AUTOMATICALLY UNFAIR VERSUS SUBSTANTIVELY UNFAIR DISMISSALS

Written by Dane Frost

Dismissing an employee is one of the most consequential decisions any employer or manager will ever make. Get it right, and you protect your business, maintain team morale, and comply with the law. Get it wrong, and you may find yourself across a table at the Commission for Conciliation, Mediation and Arbitration (CCMA), a Bargaining Council, or even the Labour Court, facing a compensation award that runs into tens of thousands of rands, or a reinstatement order compelling you to take the employee back.

South African labour law draws a critical distinction between two types of unfair dismissal: automatically unfair dismissals and substantively unfair dismissals. These two concepts occupy different parts of the Labour Relations Act 66 of 1995 (LRA), attract different remedies, carry different compensation ceilings, and, importantly, follow different jurisdictional pathways once a dispute is referred.

Whether you run a single establishment, manage a chain of establishments, or oversee a team of employees, understanding the distinction between these two types of unfair dismissal is not merely a legal box to tick. It is a fundamental part of managing people fairly, lawfully, and sustainably.

The Legal Framework: What the Law Says

1.1 The Labour Relations Act 66 of 1995 (LRA)

The LRA is the cornerstone of dismissal law in South Africa. Section 185 of the LRA establishes that every employee has the right not to be unfairly dismissed, a right that gives effect to the constitutional value of fair labour practices enshrined in section 23 of the Constitution of the Republic of South Africa, 1996.

The LRA recognises three grounds on which an employer may lawfully dismiss an employee:

1. Misconduct (e.g., theft, dishonesty, gross insubordination, assault, harassment)

2. Incapacity (e.g., poor work performance, ill health, or injury)

3. Operational requirements (e.g., retrenchment for economic, technological, or structural reasons)

A dismissal is unfair if it does not relate to one of these grounds, or if a fair ground exists but the proper procedure was not followed. The LRA then draws a further, crucial distinction between dismissals that are automatically unfair (governed by section 187) and those that are substantively unfair (governed by sections 185 to 188).

At its most basic, automatically unfair dismissal concerns a prohibited motive; why the employer dismissed. Substantively unfair dismissal concerns an unjustified or disproportionate decision; whether the employer's chosen ground was valid, and whether dismissal was the appropriate sanction.

1.2 The Code of Good Practice: Dismissal

The Code of Good Practice: Dismissal (the Code) is issued under Schedule 8 of the LRA and provides detailed guidance on how dismissals based on misconduct, incapacity, and operational requirements must be handled. Arbitrators at the CCMA and bargaining councils, as well as judges at the Labour Court, are required to take the Code into account when determining whether a dismissal was fair. Ignoring the Code is therefore done at an employer's peril.

The September 2025 updated Code consolidates and reinforces the following key principles:

• Substantive fairness must be assessed in three typical categories: misconduct, incapacity (poor performance or ill health), and operational requirements.

• An employer must apply progressive discipline, particularly for first offences that are not dismissible in themselves.

• Before dismissing for misconduct, the employer must conduct a fair disciplinary inquiry at which the employee is given an opportunity to state their case.

• For incapacity due to poor performance, the employer must give the employee a reasonable opportunity to improve, with appropriate support, counselling, and warning, before dismissal is considered.

• For incapacity due to ill health or injury, the employer must investigate, consider alternatives to dismissal, and apply compassion proportionate to the circumstances.

• Dismissal should be the sanction of last resort, not the first response to a problem.

• Even during probation or qualifying periods, employees remain fully protected against automatically unfair dismissals, including dismissal for discriminatory reasons or for exercising their organisational and bargaining rights.

Automatically Unfair Dismissals

2.1 What Is an Automatically Unfair Dismissal?

An automatically unfair dismissal is the most serious category of unfair dismissal under South African law. It is dealt with in section 187 of the LRA and derives its name from the fact that once the prohibited reason for the dismissal is established, there is no room for the employer to justify it. The dismissal is unlawful as a matter of law – automatically, regardless of whether the employer believed they had good grounds or followed a fair procedure.

Put simply, there are certain reasons for which an employer may never dismiss an employee, no matter how the decision is packaged or presented.

2.2 Grounds for Automatically Unfair Dismissal — Section 187(1) of the LRA

Section 187(1) of the LRA lists the following grounds on which a dismissal will be automatically unfair:

Section 187(1) LRA — Automatically Unfair Dismissal Grounds

1. Exercising any right conferred by the LRA, or participating in any proceedings under the LRA

2. Participation in, or support of, a lawful protected strike or protected protest action

3. Refusal to perform the work of employees who are engaged in a protected strike (unless the work is essential to prevent an immediate risk to life, safety, or health)

4. Refusal to accept a demand in respect of a matter of mutual interest — for example, refusing to agree to a reduction in salary or benefits unilaterally imposed by the employer

5. Pregnancy, intended pregnancy, or any reason related to pregnancy

6. Membership of, or participation in the lawful activities of, a trade union or workplace forum

7. Direct or indirect unfair discrimination on a listed or arbitrary ground — e.g., race, gender, sex, ethnic or social origin, colour, sexual orientation, age, disability, religion, conscience, belief, political opinion, culture, language, marital status, or family responsibility

8. A transfer of a business as a going concern in terms of section 197 or 197A of the LRA

9. Making a protected disclosure (whistleblowing) in terms of the Protected Disclosures Act 26 of 2000

Note that the ground relating to refusal to accept a demand (section 187(1)(c)) is particularly important and often misunderstood. Where an employer attempts to compel employees to accept changed terms and conditions of employment by threatening dismissal, and then follows through, this will generally constitute an automatically unfair dismissal. The only exception is where the employer can demonstrate that the dismissal was genuinely for operational requirements, following the proper retrenchment process under section 189 of the LRA.

Two further grounds deserve special attention in the context of the hairdressing, cosmetology, beauty, and skincare industry: pregnancy and trade union membership. Given the predominantly female workforce in our industry, any adverse action that coincides with a pregnancy disclosure must be approached with extreme caution and watertight documentation.

2.3 The Two-Stage Causation Test

How does one determine whether a dismissal was for a prohibited reason? Our courts and arbitration forums have developed and applied a two-stage causation test, particularly in the context of protected strike and discrimination cases:

Stage 1 — Factual causation: Would the dismissal have occurred but for the protected activity or prohibited ground? In other words, if the employer had removed the pregnancy, the union membership, or the strike participation, would the employer still have dismissed?

Stage 2 — Legal causation: Was the protected activity or prohibited ground the main, dominant, or most probable cause of the dismissal? It need not be the only reason; it is sufficient that it was a contributing or dominant factor.

This two-stage test means that employers who combine a legitimate reason (such as misconduct) with a prohibited reason (such as union membership) may still be found liable for an automatically unfair dismissal if the protected ground was the dominant motivating factor. Documentation of genuinely independent reasons for dismissal is therefore critical.

2.4 Burden of Proof

In an automatically unfair dismissal claim, the burden of proof operates as follows:

1. The employee bears an initial evidential burden: they must produce evidence sufficient to create a credible possibility that the dismissal was for a prohibited reason; for example, by showing the timing of the dismissal shortly after a pregnancy disclosure, union activity, or the lodging of a grievance.

2. Once that threshold is met, the burden shifts to the employer, who must prove that the reason for dismissal does not fall within section 187 and was instead some other fair reason.

This shifting burden is why the timing and documentation of a dismissal matter so much. A dismissal that takes place suspiciously close in time to a protected event without a clear, documented, independent explanation is very difficult to defend.

2.5 Where Are These Disputes Resolved? — Jurisdiction

IMPORTANT — Jurisdictional Pathway for Automatically Unfair Dismissals

1. An automatically unfair dismissal dispute must first be referred to conciliation at the CCMA or the appropriate bargaining council.

2. If conciliation fails, the dispute must ordinarily be referred to the Labour Court for adjudication — NOT to the CCMA or bargaining council for arbitration.

3. The CCMA or bargaining council may only arbitrate an automatically unfair dismissal dispute if BOTH parties agree in writing to do so.

4. This is a critical distinction from ordinary unfair dismissal disputes, which proceed to arbitration at the CCMA or bargaining council as a matter of course.

5. The Labour Court has confirmed jurisdiction to adjudicate automatically unfair dismissal disputes, including those involving discrimination and protected disclosures.

This jurisdictional distinction is significant for employers in the beauty and hairdressing sector. If you receive a referral to conciliation on a matter that is framed as an automatically unfair dismissal, you need to be aware that, should conciliation fail, the dispute may escalate to the Labour Court, where costs and complexity increase considerably. Early and careful engagement is strongly advisable.

2.6 Remedies for Automatically Unfair Dismissals

The remedies for an automatically unfair dismissal are significantly more severe than those for a substantively unfair dismissal. In terms of sections 193 and 194(3) of the LRA:

• The primary remedy is reinstatement to the position held before the dismissal, or re-employment. Where reinstatement is granted, the employee is entitled to back pay from the date of dismissal.

• Where reinstatement or re-employment is not appropriate, for example, where the relationship has irretrievably broken down, the arbitrator or Labour Court may award compensation.

• The maximum compensation for an automatically unfair dismissal is 24 months' remuneration. This reflects the constitutional gravity of the infringement.

• Constitutional dimensions, such as equality rights or freedom of association, often influence the court's willingness to award the maximum compensation.

For a small establishment owner, a compensation award of 24 months' remuneration for a single employee could be financially catastrophic. Prevention is, without question, the most cost-effective strategy.

Substantively Unfair Dismissals

3.1 What Is a Substantively Unfair Dismissal?

A substantively unfair dismissal arises when an employer dismisses an employee for a reason related to misconduct, incapacity, or operational requirements, all otherwise legitimate grounds, but the employer cannot show a valid and fair reason, or cannot justify the decision on the available evidence, or has imposed a sanction that is disproportionate to the offence or circumstances.

Section 188(1) of the LRA provides that a dismissal is unfair if the employer fails to prove:

(a) that there is a fair reason related to the employee's conduct, capacity, or the employer's operational requirements; and

(b) that the dismissal was effected in accordance with a fair procedure.

Substantive fairness, therefore, goes to the heart of two questions: Did the employee actually do what they are accused of? And even if they did, was dismissal the right response?

3.2 The Context-Based Assessment for Substantive Fairness

Unlike the causation test for automatically unfair dismissals, the assessment of substantive fairness is contextual and fact-specific. An arbitrator or court will weigh up:

1. The gravity of the misconduct or incapacity

2. The employee's length of service and disciplinary record

3. Any mitigating circumstances put forward by the employee

4. Whether the employer explored alternatives to dismissal

5. Whether the employer applied its disciplinary code consistently to other employees in similar circumstances

6. Whether the sanction of dismissal was proportionate in all the circumstances

3.3 Substantive Fairness in Misconduct Dismissals

When dismissing for misconduct, the employer must establish the following on a balance of probabilities (not beyond a reasonable doubt, as in criminal proceedings):

The Substantive Fairness Checklist — Misconduct Dismissals

1. Was the rule or standard that the employee contravened valid and reasonable?

2. Did the employee know about the rule or standard, or ought they reasonably to have known?

3. Was the rule or standard consistently applied to all employees in similar circumstances?

4. Is there sufficient evidence that the employee actually committed the misconduct?

5. Was dismissal the appropriate sanction, given the nature of the offence, the employee's record, length of service, and any mitigating or aggravating circumstances?

In the context of a salon or spa establishment, examples of misconduct that may, where the above requirements are met, warrant dismissal include serious theft from clients or the business, falsification of records, assault, gross insubordination, or wilful damage to expensive equipment. First-offence infractions such as occasional tardiness or low-level insubordination should ordinarily be addressed through progressive discipline, not dismissal.

The same factual scenario can sometimes be framed either as an automatically unfair dismissal or as a substantively unfair dismissal. For example, where an employer claims poor performance but the employee alleges the true reason was discrimination, the way the dispute is framed in the referral documents will have significant consequences for the forum and remedies available. This is a compelling reason to ensure that your reasons for dismissal are always clearly, accurately, and consistently documented.

3.4 Substantive Fairness in Incapacity Dismissals

Poor Work Performance: Substantive fairness in performance dismissals requires that the employee was clearly aware of the standard of performance expected; was given a fair opportunity to meet that standard, with guidance, training, and support; was properly counselled and warned; and still failed to meet the required standard after a reasonable time. Dismissal is only substantively fair once these steps have genuinely been followed, particularly for long-service employees.

Ill Health or Injury: For incapacity due to ill health or injury, the employer must genuinely investigate the nature and likely duration of the condition, consult with the employee, explore alternatives such as modified duties or reduced hours, and only dismiss when it has become reasonably clear that the employee cannot perform their job and no reasonable accommodation is possible. A medical opinion, obtained through a proper process and shared with the employee, is essential.

3.5 Burden of Proof and Required Evidence — Substantive Fairness

For substantively unfair dismissal disputes, the employer bears the onus to prove on a balance of probabilities:

1. The applicable rule, standard, or operational need

2. The investigation was conducted, and the evidence of breach or need

3. Prior warnings or counselling given (where appropriate)

4. Consideration of mitigating factors and alternatives to dismissal

5. The rationale for selecting dismissal as the sanction, or for selecting specific employees for retrenchment

The employee, in turn, may challenge the credibility, consistency, or proportionality of the employer's reasons, for example, by showing that similar misconduct by other employees attracted a lesser sanction, or that performance standards were never communicated.

3.6 Remedies for Substantively Unfair Dismissals

The primary remedy for a substantively unfair dismissal is reinstatement or re-employment. Where this is not appropriate, typically because the employment relationship has irretrievably broken down, compensation of up to 12 months' remuneration may be awarded.

In practice, the CCMA and bargaining councils frequently order compensation rather than reinstatement in substantively unfair dismissal cases. Poor documentation or inconsistent application of disciplinary rules frequently tips the scale towards a finding of substantive unfairness and a compensation award that could have been entirely avoided.

Comprehensive Side-by-Side Comparison

The following table summarises the key legal and practical differences between automatically unfair and substantively unfair dismissals under South African law:

Dimension	Automatically Unfair Dismissal (s187 LRA)	Substantively Unfair Dismissal (misconduct/incapacity/ operational requirements)
Statutory Basis	Section 187 of the LRA: dismissal is automatically unfair if the reason falls within a closed list of prohibited grounds.	Sections 185–188 of the LRA and the Code of Good Practice: Dismissal: dismissal is unfair where there is no fair reason related to conduct, capacity, or operational requirements, or where dismissal is not the appropriate sanction.
Core Legal Test	Is the true reason or dominant cause of the dismissal one of the prohibited grounds in section 187? If yes, the dismissal is automatically unfair regardless of whether a procedure was followed.	Did the employer prove a valid and fair reason related to misconduct, incapacity, or operational requirements, and was dismissal an appropriate and proportionate sanction in the circumstances?
Causation Test	Two-stage causation test: (1) Factual causation — would the dismissal have occurred but for the protected activity or prohibited ground? (2) Legal causation — was that protected activity or ground the main, dominant, or most probable cause of the dismissal?	Context-based assessment: Did the employee actually commit the misconduct or fail to perform, or were there genuine operational requirements? Is dismissal a reasonable and proportionate response when weighed against gravity, length of service, mitigation, and alternatives?
Typical Scenarios	Dismissal for participating in a protected strike; refusing to accept a unilateral change to terms and conditions; pregnancy or related absence; trade union membership or activities; discrimination on a listed or arbitrary ground; reasons related to a section 197 transfer; whistleblowing.	Misconduct (theft, dishonesty, insubordination, harassment); poor work performance; ill health or injury; retrenchment for operational requirements — where the employer's reason or the choice of dismissal is not justified on the evidence.
Burden of Proof	Employee bears an initial evidential burden: must produce evidence creating a credible possibility that the dismissal was for a prohibited reason. Once met, the employer must prove the reason does not fall within section 187.	Employer bears the onus to show a fair reason related to conduct, capacity, or operational requirements, and that dismissal was the appropriate sanction, on a balance of probabilities.
Forum / Jurisdictional Pathway	Must first be referred to conciliation at the CCMA or the appropriate bargaining council. If unresolved, the dispute must ordinarily be referred to the Labour Court for adjudication. The CCMA or bargaining council may arbitrate only if both parties consent in writing.	Referred to conciliation at the CCMA or bargaining council; if unresolved, proceeds to arbitration at the CCMA or bargaining council. A party dissatisfied with the award may apply to the Labour Court to review the award.
Remedies	Reinstatement or re-employment is the primary remedy where practicable. Compensation of up to 24 months' remuneration if reinstatement is inappropriate. Constitutional dimensions (equality, freedom of association) often influence the court's readiness to award maximum compensation.	Reinstatement or re-employment is also the primary remedy. Compensation is generally capped at 12 months' remuneration for ordinary unfair dismissal.
Risk Profile for Employers	High risk: exposure to higher compensation, constitutional scrutiny, and reputational damage. Mischaracterising a dispute that has a discrimination or protected-activity element may result in a finding of automatic unfairness even where some performance or misconduct issues existed.	Significant, but comparatively lower cap on compensation. Risk can often be mitigated through robust performance management, disciplinary processes, and thorough documentation. Poor documentation or inconsistent application of rules frequently tips the scale towards substantive unfairness.

Relevant South African Case Law

The following cases illustrate how our courts and arbitration forums have approached both automatically unfair and substantively unfair dismissals. These decisions offer practical lessons for employers and managers.

4.1 Automatically Unfair Dismissals — Key Cases

SA Chemical Workers Union & Others v Afrox Ltd (1999) 20 ILJ 1718 (LAC)

Court / Forum: Labour Appeal Court (1999)

Facts: Employees who participated in a protected strike were dismissed. The employer contended that they had not followed the proper strike procedure and that their conduct during the strike justified dismissal.

Held: The Court confirmed that dismissal for participation in a protected strike is automatically unfair under section 187(1)(a) of the LRA. Applying the two-stage causation test, the Court distinguished between dismissals for participating in a protected strike (automatically unfair) and dismissals for separate, serious strike-related misconduct, such as assault or destruction of property, which may be dealt with on a misconduct basis.

Practical Relevance: Never use dismissal as a response to lawful participation in a protected strike. If employees commit misconduct during a strike, assault, sabotage, or intimidation, you may address that specific misconduct separately, but the dismissal must be grounded in that misconduct alone, not in the act of striking.

Wardlaw v Supreme Mouldings (Pty) Ltd (2007) 28 ILJ 1042 (LAC)

Court / Forum: Labour Appeal Court (2007)

Facts: An employee was dismissed shortly after informing her employer of her pregnancy. The employer sought to characterise the dismissal as being for operational requirements.

Held: The Court held that the dismissal was automatically unfair in terms of section 187(1)(e) of the LRA. It confirmed that any dismissal causally connected to pregnancy, even where the employer attempts to present it as an operational dismissal, will be found automatically unfair. The employee's pregnancy need not be the only reason; it is sufficient that it was a contributing or dominant factor.

Practical Relevance: This is perhaps the most important case for employers in the hairdressing, cosmetology, beauty, and skincare industry. If an employee discloses a pregnancy and you subsequently take steps to end her employment, you are on extremely dangerous legal ground. If restructuring or retrenchment coincides with an employee's pregnancy, the documentation of your objective business case must be meticulous and unimpeachable.

Kroukam v SA Airlink (Pty) Ltd (2005) 26 ILJ 2153 (LAC)

Court / Forum: Labour Appeal Court (2005)

Facts: An employee who had lodged internal grievances and asserted his LRA rights was subsequently dismissed. The employer contended that the dismissal was for misconduct unrelated to the grievance.

Held: The Court held the dismissal was automatically unfair because the dominant cause was the employee's exercise of rights conferred by the LRA. Importantly, the Court noted that the existence of a misconduct-based reason did not protect the employer where the protected ground remained the dominant cause.

Practical Relevance: If you dismiss an employee at or around the time they raise a grievance, refer a dispute to the CCMA or Bargaining Council, or assert their labour rights, a credible presumption will arise that the dismissal is connected to those activities. Always be able to demonstrate, with contemporaneous documentation, that your reasons are entirely independent of any rights the employee has exercised.

Stokwe v MEC: Department of Education, Eastern Cape & Others (2005) 26 ILJ 1065 (LAC)

Court / Forum: Labour Appeal Court (2005)

Facts: An employee was dismissed following her disclosure of alleged corrupt activities at her workplace. The employer denied that the disclosures played any role in the dismissal decision.

Held: The Court confirmed that dismissal related to protected disclosures in terms of the Protected Disclosures Act constitutes an automatically unfair dismissal under section 187(1)(h) of the LRA, and that employees who report wrongdoing in good faith enjoy robust legal protection.

Practical Relevance: If an employee raises concerns about financial irregularities, health and safety violations, harassment in the workplace, or any other form of workplace wrongdoing, especially in writing, exercise extreme caution before taking any adverse action against them. Seek legal advice immediately.

4.2 Substantively Unfair Dismissals — Key Cases

Sidumo & Another v Rustenburg Platinum Mines Ltd & Others (2007) 28 ILJ 2405 (CC)

Court / Forum: Constitutional Court (2007)

Facts: A security guard was dismissed for failing to detect prohibited items brought into a mine. The CCMA commissioner reinstated him, finding the dismissal substantively unfair. The employer challenged the award on review.

Held: The Constitutional Court confirmed the test for substantive fairness: the question is whether the dismissal was a fair and reasonable response to the conduct, assessed objectively. A commissioner is not obliged to uphold a dismissal simply because a rule existed and was broken; the sanction must be proportionate and reasonable in all the circumstances.

Practical Relevance: Proportionality of sanction is central to substantive fairness. Before dismissing, always ask: given this employee's record, the seriousness of the offence, and any mitigating factors, is dismissal genuinely the appropriate response? Hasty or punitive dismissals frequently fail this test.

Edcon Ltd v Pillemer NO & Others (2009) 30 ILJ 2642 (SCA)

Court / Forum: Supreme Court of Appeal (2009)

Facts: An employee was dismissed for dishonesty relating to the misuse of a staff discount. The commissioner found the dismissal substantively unfair, in part because of an inconsistency in prior disciplinary practice.

Held: The SCA confirmed that consistency in the application of discipline is a central element of substantive fairness. Where an employer has previously condoned similar conduct or imposed lesser sanctions, dismissing one employee for the same conduct will be substantively unfair without a rational justification for the differentiation.

Practical Relevance: Apply your disciplinary code consistently across all employees. Keep records of how comparable incidents have been handled. If you differentiate in sanctions between employees, document your reasons clearly, with reference to objective factors such as seniority, the severity of the conduct, or prior warnings.

De Beers Consolidated Mines Ltd v CCMA & Others (2000) 21 ILJ 1051 (LAC)

Court / Forum: Labour Appeal Court (2000)

Facts: An employee with a long and clean service record was dismissed for a single instance of misconduct. The CCMA found the dismissal substantively unfair given the employee's mitigating circumstances.

Held: The Court confirmed that length of service and a clean disciplinary record are significant mitigating factors that must be weighed in assessing the appropriate sanction. A long-service employee with no prior disciplinary record who commits a first, and not the most serious, offence is generally entitled to have those factors weighed in their favour before dismissal is imposed.

Practical Relevance: Always conduct a proper mitigation and aggravation assessment before finalising a dismissal sanction. A five-year employee with no prior warnings is in a fundamentally different position from a six-month employee with multiple warnings, even if both committed the same act. One-size-fits-all approaches to discipline are a common source of substantive unfairness findings.

Woolworths (Pty) Ltd v Whitehead (2000) 21 ILJ 571 (LAC)

Court / Forum: Labour Appeal Court (2000)

Facts: An employee was dismissed for incapacity due to ill health. The employer had not conducted a proper medical investigation or genuinely explored alternatives to dismissal.

Held: The Court held the dismissal was both substantively and procedurally unfair. For ill-health incapacity dismissals, the employer must genuinely investigate the nature and likely duration of the incapacity, consult with the employee, consider alternative positions or accommodations, and only then consider dismissal as a last resort.

Practical Relevance: In a salon and or spa environment, if a therapist or stylist suffers an injury, say, a repetitive strain injury limiting their ability to perform treatments, you may not simply dismiss them without first exploring reasonable accommodation. Can they work in a reception or administrative role? Can their duties be modified? Have you obtained an independent medical opinion? Failure to go through this process will almost certainly result in a finding of unfair dismissal.

Disputes at the CCMA and Bargaining Councils

5.1 Which Forum Has Jurisdiction?

When an employee believes they have been unfairly dismissed and a dispute is referred, the relevant forum depends on the nature of the dismissal:

Automatically unfair dismissals: Must first be referred to conciliation at the CCMA or appropriate bargaining council. If unresolved, they ordinarily proceed to the Labour Court for adjudication. The CCMA or bargaining council may only arbitrate if both parties consent in writing.

Substantively unfair dismissals: Proceed to conciliation and then arbitration at the CCMA or the relevant bargaining council. A party dissatisfied with the arbitration award may apply to the Labour Court for a review of the award, but this is a review on limited grounds, not a full appeal on the merits.

In our industry, the National Bargaining Council for the Hairdressing, Cosmetology, Beauty, and Skincare Industry (HCSBC) has jurisdiction over employers and employees in that sector. Where the bargaining council has jurisdiction, disputes must be referred there rather than to the CCMA. The council's constitution and main collective agreement govern the applicable procedures.

5.2 The Referral and Conciliation Process

An employee must refer a dismissal dispute within 30 days of the date of dismissal, or the date on which the employee became aware of the dismissal. This time limit is strict, and late referrals require a separate application for condonation, which the employee must motivate.

The process unfolds as follows:

1. The employee completes the prescribed referral form (LRA Form 7.11 at the CCMA, or the equivalent at the bargaining council) and serves a copy on the employer.

2. The CCMA or council schedules a conciliation hearing. This is a private, confidential, and entirely without-prejudice process. Nothing said during conciliation may be raised in subsequent proceedings.

3. If conciliation succeeds, a settlement agreement is signed, and the dispute is resolved.

4. If conciliation fails, the commissioner issues a certificate of outcome. For ordinary unfair dismissal, the employee then has 90 days to request arbitration. 5. For automatically unfair dismissal, the matter ordinarily proceeds to the Labour Court.

Employers are strongly encouraged to engage meaningfully at conciliation. A well-timed settlement, even where you believe you have a strong case, is often less costly, less time-consuming, and less disruptive to your business than full arbitration or Labour Court proceedings. Always call upon the Employers’ Organisation for Hairdressing, Cosmetology, and Beauty (EOHCB) for assistance and representation at conciliation and or arbitration.

5.3 Practical Tips for Employers Facing Proceedings

1. Do not ignore the referral. Failure to appear at conciliation or arbitration can result in a default award against you with costs, especially in arbitration.

2. Gather your documentation immediately: charge sheets, disciplinary notices, minutes of hearings, outcome letters, written reasons for dismissal, the employee's contract, and attendance records.

3. Be aware of how your internal communications, including WhatsApp messages, emails, and spoken remarks by managers, may be used as evidence of a prohibited motive. Train your managers accordingly.

4. Review whether you followed the correct procedure as set out in the Code of Good Practice: Dismissal and your own disciplinary code.

5. If the claim is framed as automatically unfair, treat it as high-risk from the outset. The maximum compensation exposure of 24 months' remuneration and the potential for Labour Court proceedings make early legal advice essential.

6. Prepare standard documentation packs; charge sheets, minutes, evidence bundles, outcome letters, that can be handed to your EOHCB representative or attorney if the matter escalates to the Labour Court.

7. Consider early settlement or reinstatement offers where there is any real risk that a dispute could be characterised as automatically unfair, given the substantially higher compensation exposure and litigation complexity.

8. Be honest with yourself and your advisers about the strength of your case. If the evidence is against you, prolonging proceedings only increases costs.

How Employers Can Avoid Automatically Unfair and Substantively Unfair Dismissals

6.1 Prevention Is Better Than Cure

The vast majority of unfair dismissal disputes referred to the CCMA and bargaining councils are entirely avoidable. Most arise from one or more of the following common mistakes: acting on impulse without following proper procedure; dismissing without sufficient evidence; failing to apply progressive discipline; or failing to recognise that a protected ground taints an otherwise legitimate dismissal. The practical measures set out below will substantially reduce your exposure.

6.2 Have a Proper Disciplinary Code and Policy in Place

Your disciplinary code should clearly set out the rules of the workplace, categorise misconduct (distinguishing between minor, serious, and dismissible offences), and set out the procedure for handling disciplinary matters. Every employee must receive and acknowledge a copy on commencement of employment.

Your code should address specific matters, but not limited to, such as:

1. Theft of products, tips, or business funds

2. Misuse or misappropriation of client information

3. Failure to meet agreed performance targets or service standards

4. Professional hygiene, appearance, and conduct standards

5. Handling and storage of chemicals in compliance with health and safety requirements

6. Social media conduct relating to the business, clients, or colleagues

6.3 Build and Document Legitimate, Independent Reasons for Dismissal

Where you are dismissing for conduct or performance reasons, explicitly record that protected activities, such as union membership, participation in a protected strike, pregnancy, or the lodging of a grievance, played absolutely no role in the decision. This documentation is your primary defence if an employee later attempts to characterise the dismissal as automatically unfair.

If restructuring or retrenchment overlaps in time with any protected event, the burden is on you to demonstrate, through clear and contemporaneous records, that your reasons are objective and entirely independent of the protected characteristic or activity.

6.4 Conduct Proper Pre-Dismissal Enquiries

Before dismissing any employee for misconduct, a disciplinary hearing is not optional - it is a fundamental procedural requirement. A valid disciplinary hearing requires:

1. Written notice of the charges, given sufficiently in advance to allow preparation

2. An opportunity for the employee to attend and state their case

3. The right for the employee to be assisted by a fellow employee, shop steward, or trade union representative

4. An impartial chairperson who was not directly involved in the incident

5. A written record of the proceedings and a written outcome with reasons

Even if you are completely satisfied that dismissal is warranted, skipping this process exposes you to a finding of procedural unfairness, which, while attracting a lower compensation ceiling than substantive unfairness, still results in an award against you.

6.5 Recognise and Respect Protected Grounds

Train yourself and your managers to identify situations that trigger the automatically unfair dismissal provisions. The following scenarios should cause you to pause and, if necessary, seek advice from the EOHCB before taking any adverse action:

1. An employee has recently disclosed a pregnancy - any disciplinary or termination action in the weeks that follow will attract intense scrutiny.

2. An employee has joined a trade union, attended union meetings, or been involved in union activities - disciplinary action taken shortly after will raise an inference of prohibited motive.

3. An employee has lodged an internal grievance, referred a dispute to the CCMA or bargaining council, or reported wrongdoing in the workplace - clearly document that any subsequent disciplinary action is independently motivated.

4. You are restructuring, and the employees most affected include pregnant women, people with disabilities, union members, or any other group with protected characteristics - ensure your selection criteria are objective, documented, and applied consistently.

5. An employee refuses to agree to a change in their terms and conditions - you may not dismiss them for that refusal without following the full section 189 retrenchment process.

6.6 Apply Progressive Discipline and Proportionality

Unless the misconduct is so serious that it fundamentally and irretrievably destroys the trust relationship, such as serious theft, assault, or gross dishonesty, progressive discipline is expected. For less serious first offences, the appropriate response is ordinarily a verbal or written warning, followed by a final written warning if the behaviour recurs, and dismissal only if warnings have failed to achieve correction.

Dismissal for a first offence that does not merit it will almost invariably result in a finding of substantive unfairness. The proportionality of the sanction to the offence is one of the first things a commissioner will examine.

6.7 Document Everything — Contemporaneously

In a CCMA or bargaining council arbitration, the party with the best documentation almost always has the advantage. Make it a non-negotiable practice to:

1. Issue all warnings in writing, and obtain the employee's signed acknowledgement of receipt

2. Keep minutes of all disciplinary hearings, counselling sessions, and performance management meetings

3. Record the reasons for any dismissal in writing, and provide them to the employee at the time of dismissal

4. Retain all disciplinary records for at least three years

5. Ensure that the characterisation of the dismissal in your internal records, misconduct, poor performance, or operational requirements, is accurate, consistent, and clearly supported by the evidence

6.8 Apply Discipline Consistently

Consistency is a cornerstone of substantive fairness. You must be able to show that you have treated employees in comparable situations similarly, or provide a rational, documented explanation for any differentiation. Keep records of how similar incidents have been handled in the past.

6.9 Seek Advice Before Acting

If you are in any doubt about whether a proposed dismissal is lawful, particularly if it involves any of the protected grounds listed in section 187, or if the evidence against the employee is ambiguous, seek advice from your EOHCB representative before you act. The cost of professional advice before a dismissal is almost always a fraction of the cost of defending an unfair dismissal claim that could have been avoided.

In conclusion, the distinction between automatically unfair dismissals and substantively unfair dismissals is not an abstract legal technicality. It has real, tangible consequences for employers and their managerial staff in the hairdressing, cosmetology, beauty, and skincare industry; consequences that touch your business's finances, your team's morale, and your reputation as a fair employer.

An automatically unfair dismissal, one connected to pregnancy, union membership, the exercise of labour rights, refusal to accept a unilateral change to terms and conditions, or any other prohibited ground under section 187 of the LRA, exposes you to compensation of up to 24 months' remuneration, potential Labour Court proceedings, and constitutional scrutiny that is extremely difficult to overcome. A substantively unfair dismissal, while attracting a lower maximum compensation award of 12 months' remuneration, is equally disruptive to defend and equally damaging to workplace culture.

The two-stage causation test applied in automatically unfair dismissal cases means that mixed motives, a legitimate reason combined with a prohibited ground, may not save an employer where the protected ground was the dominant cause. Documentation of genuinely independent, objective reasons for dismissal is not optional; it is your primary shield.

The critical jurisdictional point that automatically unfair dismissal disputes ordinarily proceed to the Labour Court, not CCMA or Bargaining Council arbitration, underscores the elevated risk and cost profile of these claims. Early, well-considered engagement is essential.

Both types of unfair dismissal are, in the overwhelming majority of cases, entirely preventable. A workplace culture grounded in fairness, procedural rigour, consistent discipline, and meticulous documentation will go a long way towards ensuring that you never face either type of claim.

Know your protected grounds. Follow your procedure. Apply your discipline consistently and proportionately. And when you are in doubt, ask your EOHCB representative.