On 4 September 2025, the Minister of Employment and Labour formally published a new Code of Good Practice: Dismissal (the “Code”). The Code takes effect immediately and repeals both the previous Schedule 8 Code of Good Practice on Dismissal as well as the Code of Good Practice Based on Operational Requirements.
The newly issued Code largely reflects the earlier draft released for public comment in January 2025, but now provides a definitive framework for workplace dismissals. It is intended to serve as practical guidance for employers, employees, and trade unions on dismissals relating to misconduct, incapacity, and operational requirements in terms of the Labour Relations Act.
While the Code sets out broad principles, it allows flexibility where circumstances require, especially for small businesses who may not have extensive HR resources or capacity to implement highly formal procedures.
Key features of the Code
- Grounds for dismissal
Dismissals will only be regarded as fair if they are based on conduct, capacity, or operational requirements and are carried out through a procedurally fair process. - Corrective approach
The Code underscores that disciplinary action should be context-sensitive and progressive, reserving dismissal for instances where continued employment has become intolerable. - Small business considerations
Recognition is given to the limitations faced by small enterprises, granting them leeway to apply less formal disciplinary and consultation processes. - Procedural fairness
The emphasis is on fostering dialogue and reflection rather than rigid formalities, aligning with judicial views that disciplinary hearings can be informal and accessible. - Consistency in sanctions
Employees guilty of similar misconduct should generally face comparable sanctions. However, where misconduct irreparably damages the trust relationship, dismissal may still be appropriate even if past sanctions differed. - Probation
Probation is clarified as covering not only performance but also suitability for employment, including incompatibility. The Code cautions against using probation as a tool to deny permanent employment unfairly. - Work performance after probation
In line with case law, prior warnings may not always be necessary before dismissal, particularly for managers or 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. - Incapacity
Incapacity is now more broadly defined to include incompatibility, ill health, imprisonment, and other circumstances preventing employees from fulfilling their duties. - Retrenchment
The Code provides guidance on retrenchment, requiring written notice, consultation, objective selection criteria, statutory severance pay, and dependent on the outcome of the consultation, preferential re-employment.
The 2025 Code of Good Practice: Dismissal offers updated, consolidated guidance for employers navigating dismissals, ensuring that both substantive and procedural fairness are maintained. While many of the principles remain unchanged, the refinements, particularly around probation, incapacity, retrenchment and small business flexibility, signal a move towards more practical, context-driven application to dismissals.
