The Draft Code of Good Practice on Dismissal, which was released for public comment by the Department of Employment and Labour on 21 January 2025, should make it easier for employers to understand the obligations of implementing a dismissal fairly, while also providing a much-needed update to the framework commissioners use to determine the fairness of various dismissals, says Labournet, one of South Africa’s leading labour law consultancies.

Members of the public have 60 days in which to make written submissions on the draft. The language of the current draft has been simplified to make it more accessible to laymen. Some additions that clarify positions adopted through the courts since the previous version was penned, have also been added. Overall, it seems to be moving in a direction which makes it simpler for employers to determine what constitutes a fair dismissal.

“Employers should be empowered to make dismissal decisions that are fair, transparent, and adaptable to the unique needs of their businesses,” says Barry Gordon-Davis, Labournet’s National Litigation Manager. “The Draft Code of Good Practice on Dismissal recognises the need for flexibility in responding to dynamic business conditions while ensuring employees are treated with respect and due consideration throughout the processes followed.”

Small businesses

Right off the bat, the draft takes into account that small businesses should not be treated the same as larger enterprises and grants them lenience in terms of some of the provisions of the code. The code accepts that it may be impractical or unfeasible for small businesses to comply with certain obligations. The draft requires that the fairness of dismissal in a small business be considered in light of the circumstances in which such a business operates. For example, small businesses may not be able to engage in time-consuming investigations while trying to keep the business running. The draft also highlights the fact that small employers often do not staff human resources with skills and experience in dealing with matters of dismissal.

Serious Misconduct

The authors removed examples of what was considered serious misconduct in the previous version, such as gross dishonesty, wilful damage to the employer’s property, wilful endangerment of the safety of others, assault, and gross insubordination. The draft now simply states that dismissal for serious misconduct will be justified if the misconduct makes a continued employment relationship intolerable.

Guidelines for deciding a fair sanction

In deciding on a fair sanction for misconduct, additional factors to be considered were added. This includes the importance of the rule or standard in the workplace, the actual or potential harm or damage caused by the employee’s contravention of the rule or standard, and whether the rule or standard has been consistently applied by the employer. These factors come from the well-known Sidumo v Rustenburg Platinum Mines case and echo standards that have been used in practice for years.

The sanction of dismissal

The draft contains a separate section dealing with the appropriateness of the sanction of dismissal. To determine whether a continued employment relationship is intolerable, employers should consider the following:

• The nature and requirements of the job.
• The nature and seriousness of the misconduct and its effects on the business.
• Whether progressive discipline might prevent a recurrence of the misconduct.
• Any acknowledgement of wrongdoing by the employee and willingness to comply with the employer’s rules and standards; and
• The employee’s circumstances (such as length of service, disciplinary record, and the effect of dismissal on the employee).

Dismissals and industrial action

In addition to dealing with misconduct, factors relevant to assessing the seriousness of an unprotected strike have been expanded. In determining whether dismissal is appropriate for participating in an unprotected strike, the employer must consider:

• The conduct of the parties to the dispute related to the strike and the conduct by any other person that has a bearing on the seriousness of the contravention.
• The legitimacy of the strikers’ demands.
• The duration and timing of the strike; and
• The harm caused by the strike.

The process to be followed before dismissing an employee for participation in an unprotected strike has also been expanded. The employer should take representations by the union official contacted at the onset of the strike into consideration, and discuss the course of action it intends to adopt with the trade union. If there is no trade union, the employer should attempt to engage with leaders or representatives of the striking employees.

The draft makes it clear that it may be unfair to dismiss employees who obey the employer’s ultimatum and return to work within the stipulated period. On the other hand, if the ultimatum is rejected, the employer may dismiss the employees after considering the conduct and any representations of the employees. The code also makes provision for the use of collective discipline in dealing with collective misconduct of this nature.

Dismissal for poor work performance

In addition to the factors listed in the previous version regarding dealing with dismissals based on poor work performance, an employer must now consider whether the required performance standard is reasonably achievable. It makes a distinction in the case of managers and senior employees whose knowledge and experience enable them to judge whether their performance is adequate, as well as employees with a high degree of professional skill where a departure from that standard would have severe consequences justifying dismissal. In such cases, depending on the specific circumstances, an employer may not need to warn an employee that failure to improve performance may lead to dismissal.

Other types of incapacity

The draft now acknowledges that incapacity is not limited to illness, injury, and poor performance, but may extend to any other factors preventing an employee from performing their duties, such as imprisonment. It also expressly acknowledges incompatibility as a form of incapacity. This change is in line with previous judgements.

Operational requirements

Incorporated into the draft is the way dismissals based on operational requirements should be dealt with, specifying what could be considered fair reasons and a fair process for dealing with retrenchment. It is interesting to note that the draft stipulates that selection for retrenchment based on union membership or activity, pregnancy, or any other discriminatory ground, can never be fair, irrespective of whether or not there is agreement to such criteria. It provides a template which employers should use to draft notices of possible retrenchments in a way that meets the standards set in the LRA.

Conclusion

The code does well in terms of clearing up some issues employers have come across in the courts, explaining processes and concepts in a more accessible and user-friendly way, and acknowledging the need to treat cases differently in different circumstances and operational models.

“The Draft Code of Good Practice on Dismissal introduces more comprehensive guidelines, offering employers a clearer path to fair and practical decision-making, while safeguarding the essence of equitable labour practices in South Africa's evolving labour framework,” says Gordon-Davis. “It also addresses the prevalence of unprotected strikes head-on, providing extended guidelines for due process and clear criteria to assess the severity of strike misconduct.”

However, he cautions that the proposed flexibility built into the code will not replace sound labour law advice, which is a necessity in ensuring employers meet their compliance obligations.

For more information, visit www.labournet.com.