In a recent article, we broadly addressed the relevant effects of the new Code of Good Practice Dismissal (“the new code”) and the ways in which it amends, and in many instances, improves upon, the legal approach to dismissals adopted by the previous version of the new code and the Code of Good Practice on Operational Requirements (collectively “the previous codes”).

In this article, we will be focusing on the specific effects of the new code on small business, and the methods employed to lessen the administrative and legal obstacles historically faced by small enterprises when faced with dismissal-related issues in the workplace.

Recognition of limited resources

The previous codes assumed that all employers had the time, money, and human resources expertise to conduct formal disciplinary hearings, keep detailed records, and follow rigid legally formal procedures. For small businesses, this was often unrealistic. The new code explicitly acknowledges the constraints of small and micro-employers. It permits employers to adopt less formal, simplified procedures, without automatically risking a potential finding of unfair dismissal in the event of an aggrieved employee referring a complaint to the CCMA.

Informal disciplinary procedures

Under the previous codes, even minor transgressions / instances of misconduct technically required a structured disciplinary enquiry, with formal notice, witnesses, and representation. This, plainly, was burdensome and unattainable for most smaller organisations.

The new code now expressly recognises that a less rigid, more informal approach to certain workplace situations can be legally compliant, provided that fairness is maintained. For example, instead of holding a protracted, operationally disruptive hearing for an instance of employee lateness, a small employer could meet with the employee, explain the problem, allow them to respond, and record the discussion.

Probation and suitability

The new code widens the purpose of probation beyond mere performance-assessment. Under the new code, employers may also assess whether the employee is compatible with the broader team, whether they demonstrate appropriate conduct, and whether they are generally suited for the character and culture of the organisation.

This flexibility allows small businesses, where every employee plays a vital role, to address mismatches swiftly, efficiently, and, crucially, lawfully.

Managers and specialists – reduced burden of warnings

Under the previous codes, employers were required to subject employees to poor work performance management processes, issue warnings, and provide training before being in a position to lawfully dismiss for poor performance.

The new code creates important and pragmatic exceptions. Managers, senior staff, or highly skilled specialists may be dismissed without a drawn-out incapacity process if it is clear they should have been able to assess and manage their own performance.

This means small businesses are not trapped in prolonged processes with employees who clearly cannot deliver at the required level.

Integration of retrenchment guidance

For operational dismissals, small businesses now have one reference document instead of having to consult two separate codes, being the previous codes. The new Code includes Annexure A, a standard, section 189 compliance, retrenchment notice template. This makes it easier for small businesses to comply with legal consultation requirements without paying for complex external drafting.

Language and accessibility

The new code also requires that employees should be engaged in a language they understand. For small businesses with diverse staff, this reduces miscommunications, misunderstandings, and potential disputes, as employers are encouraged to use plain, accessible communication rather than technical legal jargon.

Practical impact

In practice, this means that:

  • A small employer can call an employee into a meeting instead of setting up a full hearing.
  • They can keep, and later rely on, notes rather than lengthy transcripts of the internal proceedings.
  • They can use a template retrenchment notice instead of creating one from scratch, or incurring the potentially unjustifiable costs in having a labour lawyer preparing the notice.
  • They can more easily end probation, and thus employment, if the employee is found to be unsuitable on grounds extending further than poor performance.
  • The new code aligns the law with the realities of running a small business, reducing procedural red tape while still requiring fairness, respect, and diligent documentation. Employers gain efficiency and lower compliance costs, while employees remain protected against arbitrary treatment.

Should you require any assistance with implementing the necessary internal changes brought about by the new Code in your small to medium business, contact our offices and our experienced attorneys will happily assist.