Clearer. Broader. More focused. The new Draft Code aims to clarify dismissal procedures for misconduct, incapacity, and now, for the first time, fully incorporates operational requirements. 

The Department of Employment and Labour published a Draft Code of Good Practice on Dismissal (“Draft Code”) in January 2025 for public comment. The purpose of the Draft Code is to provide clearer guidance on dismissals relating to misconduct, incapacity and operational requirements and expand on the current code to also include dismissals based on operational requirements. Although there are no substantial amendments from the previous code, the Draft Code does contain some key updates.

Retrenchments
Retrenchments due to operational requirements are comprehensively addressed in the Draft Code, which incorporates retrenchment guidelines within the dismissal framework. One notable difference is that the Draft Code introduces a structured format for a Section 189(3) retrenchment notice, specifying the information that employers must disclose when preparing written notices to inform employees of potential retrenchments under Section 189(3). However, the information employers are required to disclose remains unchanged from that outlined in Section 189 of the Labour Relations Act 66 of 1995.

Probation periods
The Draft Code recognises that probationary periods are essential for employers to assess both the performance and overall suitability of a new employee. The provisions of the current code relating to probation have been relaxed, making it easier for employers to terminate employment during a probationary period due to poor performance or misconduct. The Draft Code identifies both “performance” and “suitability” as the purpose behind requiring a new hire to serve probation, with the current code mainly focused on “performance.” 

Incapacity
With respect to incapacity due to ill health and injury, the current code and the Draft Code remain largely the same. However, the Draft Code acknowledges that incapacity may also arise from factors unrelated to health or injury. Notably, it recognises that an employee’s inability to work in harmony with an employer’s business culture or with colleagues can constitute a form of incapacity that may justify dismissal.

Dismissals and industrial action
Another noteworthy change is the inclusion of provisions relating to dismissals following industrial action. The current code makes provision for dismissals related to participation in strike action that does not comply with the provisions of the Labour Relations Act. However, the Draft Code introduces factors or provisions that employers need to consider in assessing the seriousness of the contravention, including the conduct of the parties; the legitimacy of the strikers' demands; the timing and duration of the strike and the harm caused by the strike. The Draft Code further lays out a more detailed process that the employer must follow before the dismissal of an employee due to misconduct related to industrial action.

Business size
The Draft Code also expands on provisions regarding small businesses. Similarly to the current code, the Draft Code recognises that the form and content of an employer’s disciplinary code and rules will differ depending on the nature and size of the employer’s business. The Draft Code explicitly recognises that small businesses cannot reasonably be expected to conduct time-consuming investigations and pre-dismissal procedures, as they may lack the capacity and skilled personnel to do so.

Fair dismissals
Regarding provisions relating to fair dismissals, similarly to the current code, the Draft Code proposes that in an event where a dismissal is not automatically unfair, the employer needs only to prove or show that the dismissal was for a fair reason and in compliance with a fair procedure. This contrasts with the current code, which states that the employer must show that the reason is related to conduct, capacity or operational requirements.

It is evident that the Draft Code does not necessarily provide for any drastic amendments or changes but rather refines and explains important areas to emphasise fair dismissal practices; procedural consistency and substantive fairness, in what will hopefully simplify the procedures and processes relating to all forms of dismissal. 

Although the Draft Code has not yet been promulgated, employers are encouraged to scrutinise and familiarise themselves with the Draft Code to ensure that their dismissal procedures and policies are aligned once it comes into effect.


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