The new 2025 Code of Good Practice: Dismissal (“the Code”) replaces all previous dismissal codes in South Africa, specifically the previous Good of Good Practice: Dismissal contained in Schedule 8 of the Labour Relations Act.
The Code creates a single, unified framework for dismissals, including dismissals for misconduct, performance, incapacity and operational requirements.
This consolidation brings greater clarity and consistency, aiming to assist employers and employees to understand and apply fair dismissal principles more easily.
Key Changes and Their Benefits
The following are some of the most important changes introduced by the Code:
- Consolidation and Clarity: By uniting dismissal grounds—misconduct, incapacity, and operational requirements—under one Code, employers gain clearer guidance, reducing confusion and inconsistency in disciplinary actions. This endevours to help prevent disputes and fosters a fairer work environment.
- Flexibility for Small Businesses: The Code recognises operational realities and challenges faced by small employers by allowing simpler, less formal processes where appropriate. This supports smaller companies in managing dismissals without disproportionately burdensome procedures, whilst at the same time maintaining fairness towards employees.
- Expanded Incapacity Grounds: The clear inclusion of grounds such as incompatibility (for example, workplace cultural disharmony), imprisonment, substance abuse, and ill-health as valid reasons for dismissal acknowledges the complex modern day workplace realities. Conversely, it encourages employers to explore alternatives like rehabilitation or counselling first, promoting constructive outcomes rather than immediate termination of employment.
- Greater Guidance on Probation and Performance Management: The Code formally embeds principles around assessing suitability during probation. This now includes assessment of performance. The Code also recognises the long-standing principle that less onerous justification for dismissal in probationary periods may be justifiable.
- Guidance on Retrenchments: The Code outlines specific aspects that should be included in a notice of possible retrenchment, so-called “section 189(3) notice, which provisions were previously only contained in section 189 of the Labour Relations Act. These include aspects such as the reasons for the perceived need for retrenchments, the selection criteria, and possible alternatives to retrenchments.
What Employers Should Do
Given the Code’s emphasis on fairness to employees on the one hand and procedural flexibility for employers on the other, the new Code's principles can lead to smoother dispute resolution, better employment relationships, and a stronger organisational reputation for fairness.
Employers should review and update their disciplinary policies, procedures, and probationary practices to align with the new Code. Attention should be given to embedding fairness, documenting processes thoroughly, and considering business size for potential procedural flexibility. Training managers on these updates will help avoid the risk of disputes (including unfair dismissal disputes), complaints and other penalties.
Contact Legolex for tailored assistance in navigating these important changes confidently.