On 22 January 2025, the Minister of Employment and Labour issued a draft Code of Good Practice: Dismissal (“draft Code”) for public comment.
The draft Code does not radically overhaul the existing Code of Good Practice: Dismissal, but it introduces refinements and simpler terminology aimed at making its content more practical and user-friendly, particularly for small businesses. The major changes in the draft Code are dealt with below.
Recognition of Small Businesses
The draft Code acknowledges the challenges faced by small businesses in handling dismissals and recognises that small employers may not have the capacity to conduct extensive investigations or implement complex disciplinary procedures.
Consequently, the draft Code accepts that smaller employers may adopt a less formal and practical approach to discipline.
The draft Code does not include a definition of “small business” but if regard is had to the Ministerial Determination No. 1: Small Business Sector issued under the BCEA in 1999, small business is defined as “employers with fewer than 10 employees”.
Determining the Sanction of Dismissal
Both the existing Code and the draft Code set out factors for determining whether dismissal is an appropriate sanction for misconduct, the draft Code introduces the following new considerations:
- The importance of the rule or standard in the workplace;
- The impact of the misconduct on the business; and
- Whether the employee acknowledges the misconduct and shows a willingness to comply with workplace rules in the future.
Although these factors are specifically mentioned, they are not new in the true sense as they have formed part of in our jurisprudence for some time.
Probation and Performance Dismissal
The draft Code clarifies that probation is meant to assess both “performance and suitability” of the employee. The existing Code only referenced performance.
Poor Work Performance
It is interesting that the draft Code makes no reference to the employee’s right to be represented in the pre-dismissal process, i.e. when the employee is given an opportunity to respond to the allegations of unsatisfactory performance. The current Code specifically states that the employee has the right to be represented.
The draft Code expands the factors that must be considered when dismissing an employee for poor work performance. A key addition is that decision-makers must assess whether the required performance standard was reasonably achievable.
For managerial, senior employees and employees with a high degree of skill where a departure from that high standard would have severe consequences justifying dismissal, the draft Code accepts that employers may not always be required to issue a prior warning before dismissal. This is a recognition that these employees should have the experience to assess their own performance without formal warnings. This, too, already forms part of our jurisprudence.
Incapacity
The concept of incapacity has been broadened. The existing Code primarily focused on ill health and injury whereas the draft Code acknowledges that incapacity can arise from other circumstances, such as:
- Imprisonment, which prevents the employee from fulfilling their duties; and
- Incompatibility, where an employee is unable to integrate into the company culture or work harmoniously with colleagues.
This is the first time that incompatibility has been expressly incorporated into the concept of incapacity.
Operational Requirements (Retrenchments)
The current Code does not address dismissals based on operational requirements, as this was covered separately in the Code of Good Practice on Dismissal Based on Operational Requirements. The draft Code now incorporates key principles related to retrenchments, including:
- Guidelines on what constitutes fair reason and fair process;
- A structured approach for retrenchment procedures; and
- A template for the section 189(3) notice, which ensures that retrenchment consultations are conducted with the necessary transparency.
Apart from the reference to small businesses, the draft Code essentially formalises considerations and concepts that are already being applied in dismissal cases. The changes proposed in the draft Code do not bring sweeping changes but are nevertheless a small step in the right direction.
