Authored by Kayla Ward | 5 November 2025 | Labour and Employment Law

INTRODUCTION

On 4 September 2025, the Minister of Employment and Labour gazetted a new Code of Practice: Dismissal,[1] which is issued under section 203 (2A) of the Labour Relations Act.[2]

This code replaces both the previous Code of Good Practice: Dismissal[3] and the Code of Good Practice on Dismissal Based on Operational Requirements,[4] creating a unified, modern, practical framework for dismissals in South Africa (whether for misconduct, incapacity or operational requirements).

This article highlights some of the key developments introduced by the 2025 Code.

THE KEY CHANGES

A Unified Framework

Before the 2025 Code, dismissals for misconduct and incapacity were governed by Schedule 8 of the LRA,[5] while retrenchments were guided separately.[6]

The 2025 Code consolidates all dismissal categories into one coherent instrument, giving employers a single reference point when reviewing internal policies and procedures. This change promotes consistency and simplicity across all forms of termination.

Flexibility for Small Businesses

One of the most notable shifts in the 2025 Code is the de-emphasis on overly formal disciplinary processes for small businesses. The 2025 Code acknowledges that small businesses face resource constraints preventing them from complying with labour obligations that are not practical or feasible for their operations, at least to the same extent as larger, better-equipped businesses. The size and resources of employers are now relevant factors when assessing procedural fairness.

However, ‘less formal’ does not mean ‘no process’. Employers must still act fairly, and any deviation from the 2025 Code must be reasonable and defensible if later challenged.

Consistency in Sanctions

The 2025 Code reaffirms the principle that disciplinary sanctions should be applied consistently:

‘As a general rule, the employer should apply the sanction of dismissal in the same way in which it has been applied to other employees in the past, and consistently as between two or more employees who participate in the misconduct under consideration.’[7]

The weight attributed to inconsistent sanctions in determining whether a dismissal is fair has been maintained, but the 2025 Code provides that a dismissal may still be fair even where prior inconsistent sanctions were applied. The employer must, however, be able to demonstrate that the misconduct was so damaging that continuation of the employment relationship would be intolerable.

Probation and Incapacity

Historically, probation centred around assessing work performance before the employee’s appointment is confirmed. The 2025 Code expands this to include ‘suitability for employment’, allowing employers to assess whether the probationary employee integrates well with the organisational culture and is able to work in harmony with fellow employees.

In practice, this development is merely a codification of the approach long adopted by the CCMA and Labour Court. In Crawford v Grace Hotel,[8] the CCMA confirmed that:

‘Personality clashes between a probationary employee and her employer . . . are certainly a valid and important factor for an employer to take into account in assessing an applicant’s suitability for a permanent appointment’.

In the same vein, the 2025 Code considers that a non-probationary employee’s inability to work in harmony with an employer’s business culture or with fellow employees could conceivably constitute a form of incapacity warranting dismissal after due process.

Conclusion

The 2025 Code represents a modern and pragmatic evolution of South Africa’s dismissal framework; it balances employers’ operational realities with employees’ right to fair process.

Employers should be cautioned to review their disciplinary, performance, and incapacity policies to ensure full alignment with the 2025 Code.

Disclaimer

Whilst every effort was made to ensure that the content of this article is updated and correct at the time that this article is published, the information and material published on this website is provided for general purposes only and does not constitute legal advice. RHK Attorneys Inc. accepts no responsibility for any loss or damages, whether direct or consequential, which may arise from reliance on the information contained in this article. Please contact our offices with regards to any specific legal problem or matter. For permission to reproduce an article or publication, please contact reception@rhkattorneys.co.za.

[1] GN 3470 in GG 53294 of 4 September 2025.

[2] 66 of 1995.

[3] Schedule 8 of Act 66 of 1995.

[4] GN 1517 in GG 20254 of 16 July 1999.

[5] Act 66 of 1995.

[6] GN 1517 in GG 20254 of 16 July 1999.

[7] S 10.

[8] (2000) 21 ILJ 2315 (CCMA).