Dismissal and the new 2025 Code of Practice

1. Small Businesses
   1. Previous Code: Acknowledged that disciplinary procedures may vary depending on the size of the business, but did not explicitly address small businesses.
   2. 2025 Code: Explicitly recognises the unique challenges faced by small businesses. It states that small employers should not be expected to comply with impractical obligations and that fairness assessments must consider their operational context.
2. Sanction of Dismissal
   1. Previous Code: Focused on the gravity of misconduct, employee’s history, and consistency in applying discipline.
   2. 2025 Code: Adds new factors such as:
      1. The impact of misconduct on the business.
      2. Whether the employee acknowledges wrongdoing and shows willingness to comply with rules.
3. Fair Procedure
   1. Previous Code: Required investigation and opportunity to respond.
   2. 2025 Code: Emphasises genuine dialogue, language accessibility, and detailed allegations. It also allows for procedural flexibility in exceptional cases.
4. Dismissals and Industrial Action
   1. Previous Code: Provided general guidance on dismissals during strikes.
   2. 2025 Code: Offers more detailed steps, including:
      1. Engaging with trade unions or employee representatives.
      2. Issuing clear ultimatums.
      3. Considering legitimacy and timing of strikes before dismissal
5. Probation and Performance
   1. Previous Code: Probation was primarily for assessing performance.
   2. 2025 Code: Expands the purpose to include both performance and suitability.
6. Poor Work Performance
   1. Previous Code: Required employers to provide guidance and warnings before dismissal.
   2. 2025 Code: Introduces the concept of reasonably achievable performance standards. It also allows for dismissal without prior warning in certain cases, especially for senior or highly skilled employees. 
7. Incapacity
   1. Previous Code: Focused on incapacity due to ill health or injury.
   2. 2025 Code: Broadens the definition to include other forms of incapacity, such as imprisonment or incompatibility with workplace culture. 
8. Operational Requirements (Retrenchments)
   1. Previous Code: Did not include guidelines; these were found in a separate code.
   2. 2025 Code: Integrates retrenchment procedures directly, including:
      1. Definitions of fair reason and fair procedure.
      2. Templates for section 189(3) notices.
      3. Guidelines for consultation, selection criteria, severance, and re-employment.
9. Greater Accessibility and Clarity
   1. The new Code is more user-friendly, written in clearer language and structured to be easier to navigate for both employers and employees.
   2. It consolidates dismissal guidelines into a single document, integrating aspects previously found in separate codes (e.g. retrenchments), which improves consistency and transparency.
   3. Recognition of Small Business Realities
      1. The Code explicitly acknowledges the limitations of small businesses, such as lack of HR departments or legal expertise.
      2. It allows for simplified procedures where appropriate, reducing administrative burdens while still ensuring fairness.
   4. Expanded Grounds for Incapacity
      1. Previously limited to ill health or injury, the new Code now includes:
         1. Imprisonment as a valid reason for incapacity dismissal.
         2. Incompatibility with workplace culture or colleagues as a recognised form of incapacity.
   5. Refined Approach to Probation
      1. Probation now covers both performance and suitability, not just performance.
      2. Employers may dismiss probationary employees more easily for poor performance or misconduct.
   6. Performance Management for Senior Roles
      1. The Code introduces a distinction between general employees and:
         1. senior or managerial staff; and
         2. highly skilled professionals.
      2. These employees may be dismissed without prior warnings if their performance falls short, due to their presumed ability to self-assess.
   7. Operational Requirements and Retrenchments
      1. Retrenchment procedures are now integrated into the dismissal code, rather than being separate.
      2. A structured Section 189(3) notice template is included to guide employers in disclosing relevant information during retrenchments.
   8. Dismissals Related to Industrial Action
      1. The Code expands on strike-related dismissals, requiring employers to consider:
         1. The legitimacy of demands.
         2. The duration and impact of the strike.
         3. The conduct of both parties.
      2. It allows for collective representations, reducing the need for individual hearings in group misconduct cases.
   9. Enhanced Procedural Fairness
      1. Employers must ensure:
         1. Clear communication of allegations.
         2. Opportunity to respond and make representations.
         3. Right to assistance from a colleague or union representative.
      2. The Code reinforces progressive discipline, encouraging alternatives to dismissal unless the misconduct is severe.
   10. Consistency in Disciplinary Action
       1. While consistency remains important, the Code clarifies that different outcomes may be justified if the misconduct renders continued employment intolerable.
10. Overall Impact
    1. The 2025 Code modernises dismissal procedures by:
       1. Making them more practical for diverse workplaces.
       2. Ensuring fairness without excessive formality.
       3. Aligning with recent case law and evolving workplace dynamics.

For advice or more information, contact Riona Kalua, head of our Labour and Employment team.