UNFAIR DISMISSAL IN SOUTH AFRICA: LEGAL PROCESSES AND PRACTICAL TIPS
- Wendy
- Oct 16
- 5 min read
Updated: 1 day ago
Unfair dismissal continues to be one of the most prevalent and costly challenges facing South African employers under labour law. While South African labour law has always required both a valid reason and a fair procedure for dismissals, the 2025 Code of Good Practice: Dismissal refines and clarifies these requirements. It introduces a more flexible, context-sensitive approach, while still holding employers to the principle that dismissal must be both substantively and procedurally fair.
Why Unfair Dismissal Compliance Is Critical
Every dismissal, whether based on misconduct, incapacity, or operational requirements, must satisfy both substantive and procedural fairness. The updated Code underscores the principles of flexibility, proportionality, and meaningful engagement, particularly for smaller enterprises, while maintaining the foundational standards of fairness throughout the dismissal process.
What Counts as an Unfair Dismissal in South Africa?
Under South African labour law, not every termination of employment is unlawful – but if it is not supported by a valid reason and a fair process, it will be considered an unfair dismissal.
Legal Definition of Dismissal (Section 186 of the Labour Relations Act)
Section 186(1) of the Labour Relations Act (LRA) 66 of 1995 (as amended) sets out what constitutes a dismissal. It includes:
■ Termination of employment by the employer, with or without notice.
■ Failure to renew a fixed-term contract where the employee had a reasonable expectation of renewal on the same or similar terms.
■ Renewal on less favourable terms despite a reasonable expectation of renewal on the same terms.
■ Constructive dismissal – where an employee resigns because the employer made continued employment intolerable.
■ Selective re-employment – where an employer refuses to re-employ a former employee, without a fair reason, whileoffering re-employment to others.
■ Failure to allow an employee to resume work after maternity leave.
When Is a Dismissal Unfair? (Section 188 of the LRA)
According to section 188, a dismissal is unfair unless the employer can prove:
■ Substantive Fairness: That there was a valid and fair reason for the dismissal, related to misconduct, incapacity (including poor performance, ill health, or incompatibility), or operational requirements (retrenchments/ restructuring).
■ Procedural Fairness: That a fair process was followed, giving the employee the opportunity to respond to allegations, be heard at a hearing, and be treated consistently.
Automatically Unfair Dismissals (Section 187 of the LRA)
Certain dismissals are automatically deemed unfair, regardless of process, if they are based on prohibited reasons. Examples include:
■ Dismissal for discriminatory reasons such as race, gender, pregnancy, or religion.
■ Dismissal for union membership, participation in union activities, or protected strike action. ■ Dismissal for asserting a statutory right under the LRA.
Practical Implication for Employers
Employers must ensure that every dismissal satisfies both substantive and procedural fairness. The 2025 Code of Good Practice: Dismissal refines this requirement by emphasising:
■ Flexibility – procedures may vary depending on the size and resources of the employer.
■ Proportionality – dismissal should be a last resort, with lesser sanctions considered first.
■ Meaningful Engagement – even smaller employers must give employees a real opportunity to state their case. Failure to comply exposes employers to CCMA disputes, reinstatement orders, or compensation awards.
Automatically Unfair vs Procedurally/Substantively Unfair Dismissals
■ Automatically Unfair Dismissals: These include dismissals for reasons such as union membership, pregnancy, or exercising legal rights. These are strictly prohibited and attract severe penalties.
■ Procedurally Unfair Dismissals: Even if there is a valid reason, failing to follow a fair process (e.g., not giving notice or a chance to respond) makes the dismissal unfair.
■ Substantively Unfair Dismissals: If the reason for dismissal is not fair or valid (e.g., dismissing for minor infractions or without evidence), the dismissal is unfair.
Common Mistakes Employers Make
Common errors made by employers include omitting warnings or counselling for poor performance except in cases of serious misconduct, failing to provide clear and timely notification to employees, applying disciplinary measures inconsistently among staff, and neglecting to maintain accurate and comprehensive records.
Step-by-Step Process for Employers
This step-by-step guide explains how to conduct lawful dismissals under the LRA and the 2025 Code of Good Practice: Dismissal. Following this structured approach ensures compliance with South African labour law and minimises the risk of unsuccessful dismissal disputes.
Step 1 – Identify Grounds for Dismissal South African labour law recognises three primary grounds for dismissal:
■ Misconduct: e.g. theft, insubordination, or breach of policy.
■ Incapacity: covers poor performance, ill-health, or incompatibility with the role. The 2025 Code explicitly recognises incompatibility (where an employee cannot fit into the role or team) as an incapacity matter.
■ Operational Requirements: retrenchments based on economic, technological, structural, or similar business needs. It is essential to align the dismissal reason with the LRA, ensuring it is fair, justifiable, and substantiated.
Step 2 – Conduct a Preliminary Investigation
■ Collect relevant evidence such as documents, emails, CCTV, and witness statements.
■ Assess the context and seriousness of the issue impartially.
■ Determine whether there is a prima facie case before proceeding to a hearing.
■ Document every step contemporaneously to establish a legal defence if challenged.
Step 3 – Schedule a Disciplinary Hearing
■ Issue a written notice detailing the allegations and informing the employee of their rights.
■ Allow reasonable time for preparation and for arranging representation. Employees are entitled to be assisted by a fellow employee or shop steward.
■ External legal representation in internal hearings is not an automatic right; it is permitted only if company policy, a collective agreement, or fairness requires it.
■ Ensure even informal disciplinary processes provide notice and an opportunity to respond.
Step 4 – Hold the Disciplinary Hearing
■ Appoint a neutral chairperson; for complex or serious cases, consider an independent external chairperson.
■ Provide the employee the opportunity to present their case, call witnesses, and challenge evidence through cross-examination.
■ Keep a full record – minutes or transcript – and issue a reasoned decision that shows how the evidence was assessed.
Step 5 – Make a Decision and Impose Sanction
■ Evaluate the evidence and hearing outcomes objectively to determine culpability.
■ Consider mitigating and aggravating factors, including length of service and past disciplinary record.
■ Apply the principle of proportionality: dismissal should be a last resort and is justified only if the employment relationship has become intolerable or no lesser sanction is appropriate.
■ In incapacity cases, demonstrate that reasonable support or accommodation was attempted before dismissal.
Step 6 – Provide Written Notice of the Outcome
Deliver a written notification to the employee setting out:
■The decision (dismissal or alternative sanction)
■The reasons for the decision
■The right to appeal, including applicable timelines
■ Retain a copy of this communication for company records
■The Code requires reasoned written outcomes as evidence of procedural fairness
Step 7 – Prepare for Potential CCMA Referral
Employees have 30 calendar days from the date of dismissal (or from receiving the internal appeal outcome) to refer an unfair dismissal dispute to the Commission for Conciliation, Mediation and Arbitration (CCMA) or the relevant bargaining council. If referred late, the employee must apply for condonation. Employers should still maintain all records.
Maintain complete documentation, including charge sheets, investigation notes, hearing minutes, warning letters, and written outcomes. Procedural compliance and meticulous record-keeping remain the strongest defence in any dispute.
Securing Expert Representation
Specialist services, such as those offered by Labournet, significantly reduce employer risk at the CCMA and Labour Court. Expert representation can be decisive in achieving a defensible outcome and avoiding costly awards.
Fair Dismissal as a Strategic Business Advantage
While dismissals are sometimes unavoidable, when conducted correctly they serve a strategic function beyond legal compliance. Lawful dismissals safeguard your organisation’s legal position, uphold employee morale, reinforce a culture of fairness, and protect the company’s reputation. Conversely, procedural errors, inconsistent application, or inadequate documentation can expose the business to costly CCMA claims and reputational risks.
How Labournet Can Support
You Labournet understands that managing dismissals within the framework of South African labour law can be complex and fraught with risk. That is why our support extends far beyond basic advice. We offer a comprehensive, hands-on partnership to help you navigate every stage of the dismissal process with confidence and legal certainty.
T: +27 (0)31 266 6570
C: +27 (0)82 786 7480
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