New Employment Code Set to Ease SA Hiring Risks and Spur Job Creation

South Africa’s government is introducing a significant overhaul to its employment framework in a bid to combat the country’s persistently high unemployment rate—currently sitting at 31.9%. The updated Code of Good Practice on Dismissals aims to simplify the process of terminating employees, especially for small businesses, to reduce legal and procedural barriers that often discourage job creation.

The Department of Employment and Labour (DEL) says the reforms are designed to strike a balance between protecting workers’ rights and easing the burden on employers. The move is expected to unlock job opportunities by removing hiring risks and creating more flexibility in the workplace.

What’s Changing?

The revised code introduces a less formal and more flexible approach to dismissals. While fairness remains a core principle, the new process allows employers—particularly smaller businesses—to act without undergoing time-consuming and costly disciplinary hearings. This shift will still require employers to offer valid reasons and fair chances for employees to respond, but removes the current need for adversarial pre-dismissal arbitration.

Importantly, any dismissal that violates basic rights—such as on grounds of race, gender, religion, pregnancy, or participation in a protected strike—will still be considered automatically unfair and open to legal challenge.

Three-Month Grace Period for New Hires

One of the boldest moves in the draft code is a three-month qualifying period, during which dismissals for poor performance, misconduct, or incompatibility cannot be contested at the Commission for Conciliation, Mediation and Arbitration (CCMA) or in the Labour Court—provided they are not automatically unfair. This is intended to give businesses the freedom to assess new hires without fear of early legal repercussions.

“This allows employers to take a chance on young and inexperienced candidates without the heavy legal risk that often discourages first-time hiring,” says a spokesperson from the DEL.

Relief for Small Businesses

The reforms are particularly geared toward small businesses, which often lack the HR infrastructure to manage complex disciplinary proceedings. Informal disciplinary action will now be acceptable, although the DEL has emphasized this is not a green light for arbitrary dismissals.

Labour union UASA cautiously welcomed the move, noting that the clarity around what qualifies as a small business still needs to be strengthened to avoid abuse.

Other Key Changes in the Pipeline

• Reduced strike rights: New limitations will restrict strike action related to socio-economic issues to 24 months.

• Redefined disputes: Amendments to Section 186 will exclude disputes related to promotion, demotion, probation, and training from the definition of “unfair labour practice” for one year post-implementation.

Aiming for Faster, Fairer Processes

The DEL says the changes are necessary to relieve the clogged Labour Court system, prevent rushed litigation, and restore meaningful engagement between employers and employees.

By maintaining protections for core labour rights while streamlining procedural hurdles, the government hopes to create an environment where businesses feel confident to hire—especially those seeking to grow with entry-level workers.

With public consultations now closed, the DEL is preparing for parliamentary submission. If adopted, the new code could mark a turning point in South Africa’s battle against joblessness, offering both employers and job seekers a more practical and balanced system.

{Source: Money Web}

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