The updated Code of Good Practice on Dismissal, issued under the Labour Relations Act, 1996, was published in Government Gazette No. 53294 and came into effect on 4 September 2025. This Code replaces the previous Code contained in Schedule 8 to the Labour Relations Act and introduces important changes.
The 2025 Code introduces greater clarity, fairness, and flexibility, especially for small businesses. It replaces the older Schedule 8 with a more structured and inclusive framework, ensuring that both employers and employees better understand their rights and responsibilities.
Other than the changes relating to small businesses and the justified deviation for employers in exceptional circumstances to have less formalistic disciplinary processes, there is nothing entirely new in the 2025 Code. While the previous Code provided general guidance, the 2025 Code incorporates established legal principles and case law directly into its text. As such, the changes relating to misconduct, poor performance and operational requirements in the 2025 Code could be regarded as a codification of already existing legal requirements. This may result in not only more clarity for employers and employees but also a stricter approach to what constitutes fairness. This stricter approach stems from the 2025 Code's emphasis on procedural consistency and substantive fairness.
Key changes introduced in the 2025 Code include the following:
- Misconduct - the 2025 Code requires employers to demonstrate that disciplinary rules are clearly communicated to employees, consistently applied, and proportionate to the offence.
- Poor Performance - the 2025 Code requires employers to provide structured support, including training and reasonable time for improvement, before considering dismissal, particularly for non-managerial employees.
- Expanded Misconduct and Poor Performance Guidelines - where the previous Code was more general on what constituted fair process, the 2025 Code outlines detailed examples of misconduct and poor performance, along with step-by-step disciplinary procedures to be followed.
- Operational Requirements - the 2025 Code mandates that a transparent consultation processes be followed, selection criteria be disclosed to employees, and meaningful engagement with affected employees or unions.
- Small Business Accommodation - the Code now includes specific provisions for small businesses, allowing small businesses to follow simpler, less formal disciplinary procedures while still maintaining fairness. For example, a small retail shop may conduct informal disciplinary hearings without legal representation, provided that the employee is informed and allowed to respond.
- Less Formalistic Disciplinary Processes in Exceptional Instances - the Code also provides for less formalistic disciplinary processes if an organisation cannot comply with a formal process in exceptional circumstances, but in terms of which, must be able to justify its deviation. This can apply to large businesses, however, as indicated, it must clearly justify its non-compliance.
- Incapacity Expanded - the Code also includes incompatibility and imprisonment as forms of incapacity. This inherently requires employers to comply with incapacity processes when it relates to employee incompatibility and imprisonment.
The most important feature of the 2025 Code is probably the dedicated section for small businesses, recognizing their unique operational constraints. This is a significant shift from the previous Code, which applied a uniform standard regardless of business size. Small businesses may use less formal processes, provided fairness is maintained. Disciplinary hearings may thus be less formal but must still allow the employee to respond. Employers must further document decisions and reasons for dismissal.
The 2025 Code further encourages small businesses to seek guidance from sectoral bodies or the CCMA. Comparing the 2025 Code with the previous Code the following is apparent:
|
Aspect |
2025 Code |
Previous Code |
|
Small Business |
Explicitly accommodated. Explicitly allows simplified procedures. A small business may now hold informal or less formal hearings. |
No specific provisions. |
|
Grounds for Dismissal |
Misconduct, incapacity, hybrid incapacity, operational requirements, technology related operational needs and reputational harm. |
Misconduct, incapacity and operational requirements |
|
Misconduct |
Emphasises the legitimacy of using informal processes and allows for deviation from the prescribed formal disciplinary processes in exceptional circumstances with appropriate justification by the employer (including large businesses). Provides clear examples and disciplinary steps to be followed. Emphasises progressive discipline and places a strong emphasis on coaching and restorative practice before dismissal. Requires employees to receive written warnings before dismissal. |
Formal procedures generally expected to be followed with limited room for flexibility. Only general guidance provided. |
|
Industrial Action |
Expands on the concept of dismissal for participation in unlawful strikes with factors like legitimacy of demands, duration and harm caused. Allows collective representations to be made. Provides clear steps for issuing ultimatums and engaging with unions. Requires that the employer must consult union before dismissing strikers |
Covered dismissal for participation in unlawful strikes. |
|
Probation |
Formalized expectations and rights of employees. Employer must provide the employee with feedback and allow the employee to make representations before dismissal. |
Dismissal during probation allowed but with certain procedural safe guards. |
|
Performance |
Requires more performance management and support for employees. Employees must be trained and given time to improve performance. |
Evaluation and guidance only |
|
Forms of Incapacity |
Recognizes imprisonment and incompatibility as additional grounds of incapacity. |
Ill-health and injury. |
|
Ill Health |
Places a stronger duty on employers to accommodate employees, especially for work-related illnesses. Requires employers to explore alternative roles for injured staff. |
Recognized but less emphasized. |
|
Retrenchment |
Requires a detailed consultation process and transparency. Includes the terms of a Notice of Possible Retrenchment. Requires that employers must disclose selection criteria the during retrenchment process. Requires employers to explore alternatives to retrenchment (Remote work, re-employment, short-time). |
Guided by section 189 of the Labour Relations Act. Required a consultation process and objective selection criteria to be applied. |
In conclusion, the 2025 Code aims to modernise dismissal procedures, promote fairness, and provide clearer guidance for employers and employees. The 2025 Code promotes fairness and consistency, protects employees from arbitrary dismissal, and provides clearer guidance for employers, especially small businesses.
Employers will have to review their internal disciplinary codes and procedures to ensure alignment with the new Code.
Small businesses, in particular, should take note of the simplified compliance options now available.
This bulletin was authored by partner Paul Fouche, partner Venolan Naidoo, and Candidate Attorney Alyssa Farrand.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
