What Employers Need to Know about the new Code of Good Practice: Dismissal
On 4 September 2025, the Minister of Employment and Labour gazetted the new Code of Good Practice: Dismissal (hereafter referred to as “the Code”). This Code, effective from the date of publication, repeals the previous Schedule 8 Code of Good Practice on Dismissal and the Code of Good Practice Based on Operational Requirements.
This new Code aims to simplify the procedure and establish a more unified and integrated framework in terms of the rules of dismissals for misconduct, incapacity and operational requirements (retrenchments) under the Labour Relations Act. The intention behind the design of this new Code is to be more practical and flexible (particularly for smaller businesses) whilst keeping fairness at the forefront of the dismissal process.
What has changed?
An Integrated Framework
In the past, dismissals for misconduct, incapacity and operational requirements (retrenchments) were covered by separate codes. The new Code, however, consolidates everything into one unified document. This is aimed at making it easier for employers, employees and trade unions to understand their rights and obligations when it comes to dismissals.
Increased Flexibility for Small Businesses
The Code acknowledges that smaller employers may face certain constraints when it comes to dismissal, e.g., lack of HR infrastructure. As a result, it now recognises that small businesses may follow simpler procedures, as long as fairness is maintained.
The Code emphasises that the purpose of a fair procedure is to foster dialogue and reflection, reflecting the view of our courts regarding the informal nature of how disciplinary hearings should be conducted, thus signalling a legislative move towards a decriminalised approach to procedural fairness.
Probation Clarified
Previously, the purpose of probation was restricted to evaluating employees’ work performance only, however, it now includes both the performance and the suitability of an employee. It is important to note that employers should not misuse “probation” as a means of depriving employees of permanent employment status.
Expanded Definition of Incapacity
Incapacity no longer only refers to the incapacity of an employee due to ill health or injury and includes incompatibility (inability to work in harmony with an employer’s business culture or with fellow employees), substance abuse and imprisonment.
Managers, Highly Skilled & Senior Employees
In the updated Code, the employer may not always need to issue repeated warnings before dismissing highly skilled or senior employees for poor performance, provided that they have an opportunity to respond. The circumstances surrounding the dismissal should still be evaluated in a fair and reasonable manner.
Operational Requirements
Retrenchments are now fully integrated into the unified Code, with clearer rules on consultation, severance and re-employment obligations. This means that employers now have access to a single point of reference for all types of dismissal as recognised by the Code.
Unprotected Strikes
The new Code gives employers updated guidance in terms of how to handle ultimatums, timelines and consultations with unions or employee representatives, in line with developments in case law.
Ensuring Consistency across Sanctions
The new Code stipulates that, as a rule, employers should apply sanctions in the same way that it has been applied to other employees in the past AND consistently between employees. Consistency is integral in assessing the fairness of a dismissal. The Code however affirms that if the misconduct irreparably damages the employment relationship, dismissal may be fair, even if inconsistent with prior sanctions.
This new Code reflects the changing reality and ever-evolving nature of the workplace. In order to stay compliant with these changes in employment law, employers should take the time to review and update their current policies to align with the new Code and ensure that managers are trained on the content thereof to work towards a fair workplace.
Article written by: Jané Theron
Sources:
https://www.gov.za/sites/default/files/gcis_document/202509/53294gen3470.pdf