Terminated During Probation: The Enforceability of Clauses on Notice and Salary in lieu of Notice

Disclaimer: The following is merely the author’s academic opinion and does not in any way constitute legal advice or other professional advice. Formal legal advice should be sought.

A common clause governing the termination of a contract of employment, whether in the context of a probation or not, would be as follows:

a) “During probationary period, two (2) weeks written notice or salary in lieu of notice is required if employment is to be terminated by either party. Upon confirmation, one (1) month’s notice or salary in lieu of notice is required by either party. In case of termination, your salary will be retained subject to income tax clearance from relevant authorities.”[1]

b) “Either party may terminate this contract by giving to the other, in writing, one (1) day’s notice or pay-in-lieu of such notice at any time whilst on probation and one (1) month’s notice or pay-in-Iieu of such notice, upon confirmation.”[2]

c) “Tuan/puan boleh diberhentikan daripada jawatan bila-bila masa selepas diberi sebulan notis atau sebagai ganti notis dibayar sebulan gaji bersih, dengan tidak diberi sebarang sebab.”[3]

Can an employer, relying on a case like Equatorial Timber Moulding Sdn Bhd, Kuching v John Michael Crosskey [1986] 2 ILR 1666 [hereinafter referred to as Equatorial Timber], terminate an employee immediately and refuse to pay the employee’s salary in lieu of notice?[4]