The Code of Good Practice has been updated in 2025 to provide small business in South Africa with more power when it comes to dismissals in the workplace. However, with more power comes more responsibility to ensure a fair process in followed.
At Welman Attorneys Inc. we assist our customers with guidance on a weekly basis to ensure the process is fair towards not only the business, but also towards the employee.
Our quick reference guide for manager’s was developed to ensure small business comply with the legal requirements.
1. What And Who This Guide Is For
This guide helps small business owners and managers handle:
- Misconduct
- Poor performance
- Probation problems
- Incapacity (illness/injury/incompatibility)
- Retrenchment (operational requirements)
This needs to be done in a way that is legal, fair, and practical, even if you have no HR department.
2. Small Business Principles (2025 Code)
The 2025 Code now recognises small businesses and allows simpler processes as long as things are still fair.
You do NOT need
- A formal chairperson
- A written charge sheet
- A lawyer-like disciplinary hearing
- A full HR policy manual
You DO need
- To treat people fairly
- To tell the employee what the problem is
- To hear their side
- To give them a reasonable chance to improve
- To keep simple written notes
3. Misconduct: Step-by-Step for Small Businesses
Misconduct is when an employee broke a rule or acted badly. The following are steps to guide you when conducting an enquiry into misconduct by an employee.
Examples of misconduct
- Absenteeism
- Theft or fraud
- Fighting
- Insubordination
- Poor behaviour
- Harassment
- Repeated lateness
Step 1: Have a quick investigation
This can be very basic:
- Speak to people
- Check the facts
- Look at footage if available
- Write down what you found
Step 2: Invite the employee to a “Misconduct Discussion”
Use simple language:
“I need to talk to you about a workplace issue. You can bring a co-worker if you want.”
Give them:
- The allegation
- A short description
- Copies of any evidence
- Time to prepare (even 1 to 2 hours is fine in small businesses)
Step 3: The meeting
Keep it conversational and use the following basic procedure for the meeting:
- Explain the issue to the employee
- Let the employee tell their side of the story
- Ask questions
- Consider everything
- Decide on a fair action
Step 4: Decide on the outcome
Possible outcomes after of during the meeting could be:
- Issue the employee with a verbal warning
- Issue the employee with a written warning
- Issue the employee with a final warning
- Dismissal of the employee (only if serious or repeated)
Note that dismissal of an employee is only fair if:
- The misconduct is serious enough, OR
- The trust relationship is broken, OR
- The employee ignored previous warnings
Step 5: Give the outcome in writing to the employee
Keep it short and simple:
“After our meeting today, you are issued a written/final warning for ___.”
OR:
“Your employment is terminated due to serious misconduct.”
Keep a copy of your communication and ensure it contains the dates of the allegations, when the employee was informed of the allegations and meeting, when the meeting took place, and the date the employee received the outcome.
4. Performance Problems (Poor Work Performance)
Performance relating to problems and poor performance is when the employee can’t do the job properly, even if they are trying. The following steps is a guidance on how to address this situation.
Step 1: Tell them what’s wrong
Keep your grievance relating to poor work performance clear:
- Explain to the employee what they must improve
- Explain what “good performance” looks like and what is expected of them
Step 2: Provide guidance and training
This can be achieved by:
- Showing the employee how to do the required work
- Pairing the employee with someone to assist
- Provide the employee with written instructions
- Checking-in regularly with the employee
Step 3 - Provide reasonable time to improve
Depending on the job requirements and the improvement needed:
- 1 to 4 weeks is typical for small businesses
Step 4: Have a follow-up meeting
- If they improved → problem solved.
- If not → warning or dismissal.
Step 5: If standard are still not met
Call a meeting with the employee and:
- Explain the ongoing issue
- Allow them to respond
- Decide on warning or dismissal
5. Probation Problems
Probation is a testing period for employees, not a free pass to dismiss them.
Employers must:
- Guide the new employee
- Explain performance expectations
- Warn them early if there is a problem with their performance
- Provide them with a chance to improve
- Allow them to make representations before dismissal
The 2025 Code allows lower thresholds for probation dismissals compared to permanent staff.
6. Incapacity (Illness, Injury, Incompatibility)
There are 3 types of incapacity:
- Ill health or injury
- Other incapacity (e.g., imprisonment)
- Incompatibility (employee disrupts the workplace or cannot work with others)
Step 1: Identify the incapacity
Is the employee:
- Sick long-term?
- Unable to do their job because of injury?
- Refusing to take or perform the responsibilities?
- Causing conflict?
Step 2: Consult with the employee
Ask the employee:
- What’s going on?
- How long will they be absent?
- Can they continue working?
- Do they need adjustments?
Step 3: Look for alternatives
Examples to consider:
- Changing the duties of the employee
- Changing work hours of the employee
- Reassigning tasks of the employee
- Short-term time off for the employee
Step 4: If no alternatives exist
Hold a meeting with the employee and keep notes:
- Explain the issue
- Ask for their views
- Decide whether dismissal is fair
7. Retrenchment (Operational Requirements)
The 2025 Code of Good Practice provides clear guidance for small business retrenchments.
Step 1: Give written notice
Explain to the employee(s):
- The reasons for retrenchment
- Which positions are affected
- Timing
- Possible alternatives
- Proposed severance
- Selection criteria (e.g., skills OR LIFO)
Step 2: Consultation
Even a single meeting with employees affected counts.
Discuss the following with them:
- How to avoid dismissal
- How to reduce the number
- Timing
- Possible alternatives
- Proposed severance
Step 3: Final decision
After considering all inputs from employees, make the final decision.
Step 4: Notice of termination
Step 5: Pay severance
Minimum: 1 week’s pay per completed year of service
What Small Businesses Must Remember
Whenever you are engaging with employees on dismissals, performance meetings and/or retrenchment consultation, always keep the following in mind.
- You can keep things simple, but it must be fair
- Always talk to the employee first
- Always listen to their side
- Always give reasonable time to fix performance issues
- Always keep basic written notes
- Dismissal should be a last resort
Should you require any assistance with this process, please contact Welman Attorneys Inc. for a consultation.
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