South Africa’s labour landscape has just shifted. On 4 September 2025, the new Code of Practice for the Dismissal of Employees was gazetted, replacing both the long-standing Schedule 8 Code of Good Practice and the Code on Operational Requirements.
This is more than a technical update, it’s a reset of how dismissals must be approached. The Code provides practical guidance for employers, employees, and trade unions on misconduct, incapacity, and retrenchments under the Labour Relations Act. While it largely mirrors the January 2025 draft, its final form carries strong messages for business.
The Code reinforces that termination is only appropriate when continued employment is intolerable. Employers are now expected to engage in genuine dialogue, consider alternatives, and follow processes that are fair, transparent, and context-appropriate. For smaller businesses, there is welcome flexibility, but the principles of fairness and consistency still apply.
Notably, the Code emphasises that fair procedures are designed to foster reflection and dialogue, rather than burdening businesses with rigid, court-like hearings. At the same time, it reminds employers that sanctions must be consistent, unless misconduct has so deeply damaged the relationship that dismissal is the only viable option.
The Code also speaks directly to modern workplace challenges:
- Probation must be fair, time-bound, and not abused to avoid permanent employment.
- Incapacity now explicitly covers incompatibility, poor performance, and ill-health, with guidance on how to manage each.
- Retrenchments must involve written notice, good-faith consultation, fair selection criteria, statutory severance, and preferential re-employment where possible.
While the new Code offers some flexibility, particularly for smaller businesses, it also sets a tougher standard. Employers must be able to show that any dismissal is both substantively justified and procedurally fair, applied in a way that is appropriate to the context. Those who fail to align with the Code’s requirements face the risk of unfair dismissal findings, costly compensation awards, and reputational harm.
If you would like guidance on how these changes affect your workplace, or to review your current procedures, you may contact me at robynj@caf.co.za or on 021 487 7900 for assistance
This article is a general information sheet and should not be used or relied on as legal or other professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your legal adviser for specific and detailed advice. Errors and omissions excepted (E&OE).