Being dismissed from your job is stressful and financially devastating – but not all dismissals are lawful. In South Africa, Section 188 of the Labour Relations Act protects employees from unfair dismissal by requiring employers to prove both that they had a fair reason for dismissal (substantive fairness) and that they followed a fair process (procedural fairness).
If either element is missing, the dismissal is unfair and can be challenged at the CCMA within 30 days, potentially resulting in compensation of up to 12 months’ salary or even reinstatement. Understanding what constitutes unfair dismissal, the three grounds for challenging a termination (lack of valid reason, procedural unfairness, or automatically unfair grounds like discrimination), and the remedies available through the CCMA or Labour Court is essential for both employees seeking to protect their rights and employers wanting to avoid costly legal disputes.
This guide explains the legal definition of unfair dismissal, the difference between ordinary and automatically unfair dismissals, and the practical steps for seeking redress.
This article provides general information only and should not be considered legal advice.
Key takeaways
- An unfair dismissal occurs when an employer terminates an employee’s contract without a fair reason or without following a fair procedure, as defined in Sections 186 and 188 of the Labour Relations Act.
- The three main grounds for challenging a dismissal are lack of a valid reason (substantive unfairness), procedural unfairness (flawed process), or automatically unfair grounds under Section 187 (discrimination, pregnancy, whistleblowing).
- Employees can refer disputes to the CCMA or relevant bargaining council within 30 days of dismissal for conciliation and, if unresolved, arbitration.
- Employers must prove both substantive and procedural fairness in cases of misconduct, incapacity (poor performance or ill health), or operational requirements (retrenchments).
- Remedies for unfair dismissal include reinstatement, compensation of up to 12 months’ salary (or 24 months for automatically unfair dismissals), or negotiated settlement agreements.
What is an unfair dismissal
Section 186(1)(a) of the Labour Relations Act defines a dismissal as occurring when an employer has terminated employment with or without notice. However, not all dismissals are lawful. Section 188(1) provides that a dismissal is unfair if the employer fails to prove that the reason for dismissal was a fair reason related to the employee’s conduct or capacity, or based on the employer’s operational requirements, and that the dismissal was effected in accordance with a fair procedure.
This creates a two-stage test. First, was there substantive fairness—a valid, legitimate reason for the dismissal? Second, was there procedural fairness—did the employer follow a proper process before dismissing? If either element is absent, the dismissal is unfair.
The burden of proof under Section 192 rests entirely on the employer. If you dismiss an employee and they challenge it at the CCMA, you must prove both substantive and procedural fairness. Simply claiming the employee was guilty of misconduct or poor performance is insufficient—you must provide evidence that demonstrates the reason was fair and the process was followed.
Substantive fairness
Substantive fairness means there must be a valid reason for the dismissal that falls within one of the three recognised categories: misconduct (such as theft, insubordination, absenteeism, or breach of company rules), incapacity (poor work performance, or inability to work due to ill health or injury), or operational requirements (retrenchment due to economic, technological, structural, or similar business needs).
Even if you followed perfect procedures, if the reason for dismissal was not fair—for example, dismissing someone because you personally dislike them, or because they refused to work on a religious holiday they’re entitled to observe—the dismissal is substantively unfair.
Procedural fairness
Procedural fairness means you must follow a fair process before dismissing. The Code of Good Practice on Dismissal (Schedule 8 of the LRA) sets out the minimum requirements: conduct an investigation, inform the employee of the allegations in writing using language and a form they can reasonably understand, hold a disciplinary hearing where the employee can state their case, allow the employee to be represented by a trade union representative or fellow employee, consider all evidence and mitigating factors, and communicate the decision with clear reasons in writing.
Even if the employee committed serious misconduct like theft or assault, if you dismissed them without a hearing, without giving them a chance to respond, or without following your own disciplinary code, the dismissal is procedurally unfair. The CCMA consistently finds that summary dismissals—where employees are fired on the spot without a hearing—are almost always procedurally unfair.
Grounds for unfair dismissal
Dismissal without a fair reason
A dismissal lacks substantive fairness if there’s no valid reason falling within the three recognised categories. Common examples include dismissing someone due to personal dislike rather than job performance or misconduct, terminating employment without any history of disciplinary action or warnings for minor first offences, retrenching a single employee without considering alternatives to dismissal, or dismissing probationary employees without giving them a fair opportunity to meet performance standards.
The Code of Good Practice states that generally, it is not appropriate to dismiss an employee for a first offence except where the misconduct is serious and of such gravity that it makes a continued employment relationship intolerable. For less serious misconduct, progressive discipline with warnings is expected before dismissal becomes appropriate.
Failure to follow fair procedures
Even with a valid reason, procedural unfairness renders the dismissal unfair. Common procedural failures include failing to hold a disciplinary hearing before dismissal, not informing the employee of the specific charges against them, denying the employee the right to representation or to call witnesses, not allowing the employee an opportunity to respond and present mitigating factors, failing to document the process with written records, and not providing written reasons for the dismissal decision.
For retrenchments, procedural fairness requires consultation with affected employees or their representatives, exploring alternatives to dismissals, applying fair selection criteria transparently, and paying statutory severance. Failure to follow Section 189 consultation requirements makes the retrenchment procedurally unfair.
Automatically unfair dismissals
Section 187 of the LRA lists reasons for dismissal that are deemed automatically unfair in law, regardless of whether any procedure was followed. These attract heavier penalties—compensation of up to 24 months’ salary instead of 12 months—and can be referred directly to the Labour Court rather than the CCMA.
Common automatically unfair reasons include dismissal related to pregnancy, intended pregnancy, or any reason related to maternity leave; dismissal for participating in or supporting a lawful strike or protest action; dismissal for whistleblowing under the Protected Disclosures Act (reporting corruption, fraud, or wrongdoing); dismissal for refusing to do work that poses an imminent and serious danger to health or safety; dismissal based on unfair discrimination on prohibited grounds such as race, gender, sex, ethnic or social origin, colour, sexual orientation, age, disability, religion, conscience, belief, political opinion, culture, language, marital status, or family responsibility; and dismissal for trade union membership or participation in lawful trade union activities.
If an employee can show their dismissal falls under Section 187, the burden shifts to the employer to prove the reason was not the automatically unfair one. If the employer cannot rebut this, the dismissal is automatically unfair.
What employers must do to dismiss fairly
For misconduct dismissals
Conduct a thorough investigation before charging the employee. Hold a disciplinary hearing where the employee can respond to the allegations and present evidence. Consider mitigating factors such as length of service, previous disciplinary record, personal circumstances, remorse, and the seriousness of the misconduct. Apply discipline consistently—if you dismissed one employee for a certain offence, you must apply similar sanctions to others who commit similar offences in similar circumstances. Communicate the decision in writing with clear reasons and inform the employee of their right to appeal internally (if provided for in your policies) and to refer the matter to the CCMA within 30 days.
For incapacity dismissals
For poor performance, assess whether the employee was aware of the required standard, whether they were given a fair opportunity to meet it through training or support, whether performance issues were addressed through counselling and warnings, and whether dismissal is appropriate given the circumstances. Progressive discipline is expected—coaching, warnings, performance improvement plans, and only then dismissal if performance remains unsatisfactory.
For ill health or injury, investigate the extent and likely duration of the incapacity, consider medical evidence and prognosis, explore alternatives such as temporary replacement, adaptation of duties, or reasonable accommodation, and consult with the employee before deciding. Dismissal is only fair if continued employment is genuinely not reasonably possible.
For operational requirements dismissals
Follow Section 189 of the LRA precisely. Issue written notice to affected employees disclosing reasons, numbers, selection criteria, timing, and severance. Consult meaningfully with employees or their representatives on reasons for the retrenchment, alternatives to dismissals, selection criteria, and timing. Explore genuine alternatives such as reducing working hours, eliminating overtime, natural attrition, or voluntary severance packages. Apply fair, objective selection criteria consistently (LIFO is common but not mandatory). Pay statutory severance of at least one week’s remuneration per completed year of service.
Employee recourse and remedies
How to challenge an unfair dismissal
If you believe your dismissal was unfair, you must refer the matter to the CCMA or relevant bargaining council (if one has jurisdiction over your industry) within 30 days of the dismissal date or, if you followed an internal appeal, within 30 days of the final decision to uphold the dismissal. Late referrals require condonation applications explaining the delay.
The process begins with conciliation, where a CCMA commissioner meets with both parties to explore settlement. Many cases settle at this stage through negotiated agreements, often involving severance payments in exchange for withdrawing the claim.
If conciliation fails, the matter proceeds to arbitration (for ordinary unfair dismissals under Section 188) or to the Labour Court (for automatically unfair dismissals under Section 187). At arbitration, both sides present evidence and call witnesses, and the commissioner makes a binding award.
Possible remedies
Section 193 of the LRA provides three main remedies for unfair dismissal. Reinstatement means the employee is restored to their position as if the dismissal never happened, with or without back pay for the period they were dismissed. This is the primary remedy but is often impractical where the trust relationship has broken down.
Re-employment means the employee is given a different position with the same employer, suitable to their skills and experience. This is less common than reinstatement or compensation.
Compensation is the most common remedy. For ordinary unfair dismissals under Section 188, the maximum is 12 months’ remuneration. For automatically unfair dismissals under Section 187, the maximum is 24 months’ remuneration. The actual amount depends on factors like the employee’s length of service, remuneration, prospects of finding alternative employment, and the circumstances of the dismissal.
Section 194 caps compensation at the maximums stated, and the commissioner has discretion to award less based on the circumstances. Compensation is based on remuneration, which includes salary plus the monetary value of benefits like housing allowances and company contributions.
Who should avoid this and safety notes
For employers
Avoid dismissing employees without thorough investigation, proper hearings, and documented evidence. Even if you’re convinced someone is guilty of misconduct, rushing the process creates procedural unfairness that undermines your case.
Do not assume probationary employees have fewer rights. Whilst you have more flexibility during probation, you must still follow fair procedures including regular feedback, clear performance standards, and hearings before termination.
Never dismiss someone for automatically unfair reasons like pregnancy, union membership, or whistleblowing. These carry double the compensation and serious reputational damage.
For employees
Request clear, written reasons for your dismissal immediately. If your employer refuses or gives vague explanations, this strengthens your case for procedural unfairness.
Seek advice before signing any settlement agreement or waiver. Employers sometimes offer small settlements to avoid CCMA disputes, but once you sign a release, you cannot pursue the matter further.
Lodge your CCMA referral within 30 days. Missing this deadline can bar your claim entirely unless you have compelling reasons for the delay and successfully apply for condonation.
FAQ: What constitutes an unfair dismissal in South Africa
What is the difference between unfair dismissal and constructive dismissal?
Unfair dismissal under Section 186(1)(a) is when the employer initiates termination unfairly. Constructive dismissal under Section 186(1)(e) is when an employee resigns because the employer made continued employment intolerable—it’s treated as a dismissal because the resignation was forced by the employer’s conduct.
Can you be dismissed without a warning?
Only for serious misconduct that makes continued employment intolerable, such as theft, assault, or gross insubordination. Even then, you must be given a hearing before dismissal. For less serious misconduct, progressive discipline with warnings is expected before dismissal becomes appropriate.
What is the role of the CCMA in unfair dismissal cases?
The Commission for Conciliation, Mediation and Arbitration (CCMA) resolves labour disputes including unfair dismissals. It’s free to employees and provides conciliation (settlement discussions) and, if that fails, arbitration where a commissioner hears evidence and makes a binding award.
Can fixed-term contract workers claim unfair dismissal?
Yes. Section 186(1)(b) covers fixed-term employees who reasonably expected renewal but were not renewed, or whose contracts were renewed on less favourable terms. The key is whether there was a reasonable expectation of renewal based on past practice, verbal promises, or operational needs.
How much compensation can I get for unfair dismissal?
For ordinary unfair dismissals, up to 12 months’ remuneration. For automatically unfair dismissals (discrimination, pregnancy, whistleblowing), up to 24 months’ remuneration. The actual amount depends on your length of service, salary, prospects of finding new work, and the circumstances of the dismissal.
Sources
- Labour Relations Act 66 of 1995: Sections 186, 187, 188, 192, and 193 on dismissal (Government of South Africa)
- CCMA: Unfair dismissal disputes information sheet
- Code of Good Practice on Dismissal: Schedule 8 of the Labour Relations Act
- South African Labour Guide: Dismissals overview and legal requirements
- SME Labour Support: Ending employment by dismissal guide
