4 September 2025 saw the implementation of the new Code of Good Practice: Dismissal (“the new Code”) replacing the long-standing Schedule 8: Code of Good Practice on Dismissal and the Code of Good Practice on Operational Requirements.
While much remains familiar and consistent, the new Code provides welcome clarity, flexibility, and consolidation of the existing legal framework relating to all three traditionally recognised grounds of dismissal in South African employment law (misconduct, incapacity, and retrenchment).
What follows is a basic legal primer for employers who must adapt swiftly—and thoughtfully—to the changes introduced by the new Code.
A unified framework: one Code to rule them all
Under the previous regime, dismissals for misconduct, incapacity, and operational requirements (retrenchments) were governed separately: misconduct and incapacity under Schedule 8, and operational requirements under a separate code. Now, all three categories are governed by a single, streamlined Code. This consolidation simplifies compliance and policy writing and employers can now refer to a unified source rather than multiple documents in formulating their workplace policies relating to dismissal.
Greater flexibility for small businesses
The new Code expressly acknowledges the realities of small or micro-employers, being those without established human resource infrastructure or in-house legal teams. It permits simplified, more informal, procedures in appropriate circumstances, particularly in disciplinary or consultative processes. For small business, the reduction of legal and practical formality presents a significant relief. It is, however, important to bear in mind that flexibility is permitted but is not mandatory. Employers remain bound by the principles of fairness and sound record-keeping.
Given the relevance and importance of the amendments introduced by the new Code to small businesses, please refer to our further article dealing specifically with the impact of the new Code on small enterprises.
Misconduct: a more nuanced assessment
The new Code adds depth to how misconduct is assessed and dealt with. It broadens the range of sanction-assessment factors, now including (a) the importance of the workplace rule breached by the employee; (b) the actual or potential harm caused by the employee’s misconduct; and (c) whether the employee acknowledged wrongdoing, and whether the employee has shown remorse and a willingness to comply going forward.
The new Code specifically recognises informal procedures, entitling employers to depart from rigid hearing models, which have historically tended to take on the character of formal criminal or civil trials, provided that fair opportunity and context are preserved
Language rights are strengthened, and employees are to be permitted to participate in misconduct proceedings in a language in which they are comfortable.
Probation and incapacity: broader, more practical definitions
The new Code expands on the issues of probation and incapacity in a number of key ways: (a) probation is no longer limited to evaluating performance; it now includes assessing an employee’s suitability for employment, including compatibility and conduct; (b) for unsatisfactory performance, the requirement to issue warnings may be waived for managers, senior employees, or those with highly specialised skills, where they can reasonably assess their own performance, and where burdensome poor work performance management processes may prove unnecessarily burdensome; and (c) the scope of incapacity is broadened to include imprisonment, and incompatibility with workplace culture or fellow employees.
Retrenchment
Historically, guidance on the substance of, and procedure to be followed in, retrenchments, was addressed in a separate code, the Code of Good Practice: Dismissal based on Operational Requirements. The new Code integrates all three recognised forms of dismissal into one source.
In respect of retrenchment, the new Code (i) outlines consultation requirements, selection criteria, severance pay, and re-employment preferences, and, usefully, includes a standard retrenchment-notice template; and (ii) provides practical guidance in respect of the employer’s obligations to conduct consultations in good faith, to explore alternatives, and to document the process fully.
How does the new Code impact employers?
In light of the implementation of the new Code, employers should take the necessary steps to ensure that (a) their human recourse policies and disciplinary codes are updated to align with the new code, particularly insofar as these policies and codes relate to probation, incapacity, small-business procedures, and retrenchment templates; (b) managers and human resources teams are upskilled and trained in relation to, amongst other things, the broadened misconduct criteria, informal procedures, language rights, and retrenchment guidelines; (c) fair, context-appropriate procedures are implemented, especially where there is scope for a more informal approach to be utilised; and (d) that comprehensive records are maintained in order to safeguard the employer in the event of future disputes.
Should you require any assistance with implementing the necessary internal changes brought about by the new Code, contact our offices and our experienced attorneys will happily assist.