On 4 September 2025, the Code of Good Practice: Dismissal (Schedule 8 of the Labour Relations Act) was published in the Government Gazette, which brought about significant amendments to the previous schedule, particularly relating to small businesses.

The purpose of the Code is to provide employers with clear, user-friendly guidance on dismissing employees, as well as the requirements they must comply with to deem such dismissals fair. Clause 3(2) of the Code lays the foundation of change by stating:

“Any person determining the fairness of a dismissal should take into account, in addition to any other guidelines set out in this Code, the circumstances in which the small business operates.”

It is important to note that “small business” has not been defined in the Act, and as a result, the merits of each case should be considered on its own merits. It is anticipated that the legislature will comment on this issue in due course.

Upon publication of this Code, the previous Codes, Schedule 8: Code of Good Conduct on Dismissals and The Code of Good Practice based on Operational Requirements, are repealed.

Fundamentally, the legislature has acknowledged that small businesses particularly lack the necessary HR / IR expertise, have limited funds, time and resources to adopt stringent investigation processes and therefore, have lowered the expectation of strict procedures for employers of small businesses in several ways.

Misconduct:

The Code now expressly states that employers of small businesses may adopt a less formal approach in terms of disciplining employees. Employers are no longer obliged to follow formal procedures for minor offences, but instead encouraged to provide informal advice or implement correction.

It remains essential for employers to ensure that their employees are aware of the rules and what conduct is deemed to be an offence.

Even in instances of more serious offences, formal procedures are not necessarily required, provided employers can demonstrate that the offending employee was given a reasonable opportunity to consider the offence, make submissions or respond to the charge before a decision of dismissal is made.

Probation:

An employer is obliged to ensure that an employee knows the inherent requirements or skills required for the job. Should they fail to meet such requirements, termination because of Poor Work Performance may be deemed substantively fair.

The Code particularly expresses that employers be given an opportunity to evaluate an employee’s performance before confirming the appointment. This allows employers more flexibility when dismissing an employee due to poor performance. Reasonable guidance, training, counselling and an opportunity to respond are still requisites before the dismissal of an employee on probation.

It is important to note that the Code expressly confirms that probation cannot be used to deny an employee permanent employment.

Poor Performance (after probation):

The Code has highlighted a significant change in terms of poor performance. Employers are no longer required to expressly tell employees that, should their performance not improve, they may face dismissal.  The employee is still entitled to be given an opportunity to defend or provide reasons as to why they should not be dismissed for poor performance.

Incapacity (ill health):

The Code still makes provision for ill health incapacities and highlights that there is an onus on employers to accommodate employees who suffer from work-related illnesses or injuries.

The Code goes further to provide for instances such as “suitability” based on the business’s culture and makes provision for dismissal due to incapacity in this regard; consequently, incapacity now extends beyond ill health and poor work performance.

Operational Requirements

Small businesses can now conduct consultations more flexibly, in a quicker and somewhat less formal process. The complexity of the retrenchment will determine the procedural formalities required. The Code contains an annexure setting out the details required to be furnished for the affected employees or their representative union.

Tips:

1. Use simplified but fair procedures in small businesses.

The Code now allows small businesses to adopt less formal processes for misconduct, probation, and operational requirements. However, fairness remains essential. Employers must still give employees an opportunity to understand the allegations, respond, and be heard before dismissal.

2. Align workplace practices with the updated Code.

Employers should review their disciplinary, probation, performance management, incapacity, and retrenchment processes to ensure they reflect the new provisions. Updating policies and training managers on these changes will help prevent disputes and ensure compliance with the latest legal standards.

Written by Tammy Barnard, Senior Dispute Resolution Official, CEO SA