Recently, our Senior Associate, Muhamad Sharulnizam Mohd Roni, successfully represented the company in Rahimuddin Bin Md Harun v Darul Khusus Venture Sdn Bhd, where this case underscores the importance of setting performance expectation of probationers by the employer. This ruling further clarifies the distinction between non-confirmation of a probationary employee and constructive dismissal.
Brief Facts
The claimant (Rahimuddin Bin Md Harun) was dismissed by the company on 3 April 2023. He was employed as a General Manager with a salary of RM 20,000 per month with effect from 4 August 2022. According to the claimant’s employment contract, he was required to undergo a six month probationary period. His key responsibilities were:
(a) undertaking of marketing activities and product distribution;
(b) increasing the company’s revenue by achieving sales targets set by the company; and
(c) ensuring other aspects such as acquiring the necessary product certification, liaising with local authorities, debt restructuring and operational management were diligently complied with.
The claimant claimed constructive dismissal due to alleged non-payment of salary from February to March 2023 and alleged that his employment was terminated without just cause.
The company’s position was that the claimant was still on his probationary period, and he was not confirmed due to unsatisfactory performance. As such, there was no basis to claim constructive dismissal as the claimant had resigned from his employment as evidenced from the outcome of the Special Board Meeting held on 17 February 2023 to discuss the claimant’s performance during his probationary period.
The Industrial Court found that the claimant was aware of his impending non-confirmation due to his poor performance and as such, the claimant was not constructively dismissed. Accordingly, the claimant’s case was dismissed as the court determined that the company had just cause for not confirming his employment as he did not meet performance expectations during the probationary period.
The Law
The substantive test to determine the validity of a non-confirmation decision taken by the employer is reflected in Equatorial Timber Moulding Sdn Bhd v John Michael Crosskey, Kuching as follows:
“Being a probationer, he has no substantive right to the post. He holds no lien on the post. He is on trial to prove his fitness for the post for which he offers his service. His character, suitability and capacity as an employee is to be tested during the probationary period and his employment on probation comes to an end if during or at the end of the probationary period he is found to be unsuitable and his employer can terminate his probation by virtue or otherwise as provided under the terms of his appointment…”
The burden of proof in a constructive dismissal claim rests entirely on the claimant. This means it is for the claimant to prove on a balance of probabilities that he had been constructively dismissed. The claimant has to establish the following:
(a) the company, by its conduct, had breached one or more of the terms of the employment contract;
(b) the term(s), which had been breached, goes to the foundation of the contract;
(c) pursuant to and by reasons of the breach, the claimant left his employment and not for some other reason; and
(d) the claimant left soon after the breach.
Commentary
As the Industrial Court rightly put it in the Rahimuddin Bin Md Harun award, “Once the claimant has successfully discharged his legal burden of proof to establish that there was a constructive dismissal, the legal burden then shifts to the company to prove that the dismissal was done with just cause and excuse”. However, as this was a case of non-confirmation during probation, the burden of proof was on the company to prove that on a balance of probabilities that the claimant’s dismissal was with just cause and excuse. This case reiterates that a probationer is fundamentally an employee during the probation period.
It is important that an employer keep track of a probationer’s performance and gives him timely feedback so that if the probationer claims to have been constructively dismissed, the employer has sufficient records to prove otherwise.
Whilst the job security of a probationary employee may be limited, he is still entitled to statutory rights and protections under the law. This ruling in Rahimuddin Bin Md Harun is timely reminder for employers to handle probationary employees with fairness and in full compliance with the law in ensuring a balanced and equitable workplace for all.
24 January 2025