Labour law in South Africa is evolving once again, with the Department of Employment and Labour’s Draft Code of Good Practice on Dismissals set to reshape how retrenchments and dismissals are handled. Published on 21 January 2025, this draft brings significant changes that employers must prepare for now.

Workforce restructuring is already a complex and high-risk process, and these reforms add new layers of compliance. A misstep in retrenchments or dismissals could expose businesses to costly legal battles and reputational damage. Employers who stay ahead of the curve will not only protect their businesses but also strengthen their resilience in an evolving labour market.

Key changes employers must understand

1. Fair process above all

The draft code reinforces procedural fairness as the foundation of dismissals. Employers must ensure that before termination, employees have a fair chance to engage, respond, and reflect—even in cases where dismissal may seem inevitable.

• For employers, this means:

  More structured HR protocols—hasty dismissals will carry greater legal risk.

• Stronger employee engagement requirements—consultations and responses must be documented.
• Clear, transparent processes—procedural missteps could result in dismissals being overturned.

2. Informal investigations: more flexibility or more risk?

A notable shift in the draft is the introduction of informal investigation procedures. Instead of rigid, formal inquiries, employers can tailor investigations based on:

• The size and structure of their business.
• The severity and frequency of the misconduct.
• The operational context in which the issue arises.

While this offers more flexibility, it also introduces uncertainty. How informal is too informal? Without legal clarity, employers must still ensure fair, unbiased, and well-documented investigations to avoid disputes.

3. Retrenchment and operational requirements: what’s changing?

Dismissals due to operational requirements (retrenchments) are now integrated into the broader Code of Good Practice on Dismissals. This means:

• A more structured approach—economic, technological, or structural retrenchments must follow clearer procedural steps.
• Stronger emphasis on employee consultation—businesses must prove that employees were given meaningful participation in the process.
• Greater legal scrutiny—employers must justify retrenchments with solid evidence to withstand potential legal challenges.

If your business is considering restructuring, now is the time to review retrenchment policies to ensure compliance with these evolving requirements.

4. Standardised retrenchment notices (Annexure A)

A major administrative shift is the introduction of Annexure A, a standardised form for retrenchment notifications under Section 189 of the Labour Relations Act.

For employers, this means:

• Less discretion in structuring retrenchments—standardised procedures will leave little room for interpretation.
• More documentation requirements—completing the notice correctly will be critical.
• Stronger compliance checks—failure to follow the new format could invalidate retrenchments.

Employers should familiarise themselves with this new process to avoid unnecessary risks.

What this means for employers

These changes reinforce the growing legal and compliance pressures on businesses. The days of quick dismissals or loosely structured retrenchments are over. Employers must tighten their HR frameworks, improve record-keeping, and ensure leadership teams understand the legal shifts.

Here’s what businesses should do now:

• Audit current dismissal and retrenchment policies to ensure alignment with emerging regulations.
• Train HR and leadership teams to handle dismissals with fairness and compliance in mind.
• Prepare for a more structured retrenchment process, ensuring transparency and adherence to procedural fairness.

The labour landscape is shifting, but employers who act proactively will stay ahead. These changes don’t just signal more regulation—they offer an opportunity to build stronger, more resilient workplaces. (SA)UEO and its organisers are here to support you through these changes.

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