Substantively, the final Code mirrors the draft Code released for comment on 22 January 2025 (refer to our guideline here.

The Code provides comprehensive and practical guidance to employers, employees, and trade unions on key aspects of dismissals for misconduct, incapacity, and operational requirements (retrenchments) under the Labour Relations Act. The Code is general, allowing for departures in appropriate circumstances, particularly for small businesses.

In brief, the Code:

• confirms that dismissals are fair only if based on conduct, capacity or operational requirements and effected through a procedurally fair process;
• emphasises context-appropriate, increasingly corrective discipline, with dismissal reserved for cases where continued employment is intolerable;
• allows small businesses flexibility in applying disciplinary and consultation procedures;
• emphasises that the purpose of a fair procedure is to foster dialogue and reflection, reflecting the view of our courts regarding the informal nature of how disciplinary hearings should be conducted, thus signaling a legislative move towards a decriminalised approach to procedural fairness;
• confirms that, as a general rule, employees involved in similar misconduct under similar circumstances should receive comparable sanctions, but further affirms that if the misconduct irreparably damages the employment relationship, dismissal maybe fair, even if inconsistent with prior sanctions;
• provides guidance on: probationary periods (including a reasonable duration and a less onerous justification for non-confirmation), incapacity (including incompatibility, ill-health and poor performance) and participation in unprotected strikes (including the issuing of ultimatums and providing sufficient time to comply);
• provides that misusing probation as a mechanism to deprive employees of permanent employment status may constitute an unfair dismissal; and
• integrates retrenchment guidance, requiring written notice, good faith consultation on alternatives, fair and objective selection criteria, statutory severance, and preferential re-employment