Dept of Employment & Labour: New 2025 Code of Good Practice – Dismissal

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Dept of Employment & Labour: New 2025 Code of Good Practice – Dismissal

• 01 October 2025
• Law
• South African Accounting Academy

Summary:

The Department of Employment and Labour has published the new Code of Good Practice on Dismissal, with its purpose to provide guidance on how the legal obligations under the Labour Relations Act 66 of 1995 (LRA) regarding these dismissals apply to employers and employees. 

Article:

The Code is effective from 4 September 2025 and aims to refine and clarify standards for dismissals in the workplace. In addition, the Code introduces several modifications in structure and content, addressing issues ranging from probation to operational requirements. Refer to our previous alert dated 19 February 2025

The New Code largely expands on principles from the repealed codes while also introducing several modifications. Key aspects include enhanced flexibility for small businesses, broader evaluation of probation to include "suitability for employment," more detailed guidelines on dismissals for misconduct and incapacity, and a unified framework for all types of dismissals, including those for operational requirements (retrenchments).   

In respect of employers, the New Code:

• seeks to expand on and clarify principles in the repealed codes, introduces new developments and codifies relevant judicial precedent, without compromising on the principles of fair labour practice.
• also provides a welcome reprieve to small employers which may have historically struggled to meet the previous thresholds for fair labour practice.

With immediate effect, employers should be guided by the New Code to ensure that they have a fair reason and follow a fair procedure before dismissing any of their employees.

The publication of the Code repeals the previous Schedule 8 Code of Good Practice on Dismissal and the Code of Good Practice Based on Operational Requirements.

The New Code repeals and replaces the old Code of Good Practice: Dismissal and the Code of Good Practice Based on Operational Requirements, consolidating dismissals for misconduct, incapacity and operational requirements into one code.

Contents:

• Part A – Introduction
• Part B – Dismissal
• Part C – Fair dismissal
• Part D – Misconduct
• Part E – Probation
• Part F – Incapacity
• Part G – Operational requirements
• Annexure A – Notice of possible retrenchments

Click here to download the 16-page Gazetted notice and new Code of Good Practice:

https://www.gov.za/sites/default/files/gcis_document/202509/53294gen3470.pdf 

Relevance to Auditors, Independent Reviewers & Accountants:

• The Labour Relations Act is yet another piece of legislation that your clients must comply with, and which you must assess compliance with.  If they don’t comply with the relevant laws and regulations, you have certain reporting obligations in terms of NOCLAR (NOn-Compliance with Laws And Regulations) – this could include reporting to management, qualifying your audit opinion, reporting a Reportable Irregularity, etc.
• Employers and employees should be aware of the latest codes of good practice that have been published to provide guidance regarding dismissals for misconduct, incapacity and operational requirements, as this applies to employers and employees.
• As an employer, you also need to comply with the Labour Relations Act, and must comply with all relevant sections and codes of good practice.

Relevance to Your clients:

• An employer has a duty to comply with the Labour Relations Act, and must comply with all relevant sections and codes of good practice.
• Employers and employees should be aware of the latest codes of good practice that have been published to provide guidance regarding dismissals for misconduct, incapacity and operational requirements, as this will apply to employers and employees.

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