MANAGING MISCONDUCT INVESTIGATIONS CORRECTLY

Written by Melissa Eales

Navigating Procedural and Substantive Fairness in the workplace with the new Code of Good Practice on Dismissal (2025) - In a hair and or beauty establishment, an employee's repeated misconduct triggers a formal investigation. Whether the employer handles this process fairly, both procedurally and substantively, will determine whether any eventual dismissal can be defended at the National Bargaining Council for the Hairdressing, Cosmetology, Beauty and Skincare Industry (HCSBC) or CCMA.

The introduction of the Code of Good Practice: Dismissal, gazetted on 4 September 2025, provides clear guidance on how hairdressing and beauty establishments can conduct misconduct investigations in line with the Labour Relations Act 66 of 1995 (Section 188) and long-established case law.

The Code does not rewrite the law but consolidates and clarifies existing principles, reinforcing that all dismissals must be both procedurally and substantively fair, assessed on the facts of each case.

Purpose of Discipline in the Workplace

The Code reinforces that the primary purpose of discipline is not punishment, but correction and guidance. Employees must know workplace standards and be given a reasonable opportunity to improve their behaviour where appropriate, with a preference for progressive steps rather than “snap” dismissals. This emphasis on corrective discipline aligns with modern labour law principles, which favour progressive discipline over immediate punitive action.

Rules need not always be written, but they must be reasonable, consistently applied, and known (or reasonably knowable) to employees. Minor transgressions can often be dealt with informally in terms of the employer’s disciplinary code, whereas serious or repeated misconduct will usually justify formal action. This was reinforced in NUMSA obo Nganezi v Dorbyl Ltd (2006) 27 ILJ 1806 (LC), where the inconsistent application of rules rendered a dismissal unfair. In that matter, employees were dismissed for misconduct, but the court held that failing to enforce rules uniformly made the dismissal substantively unfair.

Procedural Fairness: “The Process”

Procedural fairness lies at the heart of any disciplinary process. It refers to the process followed by the employer before imposing any sanction, including warnings or dismissal. Rooted in the audi alteram partem principle (the right to be heard), procedural fairness ensures that employees are treated with dignity and given a genuine opportunity to respond to the allegations against them.

In practice, this means employees should:

• Be informed of the allegations in sufficient detail.

• Be given a reasonable opportunity to respond.

• Be allowed representation where applicable.

• Participate in a process that is impartial and transparent.

The new Code does not prescribe a rigid or overly formal disciplinary hearing process in all cases. In straightforward matters, written representations or an informal meeting may be sufficient. However, where there are disputes of fact or where dismissal is contemplated, a formal disciplinary enquiry remains best practice to ensure that all evidence is properly ventilated. In SA Chemical Workers Union v Ballengeich Engineering (Pty) Ltd (2001) 22 ILJ 1489 (LC), employees were dismissed for misconduct without the employer following its own internal procedures. The court held that internal policies and collective agreements prevail over general codes if they are stricter, and that breaching them can result in procedural unfairness even if the reason for dismissal is otherwise fair.

Three-Step Fairness Test

A practical way for employers to structure disciplinary decision-making is to apply a three-step test.

1. Establish Procedural Fairness

Before considering guilt or innocence, the employer should ensure that a fair process has been followed. This includes a proper investigation, clear communication of the charges, and a fair opportunity for the employee to be heard. In proceedings before the CCMA or the HCSBC, the burden rests on the employer to prove procedural fairness.

2. Determine Guilt (Substantive Inquiry)

Only once procedural fairness is established should the employer evaluate the evidence to determine whether misconduct occurred. This is assessed on a balance of probabilities: is it more likely than not that the employee committed the misconduct? In EFWU obo Oosthuizen v Standard Bank of SA Ltd (2000) 21 ILJ 951 (LC), the court confirmed that substantive guilt must be proven on a balance of probabilities and that the employer must lead evidence to meet this threshold.

3. Decide on an Appropriate Sanction

If misconduct is proven, the employer must then decide on an appropriate sanction, taking into account all relevant mitigating and aggravating factors. This structured approach helps to avoid premature conclusions and supports disciplinary decisions that are both balanced and defensible.

Substantive Fairness: “The Why” of Discipline

Substantive fairness focuses on whether there is a valid and fair reason for disciplinary action. It requires employers to go beyond merely showing that a rule was broken and to consider the broader context of the misconduct.

To establish substantive fairness, employers should consider:

• Whether a valid and reasonable rule existed.

• Whether the employee knew, or reasonably ought to have known, about the rule.

• Whether the rule was consistently applied.

• Whether the employee actually breached the rule.

• Whether the breach was wrongful and attributable to fault (intent or negligence).

Even where a rule has been contravened, misconduct is not automatically established. If an employee has a valid justification, such as acting under duress or necessity, disciplinary action may not be appropriate. The new Code further emphasises two critical considerations:

• The importance of the rule that was breached.

• The actual or potential harm caused by the misconduct.

These factors assist employers in assessing the seriousness of the offence and in determining whether the sanction is proportionate.

In Cape Town City Council v Loynes (1997) 18 ILJ 1566 (LAC), the employee argued that breach of a rule was justified by necessity. The court stressed that substantive fairness requires the employer to prove that the breach was wrongful and culpable. Where a valid defence exists, misconduct is not established, even if the rule itself is clear. In such cases, the employer must be able to justify why the breach is so serious that it warrants disciplinary action.

When Is Dismissal Fair?

Dismissal is the most severe sanction available to an employer and should be reserved for cases where continued employment has become intolerable. This requires a careful value judgment, taking into account multiple factors rather than applying a mechanical checklist.

Key considerations include:

• The nature and seriousness of the misconduct.

• The employee’s position and responsibilities.

• The impact of the misconduct on the establishment.

• The employee’s length of service and disciplinary record.

• Whether progressive discipline could reasonably correct the behaviour.

• The employee’s acknowledgement (or lack thereof) of wrongdoing.

• Consistency with previous cases.

Consistency remains important, but it is not absolute. Where the employment relationship has irretrievably broken down, dismissal may still be justified even if previous sanctions were more lenient in similar cases. This approach reflects long-standing judicial principles, particularly those set out in the Constitutional Court decision in Sidumo v Rustenburg Platinum Mines Ltd (2007) 28 ILJ 2405 (CC), which cautions against rigid checklists in favour of a holistic fairness assessment. Likewise, in Southern Sun Hotel Interests (Pty) Ltd v CCMA (2009) 30 ILJ 2451 (LC), the court confirmed that while inconsistency is a factor, contextual elements such as loss of trust and lack of remorse can justify dismissal even where other employees previously received lighter sanctions.

Procedural Fairness in Practice

While the new Code allows for flexibility, best practice still supports a structured disciplinary process. A procedurally fair process will typically include:

• A properly documented complaint and preliminary investigation.

• Clear written notification of the charges and possible consequences.

• Adequate time for the employee to prepare.

• An opportunity for the employee to present evidence and challenge witnesses.

• An impartial chairperson or decision maker.

• A reasoned outcome communicated in writing.

Employers must be mindful of practical challenges such as language barriers, lack of representation, or unreasonable delays, as these can undermine fairness if not properly addressed. An overly informal process may fail to meet basic fairness standards, while an excessively formal process may intimidate employees and create unnecessary complexity.

In Motlhamme v Rustenburg Platinum Mines Ltd (2000) 21 ILJ 1865 (LC), the court criticised procedural barriers such as language difficulties and inadequate preparation time. It stressed that addressing such challenges (for example, through representation, interpreters, and clear explanations) is vital, and that ignoring them can render an otherwise fair dismissal procedurally unfair. In Gibbons v CCMA (2001) 22 ILJ 2721 (LC), the court further illustrated how procedural flaws such as failure to properly notify the employee or to allow representation can invalidate an otherwise justified dismissal.

Common Pitfalls and Risks

Despite clear guidance, employers frequently fall into familiar traps, including:

• Rushing disciplinary processes to reach a quick outcome.

• Providing vague or incomplete charges that leave employees unsure of the case they must meet.

• Failing to apply rules and sanctions consistently.

• Appointing biased or conflicted chairpersons.

• Ignoring internal policies or collective agreements.

These missteps can render an otherwise valid dismissal unfair. Even where misconduct is clearly established, procedural flaws alone can result in reinstatement or substantial compensation.

Consequences of Unfair Dismissal

Non-compliance with procedural and substantive fairness principles can have serious legal and practical consequences. The HCSBC, CCMA, or Labour Court may order:

• Reinstatement of the employee.

• Re-employment on similar terms.

• Compensation of up to 12 months’ remuneration (and up to 24 months in cases such as automatically unfair dismissals).

Beyond the legal risks, unfair disciplinary practices can damage workplace morale, erode trust, and harm an employer’s reputation. Conversely, consistent application of fairness principles helps to build a culture of accountability, respect, and transparency.

Aligning Workplace Policies with the New Code

A key takeaway from the new Code is that internal policies and procedures remain binding on the employer. Hair and or beauty establishments that wish to benefit from the Code’s flexibility should review and, where necessary, amend their disciplinary procedures so that they are aligned with the Code and are realistically workable in practice.

Training for managers, HR practitioners, and line supervisors is equally important. The principles of procedural and substantive fairness are often misunderstood or applied inconsistently, giving rise to the “grey areas” that so often lead to disputes. Practical training, case-based workshops, and clear internal guidelines can help close this gap.

The 2025 Code of Good Practice: Dismissal does not change the fundamental principles of workplace discipline; it clarifies, consolidates, and reinforces them. At its core, South African labour law continues to demand fairness in both process and outcome. For the establishment in our opening example, strict adherence to these principles would not only ensure compliance but also foster a culture of fairness that protects the business and its employees alike. Employers who embrace this principle not only in policy but in daily practice will ensure legal compliance and build stronger, more resilient hairdressing and beauty establishments.