The Department of Employment and Labour has published a new Draft Code of Good Practice on Dismissals. The Draft Code was gazetted in accordance with the Labour Relations Act (LRA) on 21 January 2025. Interested parties will have 60 days, until 22 March, to submit their proposals to the Department of Employment and Labour.
The Draft Code needs to be read together with the existing Code of Good Practice: Dismissal and does not replace it.
For purposes of this note, only content which is not already dealt with in the existing Code is highlighted.
This Code of Good Practice provides guidance to employers, employees, trade unions and persons applying the Code on how the legal obligations under the Act regarding dismissals for misconduct, incapacity and operational requirements apply to employers and employees.
Small businesses
The Draft Code tries to alleviate and simplify some of the existing requirements relating to fair dismissal in relation to small businesses. For example, the number of employees employed in an establishment may warrant a different approach to disciplinary procedures. It states the Code should not be interpreted as requiring small businesses to comply with obligations that are not practical or feasible for their operation. It further states that any person determining the fairness of a dismissal should consider, in addition to any other guidelines set out in the Code, the circumstances in which small businesses operate. For example, small businesses cannot reasonably be expected to engage in time-consuming investigations or pre-dismissal processes while at the same time keeping the business going. The form and content of disciplinary rules and procedures may vary according to the size and nature of the employer’s business. Smaller employers may adopt a less formal approach to discipline.
Comment:
It is commendable that an effort is made to alleviate the onus on small businesses to follow overly formal and cumbersome procedures in managing misconduct. However, the Draft Code provides no guidance or criteria to assist in this regard. In the absence of criteria or guidance, there is a risk that such an open-ended approach may in fact increase CCMA referrals and litigation. This will defeat the objectives of the Draft Code.
Dismissal: Fair procedure
Usually, before a decision is taken to dismiss, the employee should be –
- Notified of the allegations of misconduct, preferably in writing;
- Given an opportunity within a reasonable period of time to prepare and make representations on both the misconduct allegations and the appropriate sanction;
- Allowed the assistance of a fellow employee or trade union representative;
- Where reasonably possible, provided with the opportunity to converse in a language that the employee is comfortable with.
Comment
At first glance, it seems as if the requirements listed in (a) – (d) are limited to dismissal matters. We do not think this was the intention. The LRA determines that any unfair conduct in relation to disciplinary steps short of dismissal constitutes an unfair labour practice. This requirement remains as warnings need to be issued in a fair manner.
Dismissals and industrial action
The process before dismissal should include the following—
- The employer should, at the earliest opportunity, contact a trade union official to inform the trade union about the strike so as to afford the trade union an opportunity to consult with the striking employees.
- The employer should consider representations by the official and discuss the course of action it intends to adopt with the trade union.
- If there is no trade union involved, the employer should seek to engage with leaders or representatives of the striking employees.
- The employer should issue an ultimatum in clear and unambiguous terms that should state what is required of the employees and what sanction will be imposed if they do not comply with the ultimatum.
- The employees should be allowed sufficient time to reflect on the ultimatum and respond to it, either by complying with it or rejecting it.
- If an employer issues an ultimatum to employees engaged in an unprotected strike, it may not be fair to dismiss employees for participation in that strike who obey the ultimatum and return to work within the stipulated period.
- If participating employees reject an ultimatum, the employer may dismiss the employees after considering the conduct and any representations of the employees in accordance with the provisions of this Code.
- In cases of collective misconduct, the employer may, depending on the circumstances, satisfy the requirements of procedural fairness by calling for collective representations.
- If the employer cannot reasonably be expected to extend any of these steps to the employees in question, the employer may dispense with them.
Comment
The guidelines provided are useful and in line with requirements established in case law.
Probation: General and Decision not to confirm appointment
An employer may require a newly hired employee to serve a period of probation before the employee’s appointment is confirmed.
An employer may only decide to dismiss an employee or extend the probationary period after the employer has given the employee the opportunity to make representations and the employer has considered any representations made.
Comment
These guidelines are useful and address any uncertainties which may have existed in this regard. It should be noted that any extension of a probation period requires the employee’s consent. This may become an issue when a manager failed to address concerns during the probation period and wants to extend the probation period for this reason.
Incapacity: Guidelines in cases of dismissal for poor work performance
Depending on the circumstances, an employer may not be required to warn an employee that if their performance does not improve, they might be dismissed. This may be the case for managers and senior employees whose knowledge and experience enables them to judge whether their performance is adequate and employees with a high degree of professional skill where a departure from that high standard would have severe consequences justifying dismissal.
Comment
The guideline suggests that engaging with a senior employee regarding unsatisfactory performance on occasion may suffice as a “warning” that his/her job may be on the line.
Incapacity: III health, injury and other forms of incapacity
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.
Comment
Specific reference to incompatibility as a category of incapacity and therefore as a ground for dismissal is made for the first time. This is welcomed as it brings certainty.
Operational requirements – Fair procedure – Written notice
When an employer contemplates the possibility of retrenchments, it must initiate a process of consultation by giving a written notice.
Comment
The written notice seems to be peremptory, contrary to recent case law. In any event, it always has been best practice.
Consultation
The employer must consult in good faith by keeping an open mind and seriously considering any proposals put forward by the union or employees.
Comment
The LRA requires the parties to engage in a “meaningful joint consensus-seeking process and attempt to reach consensus”.
The guideline tries to clarify this requirement by introducing the wording “must consult in good faith”. It seems as if this qualification narrows the meaning of “meaningful joint consensus-seeking process”, as the latter is not limited to only consulting in “good faith”. In our view this guideline is not useful.
The period of consultation
If section 189A Act is applicable, the minimum period for consultations is 60 days; however, a consulting party may not unreasonably refuse to extend the period of consultation if such an extension is required to ensure meaningful consultation.
Comment
This requirement is taken verbatim from s189A(2)(d) and makes no contribution.
S189 Notice
The Draft Code’s proposed Annexure A also states that notices given in terms of section 189 of the LRA should be given in the form prescribed in Annexure A.
Comment
The guideline brings clarity on the content of the s189 notice.
Summary
- Some of the new guidelines in the Draft Code are useful and brings clarity on a number of matters.
- A disappointing aspect is the failure to clarify and provide more guidance on the relief from following extensive and formal procedures by small businesses. The lack of guidance is likely to result in more challenges at the CCMA.
- In the whole, the Draft Code is disappointing and fails to address the key issue it set out to do.
© Maserumule Corporate Employment Law – January 2025