact about termination of service as well as other matter.

Hi Siew,

Thanks for the information.

Let's said we have putting in a probationary period of 6 months, where if the employee fails to perform and there is a termination clause of 2 weeks notice.

In such case, do we still need to compensate the employee on the remaining balance on the on contract period?

ShzwnyShahdan
Member
Fri, 10 Apr 2020 07:05:54 PM

Hye Eileen,

I would like to assist you regarding your concern.

In the context of Industrial Relations law, an employee may still be dismissed on the ground of poor performance provided that he/she has been warned in writing that he/she has underperformed and still fails to improve despite ample opportunities has been given.

Thus, it is still a good practise to not put probationary period under a fixed-term contract where the employee can still be assessed on his performance in accordance with the  guidelines given under the law on poor performance.

If there is probationary period of six months under a fixed-term contract and the employee is dismissed upon the expiry of the probationary period, the Company still liable to pay the balance of the contract and not only 2 weeks notice.This had been decided in various cases where eventhough the employee was placed under probation, his entitlement upon being dismissed has to be limited to the unexpired term of her contract.

(nienasya@hotmail.com)

kyt12
Member
Sun, 12 Apr 2020 05:14:29 PM

Hi Eileen, 

Yes, it is advisable to set a probationary period. Else, the employment may be treated as without any probationary period. Use a clause that set the probation period and subject to written confirmation. Otherwise it will be deem to be automatically extended. 

Basically an probationary employee can only be dismissed due to some valid grounds, eg. performance, misconduct etc. You need to give ample notice for the employee to improve if you are alleging performance issue. 

Usually if you can prove performance issue and that the employee has been given opportunity to do and yet failed to improve, usually what you do is to pay the balance of the contractual notice period. (not the balance of the probationary period). 

On the other hand, if he is terminated for misconduct, you can terminate him/her immediately. 

Hope this helps. 

KY

Irwin
Member
Tue, 21 Apr 2020 10:04:51 AM

Some company holds the belief that putting employees on a “fixed-term contract” is advantageous. They believe that it would make it easier to terminate problematic employees since they can opt not to renew the contract when the contract ends. What many employers do not realize is that this is not necessarily the case under Malaysian labor law, and a non-renewal of a fixed-term contract can still lead to an unfair dismissal claim. So better set the probationary period eg 3 for executive and 6 for manager and managed by performance 

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