Can a Probationary Employee Be Terminated During Medical Leave?

Operations Manager’s Non-Confirmation Upheld: Industrial Court Finds Digital Employment Contract and Performance Records More Reliable Than Employee’s Denial

Can an employee deny being on probation after electronically signing an employment contract that expressly provides for a probationary period?

In this recent Industrial Court decision, the Court upheld the non-confirmation of an Operations Manager after finding that she was employed as a probationer and that the company had genuine concerns regarding her performance and suitability for the position.

Background

The employee commenced employment with Foundever Malaysia Sdn Bhd on 20 May 2024 as an Operations Manager. She received a monthly basic salary of RM11,500 together with a RM150 mobile allowance.

The company maintained that she was employed subject to a six-month probationary period. Following its assessment of her performance and suitability, the company informed her on 14 November 2024 that her employment would not be confirmed. Her employment formally ended on 28 November 2024 after the applicable notice period.

The employee challenged the termination and claimed that she was not a probationer. According to her, the original job offer had dispensed with probation and she had been employed as a permanent employee.

She also alleged that the company became hostile after she fell ill, refused to provide appropriate medical coverage and terminated her employment while she was on medical leave.

Was She a Probationer?

The Court examined the relevant employment documents and concluded that the employee was, in fact, a probationer.

The full employment contract clearly stated that she was being hired as an Operations Manager on probationary status. The contract was signed electronically through DocuSign.

The employee denied signing or agreeing to the contract. However, the Court found several weaknesses in her explanation:

• The job offer sheet did not contain all the essential employment terms, including the confirmed commencement date and complete job description.
• The full employment contract specified her commencement date, position, probationary status, compensation, benefits and job responsibilities.
• The job offer sheet and employment contract carried an identical DocuSign user identification.
• The employee admitted that the documents were sent to her personal email address and that only she had access to that account.
• She subsequently signed contractual addendums that expressly referred to the original employment agreement.
• Internal emails and onboarding materials also referred to her probationary period.
• When her superior informed her that she had not passed probation, she did not dispute her probationary status during the discussion.

The Court preferred the contemporaneous documentary evidence over the employee’s later denial and found her version of events inherently improbable.

Was the Non-Confirmation Connected to Her Illness?

The employee had taken a significant amount of medical leave during her six months of employment, including:

• 16 days of sick leave; and
• 49 days of hospitalisation leave.

The evidence showed that the company accepted her medical certificates. It also treated her period of home rest as paid hospitalisation leave on a goodwill basis, even though she had not been admitted to hospital.

The Court found that insurance coverage had been provided. Although certain hospitalisation claims were rejected by the insurer, that rejection did not establish that the company had refused to provide medical coverage.

More importantly, the Court found no evidence that her illness or medical leave was the real reason for the non-confirmation.

Performance and Suitability Concerns

The company produced evidence showing that the employee had received feedback regarding her performance and conduct.

Among other matters, she was advised to personally manage escalated and sensitive issues instead of delegating them to coaches. The Human Resources Director also communicated concerns regarding behaviour considered unsuitable for someone holding a managerial position.

A Microsoft Teams discussion further showed that her immediate superior explained the performance concerns and the company’s decision not to confirm her employment.

The Court recognised that a probationary period enables an employer to assess an employee’s character, attitude, capability, attendance, working relationships and overall suitability for permanent employment.

As an Operations Manager receiving a substantial salary, she was expected to understand the responsibilities and standards attached to her senior position. The Court found no evidence that the performance assessment was dishonest, discriminatory, malicious or an unfair labour practice.

Court’s Decision

The Industrial Court held that:

1. The employee was employed as a probationer.
2. The company had genuine concerns regarding her performance and suitability.
3. The non-confirmation was a bona fide management decision.
4. There was no evidence of discrimination, victimisation, bad faith or unfair labour practice.
5. The termination was carried out with just cause or excuse.

Accordingly, the employee’s claim was dismissed. No reinstatement, back wages or compensation was awarded.

Important Lessons for Employers

This decision provides several valuable reminders for employers:

1. Maintain a complete employment contract

A preliminary job offer should not be treated as a substitute for a comprehensive employment contract. Probation, notice, benefits, duties and performance expectations should be clearly documented.

2. Electronic signatures can carry significant evidential weight

Properly maintained DocuSign records, email trails and document histories can help establish that an employee received and accepted the relevant employment terms.

3. Probationers still require just cause or excuse

Probation does not give an employer an unrestricted right to terminate employment. The decision must be genuine, based on suitability or performance, and free from discrimination, victimisation or bad faith.

4. Document performance concerns

Employers should maintain records of feedback, meetings, warnings, performance evaluations and discussions regarding non-confirmation. Contemporaneous records are generally more persuasive than unsupported recollections given much later.

5. Handle medical leave separately from performance assessment

Where an employee is ill, the employer should properly process medical certificates and benefits. Any decision regarding non-confirmation should be supported by independent and documented performance or suitability considerations.

Key Takeaway

A probationary employee may be released when the employer genuinely concludes that the employee is unsuitable for confirmation. However, the employer must be able to demonstrate that the decision was bona fide and supported by credible evidence.

In this case, the company succeeded because its digitally signed employment documents, email records, performance feedback and meeting transcript were more convincing than the employee’s subsequent denial.

Case: Amarjit Kaur A/P Jaktar Singh v Foundever Malaysia Sdn Bhd
Award No.: 1535 of 2026
Industrial Court of Malaysia

Disclaimer: This article is provided for general educational purposes and does not constitute legal advice. Each employment matter must be assessed according to its own facts, applicable contractual terms and current Malaysian employment law.