On 4 September 2025, the Minister of Employment & Labour published the new Schedule 8: Code of Good Practice: Dismissals (Labour Relations Act, 1995), which is now in effect. The purpose is to establish clearer and more flexible guidelines for employers regarding dismissals in the workplace. The Code identifies and reiterates that there are 3 grounds for dismissal, namely: Misconduct, Incapacity and Operation Requirements or also referred to as Retrenchments. There are a few changes that must be considered, which will have an impact on the manner in which we apply discipline in the workplace. In this article, we will look at the Big 5.

1. Small Businesses

The Code (LRA, 1995) states that Small Businesses will not be held to intensive and time-consuming investigations and formal processes such as larger companies. The Code recognises that not all small businesses have the necessary resources, such as an HR department or other formal processes in place; therefore, they cannot be held to the same high standard as larger, more corporate companies with personnel skilled in human resource management and labour laws (Labourwise: Implementation of Code of Good Practice: Dismissal, 5 Sep 2025). However, small businesses are still obligated to follow a fair procedure, but with more flexibility than before and also consider the company’s operations to be kept in mind.

2. Probation: Period of Evaluation

When dealing with newly recruited employees working out their probation period, the Code provides additional criteria in terms of whether the employee can be appointed permanently. The Code now also refers to “suitability” and not just performance as a criterion to determine whether a new employee is successful before being appointed permanently. How do we determine an employee’s suitability? To answer this question, we must ask, what do we expect from our employee in a certain position? Is the employee fitting in with the company’s culture and collaborating with their colleagues, or does the employee act inappropriately and cause conflict and frustrations?

Once these questions are answered and the employee has been given an opportunity to state their case and be allowed a reasonable opportunity to comply with the expectations, only then can the employer determine whether the employee is suitable for the position, but also for the company, and make the decision to terminate within the probation period.

There is also more flexibility given regarding dismissing employees during probation; the Code emphasises that the reasons for dismissal can be less compelling than for an employee who has already completed his/her probation period. However, a fair procedure must still be followed, like having regular evaluations of the new employee and allowing them time to improve and be heard.

3. The Rule Test

The Code previously referred to the rule test to determine whether misconduct took place and whether disciplinary action should be taken, as well as the severity of the sanction. The Rule Test consisted of asking the following questions: Is there a rule? Has the rule been broken? Has the employee been made aware of the rule, or can the employee have been reasonably expected to be aware of the rule? Has the rule been applied consistently?

The new Code has added another question to the Rule Test, where another question should be asked: why is the rule important?

This question substantiated the severity of the transgression and whether the employee is aware of how serious it is.

4. Incapacity: When is an Employee incapacitated?

Previously, the Code indicated that employee can be incapacitated from performing their work due to health issues or injury; later, mental health was also identified in case law. The Code now also identifies a new form of incapacity, Incompatibility. The term incompatibility has been raised in previous labour matters, but no guidelines or clear definitions were given. Now the Code recognises incompatibility within Item 21(7) of the Code as an incapacity and may justify dismissal if proven that the conditions or behaviours of the Employee are severe and cause an irretrievable breakdown in the trust relationship and/or disrupts the harmonious work environment within the company (CDH: Guideline: The 2025 Code of Good Practice on Dismissal, 2025)

The Code also gives guidance on how to deal with employees who are facing jail time. The same principle of fairness must follow; the employee must be given an opportunity to state their case, and more importantly, in an incapacity procedure, we must look at whether the incapacity is temporary, meaning for a short, reasonable period of time or if it is permanent or for a long and unreasonable time. If an employee is incarcerated due to an allegation, regardless of its nature, the matter should be treated as incapacity rather than misconduct. However, if the allegation involves an offence such as theft from the employer, the situation should first be addressed as incapacity, followed by misconduct proceedings once appropriate.

5. Unprotected Strikes: How to Strike Back

The Code has aligned with the developments in case law and updated the guidelines and procedures to be followed in the event of strikes. Can employees be dismissed for participating in unprotected strikes? The answer is yes, but the dismissal must still be done fairly and consider the following: The seriousness of the strike’s illegality, attempts by employees to comply with the law and if the strike occurred due to an employer’s illegal and/or unreasonable conduct in terms of working conditions and relevant labour laws.

In the event of a strike, the employer must first contact the trade union, informing them of the strike and having a discussion to address the cause and solution of the dispute. Then an ultimatum must be issued either to the trade union, or if there is no trade union, an elected representative of the employees or to all the employees who are participating, in the absence of an elected representative. The ultimatum must be unambiguous and must clearly indicate the required action as well as the consequences of non-compliance.

Conclusion

The new Code of Good Practice on Dismissal has become adequately more flexible, especially for small businesses. Probation and Incapacity procedures have been broadened, and clearer guidelines have been provided. The purpose of the Code is to achieve mutual respect between Employees and Employers. Employees have the right to be treated fairly, and Employers have the right to expect satisfactory behaviour and performance standards.

– Written by: Tertius van Wyk

References:

Labour Relations Act, 1995, Code of Good Practice: Dismissal, Government Gazette, 4 September 2025. https://www.gov.za/sites/default/files/gcis_document/202509/53294gen3470.pdf

Cliffe Dekker Hofmeyr (2025) Guideline: The 2025 Code of Good Practice on Dismissal: https://www.cliffedekkerhofmeyr.com/export/sites/cdh/practice-areas/guides/downloads/The-2025-Code-of-Good-Practice-on-Dismissal.pdf

Labourwise, Implementation of Code Of Good Practice: Dismissal https://labourwise.co.za/labour-news-teazer/implementation-of-Code-of-good-practice-dismissal

Laboursmart Training, 2025 Code of Conduct on Dismissal, Johanette Rheeder, Attorney, BLC LLB. LLM.