Draft Code of Good Practice on Dismissal

Fairbridges Wertheim Becker Attorneys

The Minister of Employment and Labour has recently published a Draft Code of Good Practice on Dismissal (herein after referred to as ‘the Draft Code’). The Draft Code seeks to replace the existing Code of Good Practice relating to Dismissal as contained in the Labour Relations Act 66 of 1995 (‘the LRA’). The aim of the Draft Code is to give greater guidance with regard to the dismissal of employees.

Discussed here are some key changes which the Draft Code seeks to implement.

First and foremost, the Code takes cognizance of the reality faced by small employers/businesses and in this regard, it provides leeway to small employers when dismissing employees. It provides that small businesses do not have to apply the Draft Code strictly when it is not practical or feasible to do so, taking into account the prevailing circumstances in which the business operates in.

Another change that the Draft Code seeks to introduce is the extension of the guidelines for deciding a fair sanction for misconduct. In addition to the factors contained in the existing Code, the Draft Code provides two new factors that require consideration when determining whether a rule or standard was contravened, and this includes considering the importance of the rule or standard in the workplace as well as the actual or potential harm or damage caused by the employee’s contravention of the rule or standard.

The Draft Code emphasises that dismissal is an extraordinary sanction and should only be granted when the continued employment relationship is intolerable. In this regard, the Draft Code expands on factors that one should consider in assessing this. These factors include the effect of the misconduct on the business, whether progressive discipline might prevent a recurrence of the misconduct, and any acknowledgement of wrongdoing by the employee, as well as their willingness to comply with the employer’s rules and standards.

With regard to dismissals related to industrial action, the existing Code only provides that when one determines the substantive fairness of a dismissal in the context of a strike action, such determination should be done in the light of, inter alia, the seriousness of the contravention of the LRA, but it does not stipulate the factors one should consider in assessing the seriousness of the contravention. The Draft Code introduces new factors that should be considered when assessing the seriousness of the contravention, and this includes, the conduct of the parties to the dispute related to the strike and the conduct of any other person that has a bearing on the seriousness of the contravention, the legitimacy of the strikers’ demands, the duration and timing of the strike as well as the harm caused by the strike.

The existing Code only requires the employer, prior to the dismissal of a trade union representative or an employee who is an office-bearer or official of a trade union, to contact the relevant trade union to discuss the course of action it intends to adopt. The Draft Code now goes a step further and covers instances where there is no trade union involved and requires an employer to engage with the leaders or representative of the striking employees and this may be someone else other than a trade union.

Interestingly, the Draft Code also makes provisions for guidelines regarding dismissals based on operational requirements which are currently housed in a separate Code of Good Practice on Dismissal Based on Operational Requirements. The provisions of the Draft Code relating to operational requirements are clear and concise and also incorporate the developments in the law relating to operational requirements which have been crystalised by the Commission for Conciliation, Mediation and Arbitration (CMMA) and the Labour Court.

The Draft Code also consists of a useful annexure (Annexure A) which outlines the issues that a Notice of Possible Retrenchments should address, and this includes, the number and job categories of employees, reasons for the proposed retrenchments, alternatives, selection criteria, when the proposed retrenchments will take place, severance pay, assistance, re-employment and a requirement relating to employers with more than 50 employees.

Lastly, the Draft Code does promote a less formal disciplinary process for all sizes of employers, and this may simplify disciplinary processes significantly.

Overall, the Draft Code provides simplified and clear guidelines that are aimed at easing the burden on small employers who often find it difficult and time-consuming to fully comply with the procedural requirements for dismissals. The option offered by the Draft Code of a less formal procedure in respect of misconduct may free employers of the burden of protracted adversarial disciplinary enquiries. In this regard, the question remains, will the less formal approach advocated by the Draft Code lead to fair outcomes and whether this will ultimately reduce the number of unfair dismissal claims being referred to the CCMA, bargaining councils and the Labour Court?

The Draft Code is currently open for comment by members of the public who are invited to submit their comments on the Draft Code to the Department of Employment and Labour within 60 days from the date of its publication (22 January 2025).

Written by David Short | Director & Zethembe Manukuza | Candidate Attorney