Dismissals 101: An insight into the proposed amendments to the Code of Good Practice on Dismissals

Introduction

On 22 January 2025, the Draft Code of Good Practice on Dismissal (“the Draft Code”) was published in the Government Gazette for comment. Whilst not yet in effect, the Draft Code in its present form is aimed at providing more lenient and simplified guidelines for terminating a contract of employment. This leniency is particularly intended for small businesses that do not have the time nor resources to apply pre-dismissal procedures in strict accordance with the law.

Additionally, the Draft Code has clarified certain guidelines in order to assist both employers and employees with identifying the appropriate route to follow when dealing with dismissals. Below are a few notable amendments that are set to come into effect once the Draft Code is officially gazetted.

Small Businesses

The Draft Code has acknowledged the realities of small businesses’ inability to reasonably adhere to the current procedures surrounding the termination of employment. As a result, where the obligations are not practical or feasible, small businesses may dispense with the established procedures, provided that there is justification for doing so.

In practice, there will no longer be a reasonable expectation on small businesses to engage in investigations and pre-dismissal processes, while attempting to run a company at the same time. This notwithstanding, businesses are not necessarily precluded from forgoing any dismissal procedure in favour of an expedited process and should adopt procedures which are fair and reasonable.

Dismissal due to misconduct

The Draft Code emphasises the need for dialogue between the employer and the employee, in order for both parties to be aware of and understand the relevant procedures relating to the termination of employment. In doing so, employers are encouraged to provide their employees a period of reflection, prior to any decision being taken against them. As stated above, the form and content of the disciplinary rules and procedures of a company will be wholly dependent on the size and nature of the company. Where exceptional circumstances arise, the employer may dispense with some or all of the prescribed guidelines, however, any deviations must be justifiable in the event that the matter is referred to the CCMA or relevant bargaining council

Industrial Action

Dismissal for unprotected strike action has been further expanded, so as to alert employers to the necessary factors that will need to be considered, prior to proceeding with dismissals. Where employees strike without following any procedure, such strike action would be deemed unprotected and subject to disciplinary action. According to the Draft Code, unprotected strike action is not always deserving of dismissal, and the employer should determine the substantive fairness in deciding the appropriate sanction. The fairness when issuing a sanction of dismissal requires consideration of the following:

•  The seriousness of the contravention of the Labour Relations Act (“LRA”);

• Attempts made to comply with the LRA; and

• Whether the strike was in response to unlawful, unfair or unreasonable conduct by the employer

When determining the seriousness of the striking employee’s non-compliance with the LRA, the employer would need to consider all relevant factors surrounding the strike, including the legitimacy of the striker’s demands, the duration and the harm caused as a result of the strike. Furthermore, the Draft Code has set out the steps an employer must take prior to effecting dismissal of employees.

Retrenchment

Whilst commonly referred to as a dismissal due to operational requirements, the Draft Code has simplified the retrenchment process in order for both employers and employees to understand how the process is supposed to unfold. Additionally, a retrenchment notice guideline in terms of the requirements of section 189 of the LRA, has been annexed to the Draft Code, so as to provide employers with a reference when instituting such proceedings.

Incapacity

Probation

The uncertainty in the use of probation has been fleshed out in order for employers to properly understand its utilisation. The Draft Code has included suitability of employment as an additional prerequisite for employees to adhere to, prior to the confirmation of their employment. This has the effect of allowing an employer to dismiss an employee on probation who is not deemed suited for their role. It should be noted however that probation should be implemented in accordance with procedure by providing a reasonable duration wherein employees should receive guidance in order to acclimate to their new working environment.

Poor performance

Unlike the current Code of Good Practice, the Draft Code has elaborated on the guidelines surrounding dismissal due to poor performance. In the current Code of Good Practice, the fairness of the dismissal is only based on whether the employee failed to meet a performance standard and if so, whether they were aware of the standard, whether they were afforded an opportunity to meet the standard and whether dismissal is an appropriate sanction.

The Draft Code has added an additional aspect when considering the fairness of the dismissal, to include the reasonable achievability of the performance standard. This addition will allow employees to be subject to reasonable performance reviews.

Other forms of incapacity

The Draft Code has added incompatibility as a form of incapacity. By expressly mentioning incompatibility, employees who are unable to work within a company’s business culture or with fellow employees, may be incapacitated. Similar to that of probation, employers should strictly adhere to the correct procedures when incapacitating employees due to incompatibility.

Uncertainty

Whilst providing somewhat of an obligational reprieve for smaller businesses, the Draft Code does not provide clarity as to the criteria a business is to meet in order to be classed as a ‘small business’. In the event that this is not addressed, such qualification would likely be at the discretion of a Commissioner or for determination in the Labour Court.

Additionally, whilst incapacitating an employee due to incompatibility may be reasonable, employers would need to be careful not utilise this for the mere purpose of getting rid of unruly or unwanted employees, as it may result in the aggrieved employee referring a dispute to the CCMA or relevant bargaining council.

Conclusion

It should be reiterated that the Draft Code is not yet in effect. Irrespective of this, it would be advisable for employers with established policies and practices to maintain same, notwithstanding the implementation of the Draft Code. By doing so, Companies would remain protected in terms of Labour legislation, provided that the correct procedures are adhered to and the appropriate outcome/sanctions are reached.

Written by Greg Barnett.

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This article is provided for informational purposes only and should not be substituted for legal advice on any specific matter. Any opinions expressed herein are subject to the law as at the time of writing and will change in accordance with any change in the law. We recommend that you contact HJW Attorneys & Conveyancers  at info@hjwattorneys.co.za directly for advice applicable to your specific matter.