In the case of Nagendrani a/p Ravichandran v Appsmiths Sdn Bhd [Award No. 1046 of 2026], the Industrial Court examined whether a company could lawfully terminate a probationer for poor performance without providing concrete evidence of a formal appraisal process. The Court ultimately found that the absence of documented warnings and improvement opportunities rendered the dismissal unjustified.
Brief Facts
- The Claimant joined the Company as a Human Resource cum Administrative Manager on 6 March 2023.
- On 2 June 2023, the Company issued a termination letter stating that it would not continue the Claimant’s employment beyond her three-month probationary period.
- The Company alleged that the Claimant was terminated due to poor performance, specifically citing her failure to update information for a major client which nearly resulted in a loss of business.
- To support its claim, the Company produced a single-page document listing 15 items and claimed that verbal performance reviews had been conducted by the Board members.
- The Claimant challenged the dismissal, asserting that no formal performance reviews or appraisals were ever conducted during her tenure.
Court’s Findings
The Court emphasized that while employers have the prerogative to decide if a probationer is suitable for permanent employment, this discretion must be exercised through a fair assessment process.
For a dismissal based on poor performance to be valid, the employer must prove that the employee was warned, given a sufficient opportunity to improve, and despite this, failed to reach the required standard.
Upon reviewing the evidence, the Court found the Company’s documentation severely lacking. The single-page list produced by the Company was deemed insufficient to constitute a performance appraisal, as it lacked any indication of a formal review or target-setting.
Furthermore, the Company failed to produce any minutes of meetings or records of discussions to substantiate its claim that verbal reviews had taken place.
The Court also observed that the Company failed to conduct a proper investigation into the specific incidents of alleged inefficiency. Without documentary evidence or testimony from relevant managers to support the allegations of poor performance, the Court concluded that the Company had failed to discharge its burden of proof.
Consequently, the dismissal was held to be without just cause or excuse.
Key Takeaways
Probationers enjoy the same right as permanent employees regarding the requirement for their dismissal to be with just cause and excuse.
When terminating a probationer for poor performance, it is not enough to simply state that the employee is unsuitable. The Company should be able to demonstrate a clear, documented trail of performance concerns. This includes being able to identify specific areas of deficiency, issuing clear warnings, and providing a reasonable timeframe and support for the employee to improve.
The reliance on verbal feedback or informal lists is a high risk strategy. As seen in this case, the absence of formal minutes, signed appraisal forms, written warnings and relevant witness testimony can lead the Court to view the termination as arbitrary or an unfair labor practice.
Businesses should ensure that their human resource processes include standardized appraisal procedures for probationers that are consistently applied and meticulously recorded, to protect against potential claims of unfair dismissal.
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This article was written by Donovan Cheah (Partner) from Donovan & Ho’s employment law practice.
Donovan & Ho is a law firm in Malaysia, and our employment practice group has built a reputation for providing strategic employment advice to local and global organisations. Our team of employment lawyers provide advice on employment law and industrial relations including review of employment contracts, policies and handbooks, advising on workforce reductions, and managing dismissals of employees for poor performance or misconduct. We also represent clients in unfair dismissal claims and employment-related litigation.
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