Labour Law Reform: New Code of Good Practice on Dismissal – Effective September 2025

South Africa has entered a new era of workplace regulation. With effect from 4 September 2025, the long-standing Schedule 8 of the Labour Relations Act (LRA) has been repealed and replaced by a completely new Code of Good Practice: Dismissal.

This represents the biggest change in dismissal rules since the LRA was first introduced, creating a single, streamlined framework that is easier to understand and apply for both employers and employees.

Changes in Structure

• One integrated code – All types of dismissals (misconduct, incapacity, operational requirements) are now brought together under one document, replacing the fragmented approach of the past.
• Layout – Clearly arranged sections for logical navigation.
• Annexure A – A new, standardised retrenchment notice template under section 189(3).
• Simplified wording – Definitions and language updated for accessibility across the workforce.

Seven Notable Innovations

1. Operational Requirements Incorporated

• Retrenchments are now expressly covered in the Code.
• Guidance provided on consultation, selection, severance, and re-employment duties.

2. Recognition of Small Businesses

• Acknowledges the limited HR capacity of SMEs.
• Allows for simpler processes and flexibility.
• Arbitrators must take the realities of small business operations into account.

3. Expanded Sanction Guidelines

• Section 8 introduces new criteria, such as:
  • The importance of the breached rule.
  • The actual or potential damage caused.

4. Additional Dismissal Considerations

• Section 9 requires assessing:
  • The impact of misconduct on the business.
  • Whether the employee admits fault and shows willingness to comply.

5. Updated Approach to Misconduct

• Informal processes are now formally recognised.
• Employers may deviate from rigid procedure if justified.
• Language rights strengthened – employees should be allowed to use a language they are comfortable with.

6. Probation and Incapacity Broadened

• Probation covers both performance and suitability.
• Incapacity expressly includes:
  • Imprisonment
  • Incompatibility
  • Substance abuse

7. Senior Employee Expectations

• Section 20(2) sets higher accountability for senior professionals.
• Warnings may not be required before dismissal, but a fair chance to respond is still essential.

Consistency and Strike Misconduct Clarified

• Section 10 confirms that inconsistent discipline doesn’t automatically render a dismissal unfair. Serious misconduct may still justify dismissal.
• Section 12(2) lists new factors to weigh during industrial action, such as the legitimacy of demands, duration, timing, and harm caused.

What to do next, and what steps Employers should follow

• Review and update disciplinary codes and policies, where needed
• Train managers on the new Code.
• Pay particular attention to the provisions relating to SMEs and probationary employees.

Conclusion

This Code reflects 23 years of legal development, case law, and workplace lessons. It strikes a balance between safeguarding employees and recognising the practical realities of running a business — especially smaller enterprises.

The change is more than just legislative housekeeping; it signals a strategic shift in how dismissals will be handled in South Africa going forward, something that we have been asking for, for some time now.

Although we have been implementing these changes prior to it being Gazetted, it is still important to know, as this is what would be going forward, what would be expected of Employers at the CCMA and Bargaining Council.

Do not get caught off guard; rather, consult SALH so that we can ensure that your business stays within the bounds of the law and meets the requirements set therein.

Off the Desk of

Gerhard Kotze’

Managing Member: SA Labour Help