Understanding Constructive Dismissal Under Kenyan Employment Law

Can an Employer Force You to Resign?

Most people think that losing a job only happens when an employer issues a dismissal or termination letter. However, that is not always the case.

Sometimes an employer makes the workplace so difficult, hostile or unfair that an employee feels they have no choice but to resign. In the eyes of the law, that resignation may not be voluntary. It may amount to what is known as constructive dismissal.

What is Constructive Dismissal?

Constructive dismissal happens when an employer’s conduct forces an employee to resign. It is simply dismissal that is brought about by the employer’s conduct. It comes into play when an employee resigns because the employer has made the working conditions so difficult, unfair or unbearable that the employee feels they have no real choice but to leave. Although the employee resigns, the law may treat it as if the employer dismissed them.

In simple terms, the employer does not say, “You are fired,” but their actions make it impossible for the employee to continue working. The law may therefore treat the resignation as if the employer dismissed the employee.

Although the Employment Act, 2007 does not specifically define constructive dismissal, Kenyan Courts have recognised it as a form of unfair termination. This protection is also consistent with Article 41 of the Constitution, which guarantees every worker the right to fair labour practices.

A simple Example

Imagine an employee who has worked faithfully for several years.

One day, the employer suddenly cuts the employee’s salary by half without consultation. The employee is also stripped of key responsibilities, publicly humiliated in front of colleagues and repeatedly threatened with dismissal.

After several months of enduring the treatment, the employee resigns because continuing to work has become unbearable.

Even though the employee wrote the resignation letter, a court of law may find that it was actually the employer’s conduct that ended the employment relationship. That is constructive dismissal.

What Kind of Employer Conduct Can Amount to Constructive Dismissal?

Every situation is different, but some common examples include:

• Failing to pay an employee’s salary or persistently delaying payment.
• Reducing an employee’s salary without agreement.
• Demoting an employee without a valid reason.
• Harassment, bullying or intimidation at work.
• Discrimination or victimisation.
• Unilaterally changing important terms of employment without the employee’s consent.
• Creating a hostile or unsafe working environment.
• Any conduct that destroys the trust and confidence that should exist between an employer and an employee.

Not every disagreement at work amounts to constructive dismissal. The employer’s
conduct must be serious enough that a reasonable employee would feel they have no real
option except to resign.

What Must an Employee Prove?

An employee claiming constructive dismissal must generally show that:

• The employer fundamentally breached the employment contract or acted unfairly.
• The employer’s conduct made it unreasonable to continue working.
• The resignation was caused by the employer’s conduct.
• The employee resigned within a reasonable time after the conduct occurred.

An employee who believes they have been constructively dismissed should not continue working indefinitely after the employer’s misconduct. If they do, the Court may find that they accepted the employer’s conduct and chose to remain in employment. To succeed in a claim for constructive dismissal, the resignation should be made within a reasonable time, and where possible, the resignation letter should explain that the employee is leaving because of the employer’s conduct. This helps demonstrate that the resignation was not voluntary but was caused by the employer’s actions.

The Leading Kenyan Case

The leading authority on constructive dismissal in Kenya is the Court of Appeal decision in Coca Cola East & Central Africa Limited v Maria Kagai Ligaga [2015] eKLR.

In that landmark case, the Court explained that constructive dismissal occurs where an employer commits a fundamental breach of the employment contract, one that goes to the root of the employment relationship. The Court further held that the employee must prove that the employer’s conduct was the real reason for resigning and that the employer’s actions would objectively be considered intolerable by a reasonable person.

This decision remains the guiding authority applied by the Employment and Labour Relations Court in determining constructive dismissal claims.The Courts continue to apply the principles laid down in the Maria Kagai Ligaga case.

A more recent case of Odhiambo v Stima Investment Co-operative Society Limited [2026] KEELRC 199 (KLR), the Employment and Labour Relations Court reiterated that an employee who resigns because of an intolerable work environment created by the employer may successfully establish constructive dismissal. The Court also observed that an employee is not required to use the words “constructive dismissal” in a resignation letter; what matters is whether the surrounding circumstances show that the employer’s conduct forced the resignation.

What Remedies Are Available to an employee in such a case?

If a Court finds that an employee was constructively dismissed, it may award remedies similar to those available for unfair termination, including:

• Compensation for unfair termination.
• Salary in lieu of notice where appropriate.
• Payment of unpaid salary, leave pay and other employment benefits.
• Any other remedy the Court considers fair in the circumstances.

If an employee successfully proves constructive dismissal, the Court may order the employer to pay compensation for unfair termination. The Employment Act allows the Courts to award compensation of up to twelve (12) months’ gross salary, although the exact amount will depend on the facts of each case.

Conclusion

Constructive dismissal reminds employers that unfair treatment can be just as unlawful as an outright dismissal. Employers should therefore ensure that workplace decisions are lawful, fair and respectful of employees’ contractual rights.

For employees, resigning should never be the first response to workplace challenges. Where possible, concerns should first be raised internally and documented. If the employer’s conduct continues and becomes unbearable, it is advisable to seek legal advice before resigning, as the circumstances surrounding the resignation will often determine whether a claim for constructive dismissal can succeed.

At Rotich & Mathenge Advocates LLP, we regularly advise both employers and employees on workplace disputes, employment contracts, disciplinary processes and claims for unfair termination. Early legal advice can often prevent workplace disputes from escalating into lengthy and costly litigation.

By: Ann Mathenge