New Dismissal Code 2025: Why Every South African Employer Needs to Update Their Disciplinary Procedures Now

Published by Laboured SA | October 2025

Something major happened on 4 September 2025 that most business owners haven’t even noticed yet. The Minister of Employment and Labour quietly replaced the old dismissal guidelines that have been in place since 1996 with a completely new Code of Good Practice on Dismissal. This isn’t some minor technical update, it’s the biggest overhaul of workplace dismissal procedures in South African history, and if your company policies haven’t been updated since the early 2000s, you’re sitting on a compliance time bomb.

Understanding the 2025 Dismissal Code Changes

The new Code replaces Schedule 8 of the Labour Relations Act and the 1999 Code on Operational Requirements. What you need to understand is that while the basic fairness principles remain the same, the procedural requirements have become significantly more detailed and prescriptive. This matters because when employees challenge dismissals at the CCMA, your procedures will be judged against this new standard, not the old one you’ve been using for the past twenty-something years.

Old Code vs New Code: What Actually Changed

Here’s a side-by-side comparison of the key differences between what employers had to follow before and what’s required now:

Why Your Current Disciplinary Code Is Probably Non-Compliant

Most companies drafted their disciplinary codes sometime between 1996 and 2005 and haven’t touched them since. That means your procedures likely don’t address probation properly, don’t include specific notification requirements, don’t account for small business flexibility if you qualify, don’t cover the expanded incapacity grounds, and definitely don’t follow the new retrenchment consultation template. Every dismissal you process using these outdated procedures creates potential CCMA liability.

Small Business Dismissal Procedures: Finally Some Recognition

If you run a small business, section 3 of the new Code is your friend. For the first time, labour law explicitly acknowledges that you can’t be expected to engage in lengthy formal investigations while simultaneously keeping your business operational. The Code states that small businesses don’t have human resource departments with specialist skills and that any person determining fairness should take these circumstances into account.

This doesn’t mean you can ignore fairness principles, but it does mean you have more flexibility in how you apply them. You can adopt less formal approaches provided employees still get a genuine opportunity to respond to allegations and decisions are made fairly. This recognition is long overdue and should give small employers some breathing room when dealing with misconduct or poor performance issues.

Probation Period Dismissals: The Rules Have Changed

Many employers treat probation casually, assuming they can simply let people go if things aren’t working out. The new Code makes it crystal clear this isn’t how it works. You must now give employees reasonable evaluation, instruction, training, guidance or counselling during probation. The probation period must be determined in advance and be reasonable given the job complexity. Before dismissing during or at the end of probation, you must invite the employee to make representations and genuinely consider what they say.

The threshold for dismissal is lower during probation, meaning you don’t need as compelling reasons as you would after confirmation, but you still need legitimate performance or conduct-related reasons and you still need to follow a fair process. Get this wrong and you’re looking at an unfair dismissal finding despite the employee being on probation.

Incapacity Dismissals Now Include Cultural Incompatibility

This is genuinely new ground. Section 21(7) of the new Code explicitly states that “an employee’s incompatibility, as manifested by an inability to work in harmony with an employer’s business culture or with fellow employees, can constitute a form of incapacity which may justify dismissal.” This recognises what employers have known for years, sometimes people are technically competent but simply can’t fit into the workplace culture or work harmoniously with colleagues.

Of course, before dismissing on this ground, you must still investigate properly and consider alternatives short of dismissal. You can’t just claim someone doesn’t fit and dismiss them. But having this explicitly recognised as a legitimate form of incapacity is significant and gives employers a clearer framework for addressing these difficult situations.

Retrenchment Consultation Requirements Are Now Highly Structured

If you’re contemplating retrenchments, the new Part G and Annexure A requirements are mandatory reading. You must now issue a formal written notice that addresses nine specific categories: how many employees in which job categories will be affected, what the operational reasons are, what alternatives you considered and why you rejected them, what selection criteria you’ll use, when retrenchments will happen, what severance pay you’re offering, what assistance you’ll provide, whether re-employment is possible, and if you employ more than 50 people, details about your total workforce and recent retrenchment history.

The consultation process must be genuine, conducted in good faith, with an open mind. You must seriously consider any proposals from unions or employees. Selection criteria must be fair and objective, with length of service and retention of skills being generally accepted criteria. Selection based on union membership, activity, pregnancy or discriminatory grounds can never be fair. The minimum consultation period is 60 days if section 189A applies, though consulting parties may agree to extend this for meaningful engagement.

Fair Dismissal Procedures: What You Must Do Before Dismissing for Misconduct

The new Code spells out procedural fairness requirements in much more detail than before. Before dismissing for misconduct, you should notify the employee of the allegations preferably in writing, using language they can reasonably understand. Give them reasonable time to prepare a response to both the misconduct allegations and the proposed sanction. Allow them assistance from a trade union representative or fellow employee if they want it. Where reasonably possible, give them the opportunity to converse in a language they’re comfortable with.

After the enquiry, communicate your decision and preferably provide written notification. Remind dismissed employees of their right to refer the matter to a bargaining council or the CCMA. If you’re disciplining a trade union representative, you must first inform and consult the trade union itself. In exceptional circumstances where you can’t reasonably comply with these procedures, you may dispense with them, but you’ll need to justify this if the employee challenges the procedural fairness.

Progressive Discipline: Not Optional Anymore

The new Code explicitly endorses progressive or corrective discipline as the primary approach. The purpose of discipline is to help employees understand required standards and correct their behaviour through graduated measures like counselling and warnings. Formal procedures don’t need to be invoked for every minor rule breach, informal advice and correction is often more effective.

Repeated misconduct warrants warnings graded by severity. Serious infringements or repeated offences may require final warnings or other action short of dismissal. Dismissal should be reserved for serious misconduct or repeated offences after progressive discipline has failed. This means you need documented evidence of earlier corrective steps before dismissing for most types of misconduct, unless the conduct is so serious that it makes the employment relationship intolerable.

When Is Dismissal an Appropriate Sanction?

Section 9 of the new Code provides detailed factors to consider when deciding if dismissal is appropriate: the nature and requirements of the job, the seriousness of the misconduct and its effect on the business, whether progressive discipline might prevent recurrence, any acknowledgement of wrongdoing and willingness to comply with standards, and the employee’s circumstances including length of service, disciplinary record and the effect dismissal will have on them.

Generally, dismissal is only appropriate if continued employment is intolerable. You should consider whether the misconduct was a single instance or repeated behaviour after graduated discipline. The Code explicitly requires consistency, you must apply dismissal in the same way you’ve applied it to other employees in the past and consistently between employees who participate in the same misconduct.

Documentation Requirements: Keep Records or Face the Consequences

Section 13 is short but critical: “Employers should keep records for each employee specifying the nature of any disciplinary transgressions, the actions taken by the employer and the reasons for the actions.” This isn’t a suggestion, it’s an explicit requirement. When dismissal disputes reach the CCMA, what you can prove through documentation matters far more than what you remember happening.

You need records showing what misconduct occurred, what allegations were put to the employee, what their response was, what evidence was considered, what decision was made and why. For probation dismissals, you need records of evaluations, training provided, guidance given, and performance issues identified. For incapacity cases, you need evidence of the investigations conducted, alternatives considered, and consultations held. Get your documentation systems in order now, not after a dispute arises.

What Happens If You Get Dismissals Wrong

The consequences of unfair dismissal findings are severe. The CCMA or Labour Court can order reinstatement with back pay, or if reinstatement isn’t appropriate, compensation up to twelve months’ remuneration. Even if you avoid the maximum penalty, compensation awards are typically substantial, often ranging from six to ten months’ pay depending on the circumstances and the employee’s length of service.

Beyond direct financial costs, there’s the time and stress of defending CCMA cases, potential reputational damage that affects recruitment, impact on workplace morale when other employees see colleagues treated unfairly, and the risk of setting bad precedents that undermine your authority with remaining staff. Prevention through proper procedures is infinitely cheaper and less disruptive than dealing with the aftermath of unfair dismissals.

Why Now Is the Perfect Time for a Labour Law Compliance Audit

The introduction of the new Code creates a natural opportunity to review your entire labour relations framework. This isn’t just about compliance, it’s about risk management. A comprehensive labour audit identifies gaps between your current practices and legal requirements before they become disputes. You discover what policies need updating, what procedures need strengthening, what training your managers need, and what documentation systems require improvement.

Think of it as a health check-up for your business. You wouldn’t wait until you’re seriously ill to see a doctor, and you shouldn’t wait until you’re facing CCMA cases to address labour compliance issues. The audit process examines your disciplinary code, disciplinary procedures, employment contracts, probation policies, performance management systems, incapacity procedures, retrenchment protocols, and employee handbooks. You get a detailed report showing exactly where you stand and practical recommendations for addressing any problems identified.

Drafting Workplace Disciplinary Codes That Actually Work

Your disciplinary code needs to establish clear standards of conduct appropriate for your specific workplace. It should distinguish between serious misconduct warranting dismissal and lesser infractions requiring corrective discipline. Rules must be valid and reasonable, consistently applied, and communicated to employees in a manner that’s easily understood. Some standards are so well established that formal communication isn’t necessary, everyone knows theft and assault are unacceptable, but industry-specific or workplace-specific rules need explicit communication.

The form and content of disciplinary rules vary according to business size and nature. Larger businesses require more formal approaches, smaller employers may adopt less formal methods. What matters is that the standards are clear, employees understand them, and they’re applied consistently. Your code should list examples of misconduct at different levels of seriousness, the typical sanctions applicable at each level, and how progressive discipline will be applied for repeated offences.

Customised Disciplinary Procedures for Your Business

Generic template procedures downloaded from the internet rarely work well in practice because every workplace has unique characteristics. Your procedures need to reflect your business size, the nature of your workforce, whether you have union representation, the complexity of your operations, and your administrative capacity. A manufacturing plant with 500 unionised workers needs very different procedures than a professional services firm with 15 knowledge workers.

Effective procedures balance fairness with practicality. They must meet the requirements of the new Code while being simple enough that managers can actually follow them without constant HR intervention. They should specify when formal investigations are required versus when informal correction is appropriate, who has authority to impose different sanctions, what notification and representation rights employees have, how enquiries will be conducted, what evidence standards apply, how decisions will be communicated, and what dispute resolution mechanisms are available.

Management Training: Policies Only Work If Managers Follow Them

The best policies in the world are worthless if managers don’t understand or follow them. Most unfair dismissal cases arise not because company policies are deficient, but because managers don’t apply them correctly or don’t recognise when formal procedures are required. Your supervisors and managers need training on the principles underlying the new Code, your updated policies and procedures, the importance of consistency, documentation requirements, and when to seek HR or legal advice.

Training should be practical and scenario-based, focused on situations managers actually encounter. How do you handle an employee who’s chronically late? What steps are required before dismissing for poor work performance? What do you do when someone refuses a reasonable instruction? How do you investigate theft allegations? When is summary dismissal justified? What documentation do you need to keep? Managers who understand both the why and the how of fair procedures make better decisions and create fewer disputes.

How Laboured SA Can Help Your Business Stay Compliant

Laboured SA specialises in South African labour law compliance for businesses of all sizes. We understand that every employer faces unique challenges and we don’t believe in generic one-size-fits-all solutions. Our approach is to understand your business, your workforce, your operational realities and your specific risk areas, then develop customised solutions that actually work for your situation.

Our labour audit service provides comprehensive review of your entire labour relations framework against the new Code of Good Practice on Dismissal and other legislative requirements. We identify compliance gaps, assess risks, and provide detailed practical recommendations for addressing issues. If you need policies drafted or updated, we create disciplinary codes and procedures tailored to your workplace that meet legal requirements while being practical to implement. We provide management training that equips your team with the knowledge and confidence to handle discipline and dismissals correctly. And when labour relations challenges arise, we offer advice and representation to guide you through complex situations.

Take Action Before Problems Arise

The new dismissal code took effect immediately on 4 September 2025. Every day you continue using outdated procedures creates potential liability. The solution isn’t complicated or expensive, it just requires taking action now rather than waiting for a dispute to expose your vulnerabilities. Whether you need a full compliance audit, specific policy updates, management training, or ongoing labour relations support, Laboured SA can help.

Contact us today to discuss your needs and schedule a consultation.

Visit our website at www.laboured.org.za, email us at info@laboured.org.za, or call 082 330 3939 to speak with our Founder and Director, E W Swart.

We’ll explain exactly how we can assist your business, what the process involves, and what you can expect in terms of timing and investment. Don’t wait for a CCMA case to discover your procedures don’t meet current standards, protect your business now while solutions are straightforward to implement.

The new Code represents both challenge and opportunity. The challenge is updating your practices to meet enhanced requirements. The opportunity is strengthening your entire approach to labour relations, reducing disputes, building better employee relationships, and creating a workplace where fairness and efficiency support each other. Let Laboured SA partner with you to turn compliance into competitive advantage. Contact us today and let’s start the conversation about protecting your business while respecting employee rights under South African labour law.