New dismissal code: critical changes reshaping South African labour law

While labour unions are up in arms over the new Draft Code on Good Practice on Dismissal, recently released by the Ministry of Employment and Labour for public comment, which they say gives employers more flexibility when dealing with dismissals, legal experts say that the changes in the draft code do not invalidate the Labour Relations Act (LRA).

This was revealed after the General Industries Workers Union of South Africa (Giwusa) and 29 other organisations made a joint submission to the Employment and Labour Portfolio Committee, warning about the “dangerous” changes to employment and labour laws. Giwusa is affiliated with the South African Federation of Trade Unions (Saftu).

Mametlwe Sebei, Giwusa president, said they are concerned that the new draft code gives employers more flexibility in dealing with dismissals, removes ‘rigid’ procedural requirements for dismissals, and introduces a more flexible approach to probation.

They added that the draft code also provides greater procedural flexibility for employers, it promotes a less formal disciplinary process for all sizes of employers, in particular for small businesses, expands the grounds for incapacity dismissals, and understates workers’ rights in relation to dismissals.

“If these amendments become law, the capitalist class will have succeeded in achieving the reform of the labour market it has been calling for. And it will have achieved its objectives with the conscious support of the trade union bureaucracies,” Sebei said.

He added that while the draft code does not override existing legislation and case law, it nevertheless provides a guideline to and an elaboration of existing labour law jurisprudence. 

“There are some positive changes for workers, but on the whole, the draft code is pro-employer and codifies many of the conservative court judgments relating to dismissals,” he said.

Labour law experts say that the draft code expands on the current code, provides clearer guidelines and flexibility for both employers and employees, and introduces several new aspects, but flagged some parts that need definition to avoid ambiguity.

Dr Rowena Bernard, a senior lecturer at the University of KwaZulu-Natal’s School of Law, said the draft code sets out that smaller businesses may adopt a less formal approach to discipline, but this might pose a challenge as a definition of a small business is not set out and neither is it established what would constitute a less formal approach.

This is left to the discretion of the employer and could result in procedural irregularities.

“Section 5(5)'s requirement that medium and large employers adopt written disciplinary rules and procedures seems to suggest that this does not apply to smaller employers. This is a concern, as employees regardless of the type of employer they work for should know the rules in place and the consequences for a breach. The disciplinary rules are meant to create orderly behaviour and certainly in the workplace,” she said.

She added that the flexibility introduced with the probation requirements could be problematic as it is now easier for employers to terminate employment contracts during this period.

“The supervening impossibility of performance and incompatibility were previously not included as forms of incapacity. Section 21 (6) and (7) now recognise that incapacity may arise from other circumstances which prevent an employee from performing their duties such as imprisonment. These two forms of incapacity are now recognised as a form of incapacity which may justify a fair dismissal.”

Bernard said the draft code allows employers to deviate from the processes and procedures but these may only occur under exceptional circumstances. 

“This implies that employers as far as possible must comply with their own disciplinary rules and procedures, as these are meant to create certainty, uniformity, consistency, and an orderly workplace. Also, while deviation is permissible, consistency as set out in Section 10 is necessary when determining the appropriateness and fairness of a dismissal. Failure to act consistently will impact on the fairness of a dismissal,” she said.

Section 12 provides that participation of employees in (unprotected) strikes that do not comply with the provisions set out in the LRA is misconduct but acknowledges that such action will not always result in dismissal.

This section expands on the current code by setting out factors that employers should consider in determining the substantive fairness of the dismissal, she said. 

“This is progressive as it illustrates that employees cannot simply be dismissed for participating in an unprotected strike, it offers better protection to employees. Section 12(3) also sets out the procedural requirements an employer should follow before dismissing an employee for participating in an unprotected strike. This inclusion is a refreshing introduction and places an obligation on employers to ensure substantive and procedural fairness before dismissing employees,” Bernard said.

Dr Louis Koen, a lecturer at the University of Johannesburg’s Department of Public Law, said the draft code is similar to the existing Code of Good Practice in several respects, however, part of the concern highlighted likely arises in a shift in language used in relation to misconduct dismissals.

“Whereas the current iteration emphasises that it is not generally appropriate to dismiss an employee for a first offence except if the misconduct is serious, the draft code does not contain this language albeit that it still refers to serious misconduct when speaking of dismissal.

“The draft code also continues to speak of ‘graduated disciplinary measures’. The other change in the draft code is a strong emphasis on small businesses not complying to the same extent. This is not unfamiliar to the current code but certainly not emphasised to the same extent,” Koen said.

He said for employers, the draft code requires more than proof of serious misconduct, the employer must also prove that the serious misconduct has rendered the continuation of the employment relationship intolerable. 

Giwusa, which said it represents 23% of the workforce, also alleged that it was excluded in the National Economic and Labour Council (Nedlac) negotiations; instead trade union bureaucracies, technocrats, and lawyers determined what was good for the mass of workers. 

Sebei said the new draft code is a product of the negotiations in the Nedlac, which began in April 2022 and was completed in October 2024.

Boyce Maneli, chairperson of the Employment and Labour Portfolio Committee, encouraged interested parties to negotiate their positions, engage with others, and debate the matters at a level where these are taking place. 

“Labour Law Reforms are being deliberated by many other forums, some have trade unions as participants, platforms such as Nedlac. Processing of these Labour Law Reforms even before they get to Parliament in general, and to the Portfolio Committee on Employment and Labour in particular, will pass through the Cabinet. So, they are not even at Cabinet level yet.

“But, I must hasten to state that when parliamentary committees deal with pieces of legislation, these also get subjected to public participation. Interested parties, organisations, and individuals are provided an opportunity to make their submissions to Parliament at a time when it is this organ of state that must process any law further. That time has not come yet,” Maneli said.

gcwalisile.khanyile@inl.co.za