Code Of Good Practice: Dismissal

On 22^nd August 2025 the Code of Good Practice: Dismissal was signed by the Minister of Employment and Labour and published in the Gazette on 4 September 2025.  This Code repeals Schedule 8 of the Labour Relations Act and is published in terms of section 203(2A) of the Labour Relations Act.  This clause states:

The Minister may issue a code of good practice by publishing it in the Government Gazette in accordance with the provisions of this section, if –

1. Proposals relating to the code of good practice have been tabled and considered by NEDLAC; and
2. NEDLAC has reported to the Minister that it has been unable to reach agreement on the matter.

(2B) Subsection (2A) applies to the amendment or replacement of an existing code of good practice.

While not a law, the CCMA and the Labour Courts will expect employers to take the recommendations in the Code into account when implementing policies or interpreting the LRA in their companies.

The changes to the code are intended to clarify issues, but also an attempt to make it easier for small businesses to deal with dismissal in the workplace.  It seeks to provide an expeditious resolution to disputes, while also protecting employees from unfair action.

The code combines the Code of Good Practice: Dismissal and the Code of Good Practice: Dismissal Based on Operational Requirement, referred to in this code as retrenchment.

Things of particular interest in the Code:

1. Small Business – the code acknowledges that small employers do not have Human Resource Departments with skills and experience in dismissal processes and states that they do not have to comply with obligations that are not practical or feasible for their operation and that anyone interpreting the code should take into account the circumstances in which small businesses operate.
   
   The warning is that in the event of them having a dispute, they would need to prove that the dismissal was for a fair reason and in accordance with a fair procedure.
2. Disciplinary Measures:  the code recommends that disciplinary rules and procedures should be clear and made available to employees in a manner that is easily understood, preferably written, to create certainty and consistency. Records of disciplinary processes should be kept.
3. Fair reason for misconduct dismissal:  The Code states that an employee may be dismissed for serious misconduct if the misconduct renders the continuation of the employment relationship intolerable. The code suggests a number of factors to take into account before determining whether the relationship has become intolerable including:
   1. The nature and requirements of the job;
   2. The nature and seriousness of the misconduct and its effect on the business;
   3. Whether progressive discipline might prevent a recurrence of the misconduct;
   4. Any acknowledgment of wrong doing by the employee and willingness to comply with the employer’s rules and standards; and
   5. The employee’s circumstances (including length of service, disciplinary record and the effect of dismissal on the employee.
4. Fair Procedure:  the code states that the purpose of a fair procedure is to ensure a genuine dialogue and an opportunity for reflection before a decision is taken.  The employee must be notified of allegations, preferably in writing and be given reasonable time to prepare and make representations on both the allegations and the appropriate sanction.
5. Dismissal and Industrial Action:  The Code deals in detail with the procedure to be followed when disciplining and / or dismissing employees who embark on both unprotected and protected strikes and indicates caution in dismissing employees who comply with an ultimatum within the stipulated period. 
6. Probation:  The code recognizes the purpose of probation, but provides this caution:
   
   For example, a practice of dismissing employees at the end of their probation periods for reasons unrelated to their performance or suitability for employment and replacing them with newly hired employees, is not consistent with the purpose of probation and may constitute an unfair dismissal.
   
   Any decision to dismiss an employee during probation must take into account the purpose of the probationary period.
7. Dismissal for poor work performance: An important addition to this section is:
   
   Depending on the circumstances, an employer may not be required to warn an employee that if their performance does not improve, they might be dismissed.  This may be the case for managers and senior employees whose knowledge and experience enables them to judge whether their performance is adequate and employees with a high degree of professional skill where a departure from that high standard would have severe consequences justifying dismissal.
   
   This is an important provision and acknowledges that a senior employee or manager, who would be a high earner, can, in a very short time cause incalculable harm to a business, particularly a small business.
8. Incapacity:  the code talks to incapacity due to ill health or injury, but adds another important reason for an incapacity dismissal:
   
   An employee’s incompatibility, as manifested by an inability to work in harmony with an employer’s business culture or with fellow employees, can constitute a form of incapacity which may justify dismissal.
9. Operational Requirements:  The Code expands the previous code to explain the fair reasons for retrenchment and to emphasize the need to view retrenchment as a measure of last resort.  It also calls for any employer contemplating retrenchment to enter into consultations in good faith and by keeping an open mind.

Conclusion

The revised code provides some clarity regarding fair procedures to be followed in disciplining or dismissing employees for any one of the fair reasons, i.e. misconduct, incapacity or operational reasons.  The recommendations in terms of probation and incapacity recognises some of the most difficult situations experienced in the workplace, particularly by small businesses.   The changes are to be welcomed.