CONSTRUCTIVE DISMISSAL

Constructive dismissal arises where an employee resigns because the employer’s conduct has fundamentally breached the employment contract, effectively forcing the employee to leave.

Kenyan courts have adopted common law principles, treating constructive dismissal as a repudiatory breach by the employer. Unlike ordinary termination claims, the burden of proof lies with the employee.

In Western Excavating (ECC) Ltd v Sharp [1978] ICR 222, Lord Denning famously stated that where an employer’s conduct goes to the root of the contract or shows an intention not to be bound by its essential terms, the employee is entitled to treat the contract as terminated and leave.

This definition has been consistently applied in Kenyan jurisprudence.

The Kenyan Legal Test

The Court of Appeal in Coca Cola East & Central Africa Limited v Maria Kagai Ligaga [2015] KECA 394 (KLR) set out the guiding principles for constructive dismissal in Kenya. The court emphasised that:

• The employer must have committed a fundamental or significant breach of the employment contract.
• An objective test applies to the employer’s conduct.
• There must be a causal link between the employer’s conduct and the employee’s resignation.
• The employee must resign within a reasonable time.
• The employee must not have waived, accepted or acquiesced in the breach.

Crucially, the employer’s conduct must be the effective cause of the resignation.

Non-Payment of Salary as a Fundamental Breach

Kenyan courts have recognised that non-payment or delay in salary can amount to a repudiatory breach. In Karimi v Katheri Farmers’ Co-operative Society Limited [2024] KEELRC 2195 (KLR), the court listed non-payment of salary among the circumstances capable of grounding a claim for constructive dismissal, alongside unilateral variation of contract terms, indefinite suspension without pay and mistreatment.

Salary is the core consideration under an employment contract. Where it is withheld for a prolonged period, the commercial foundation of the contract is undermined.

On the face of it, prolonged non-payment strongly supports a constructive dismissal claim.

Causation and Silence

Despite strong underlying facts, many constructive dismissal claims collapse on causation.

Courts closely scrutinise the employee’s conduct at the point of exit. Did the employee clearly link their resignation to the employer’s breach?

In Kihara v Almasi Bottlers Limited & another [2025] KECA 1893 (KLR), the Court of Appeal dismissed a constructive dismissal claim where the resignation letter was neutral, made no reference to grievances and suggested an amicable separation. The court held that the absence of contemporaneous protest undermined the claim and pointed to a voluntary resignation.

Similarly, in Godfrey Allan Tolo, the court held that an employee must resign within a reasonable time as a result of hostile conditions and that the employer’s conduct must be the effective cause of the resignation.

Where an employee resigns without documenting dissatisfaction particularly through a neutral or appreciative resignation letter courts may infer acceptance or acquiescence, even where breaches occurred.

Comparative Analysis

Kenyan courts are not alone in emphasising intolerability, causation and the absence of voluntariness in constructive dismissal claims. Comparable principles have emerged in other East African jurisdictions.

In Tanzania, the test of intolerability was articulated in Katavi Resort v Munirah J. Rashid [2013] LCCD 161 and later restated in Ledgar Nyagawa and Isaya Bangulamura v Sputnik Engineering Co. Limited. The courts identified the following guiding principles:

1. Employer should have made the employment intolerable.
2. Termination should have been prompted or caused by the conduct of the employer.
3. Employee must establish there was no voluntary intention by the employee to resign.
4. The employer must have caused the resignation.
5. The arbitrator or court must look at the employers conduct as a whole and determine whether its effects, judged reasonably and sensibly, is that the employee cannot be expected to put up with it.

The Problem with Neutral Resignation Letters

A resignation letter that omits reference to:

• Unpaid salary
• Hostile working conditions
• System lockouts
• Undermining of authority

creates a serious evidentiary gap.

In Catherine Kinyany v MCL Saatchi & Saatchi [2013] KEELRC 583 (KLR), the court emphasised that constructive dismissal requires conduct that makes continued employment extremely difficult. A voluntary resignation, unsupported by evidence of protest, will not suffice.

Even where constructive dismissal is difficult to prove, employees may still pursue contractual and statutory entitlements, including:

• Salary arrears
• Accrued leave
• Notice pay
• Reimbursements

These claims do not depend on proving intolerable conditions or causation. They only require proof that the amounts were due and unpaid.

Constructive dismissal, while attractive, should be pleaded cautiously and supported by a solid documentary trail.

Practical Takeaways

1. For employees:
2. Document grievances early and in writing.
3. Protest non-payment and hostile conduct contemporaneously.
4. Ensure resignation letters reflect the true reason for leaving.
5. Silence may be construed as consent.

• For employers:
• Prolonged non-payment of salary is a serious legal exposure.
• Operational exclusion and undermining authority can support claims of repudiatory breach.
• Poor documentation increases litigation risk.

CONCLUSION

Constructive dismissal cases are rarely lost because the employer’s conduct was acceptable. They are lost because the evidence does not show that the conduct caused the resignation.

In employment law, unfairness alone is not enough. Timing, documentation and clarity at exit are decisive.