Africa-Press – South-Africa. New rules in South Africa give businesses greater flexibility in managing dismissals, relaxing procedural requirements, expanding grounds for incapacity or misconduct, easing probation rules, and streamlining retrenchments.
Werksmans Attorneys director, Anastasia Vatalidis, and Associate, Anna Tchalov, explained that on September 4, 2025, South Africa’s new Code of Good Practice: Dismissal took effect, replacing the previous dismissal and operational requirements codes.
“This consolidated framework, guided by the Labour Relations Act 66 of 1995 (LRA), offers employers practical guidance on handling dismissals related to misconduct, incapacity, and retrenchments,” Vatalidis and Tchalov said.
“By clarifying legal obligations and introducing nuanced updates, the code balances fairness with flexibility, particularly for small businesses, while codifying key judicial precedents.”
According to Vatalidis and Tchalov, one major change in the new code is its support for small businesses, in particular.
“The code recognises the unique challenges faced by small businesses, which often lack the resources or expertise for formal HR processes.”
“For instance, a small retailer in Durban may not have the capacity for extensive investigations or structured pre-dismissal procedures.”
The code allows for the fairness of a dismissal to consider the employer’s size and circumstances, offering relief to smaller operations while maintaining LRA standards.
They explained that the code also stresses fair procedures that ensure genuine dialogue before dismissal decisions. “Investigations don’t need to be formal but should suit the context – allegation severity, employer size, and business nature.”
“For example, a Cape Town tech startup investigating a data breach can tailor its inquiry to the issue’s complexity.”
On the other hand, Vatalidis and Tchalov said the code encourages medium and large employers to adopt written disciplinary procedures, though deviations are permissible if justified.
“Notably, well-established workplace rules, like prohibitions on theft, don’t always require written documentation or explicit communication.”
“The code also clarifies that inconsistent dismissal sanctions don’t automatically render a dismissal unfair if the misconduct – such as a factory worker’s repeated safety violations – makes employment untenable.”
Greater flexibility and clarity for employers in managing dismissals
Werksmans’ head office in Sandton
Vatalidis and Tchalov said the code outlines clear steps for dismissals tied to industrial action. This includes the option for collective representations in cases of group misconduct, such as an unprotected strike at a Johannesburg mine.
“It introduces factors for assessing LRA violations, like the strike’s impact, which guide the fairness of resulting dismissals, ensuring employers follow a structured yet practical approach.”
The code also relaxes probation rules to better align with workplace realities. They explained that, previously, less compelling reasons for dismissal during probation applied only to poor performance.
“Now, dismissals for conduct or capacity issues, like a new hire in Pretoria struggling with team dynamics, can also be justified with less stringent reasoning.”
“The code expands probation’s purpose to include assessing overall suitability, not just performance, giving employers greater flexibility to evaluate new staff.”
The code also codifies case law, recognising incapacity beyond poor performance or health issues. In labour law, incapacity occurs when an employee breaches performance standards through no fault of their own.
In the LRA, there are two recognised types of incapacity: poor performance (incompetence) and incapacity due to ill health or injury.
“Incompatibility, such as an employee in a Port Elizabeth firm unable to align with the company culture, is now formally acknowledged as a form of incapacity,” Vatalidis and Tchalov said.
“Additionally, the code clarifies that warnings aren’t always required before dismissal.” This is particularly applicable to senior or highly skilled employees.
For example, this could be used against a manager in Sandton whose underperformance directly impacts revenue. “This reflects practical realities while upholding fairness.”
Vatalidis and Tchalov explained that the code refines existing principles surrounding retrenchments. It details procedural steps and introduces an annexure outlining the notice of possible retrenchment.
“This ensures clarity for employers, such as a Bloemfontein manufacturer, initiating consultations with employees, maintaining transparency and compliance with LRA requirements.”
For employers, they said the new code consolidates and clarifies dismissal practices, offering flexibility for small businesses and codifying judicial precedents without compromising fair labour standards.
“Employers must align with the code’s guidance to ensure dismissals are both substantively and procedurally fair.”
“Those with existing disciplinary codes should review them for consistency with the new framework, noting that self-imposed obligations remain binding even if not in the code.”
For example, a small business in Rustenburg can now tailor its dismissal process to its resources. At the same time, a larger firm in Midrand must ensure its written procedures reflect the code’s emphasis on dialogue and fairness.
“As South Africa’s labour landscape evolves, the code provides a practical roadmap for compliance, balancing employer needs with employee protections.”
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