What is Constructive Dismissal?
Constructive dismissal occurs when an employee resigns because their employer has made working conditions unbearable or intolerable. Unlike a normal termination—where the employer directly ends the contract—constructive dismissal happens when the employer’s conduct effectively forces the employee to quit.
Although the Employment Act, 2007 does not expressly mention constructive dismissal, Kenyan courts recognize it under common law and through Article 41(1) of the Constitution, which guarantees every person the right to fair labour practices.
Employer Conduct That May Lead to Constructive Dismissal
Certain behaviours or decisions by an employer can amount to a repudiatory breach of contract—meaning they fundamentally violate the employment agreement. Examples include:
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Unilateral changes to the employment contract, such as reducing salary or demoting an employee without consent.
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Delayed or non-payment of salaries.
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Harassment, bullying, or discrimination at the workplace.
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Unreasonable changes to working hours, duties, or the place of work.
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Suspension without pay or being kept on indefinite disciplinary hold.
These actions may indicate that the employer no longer intends to be bound by the terms of the employment contract.
The Legal Test for Constructive Dismissal
The test for determining constructive dismissal was first established by Lord Denning in Western Excavating ECC Ltd v. Sharp [1978] 2 WLR 344. According to the case:
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The employer must be guilty of conduct amounting to a serious breach of contract.
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The employee must treat themselves as discharged from further performance of the contract.
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The employee may resign immediately or with the required notice, depending on the situation.
In Kenya, the case of Mwaniki v. Tihan Ltd further clarified that:
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The employee must have resigned; and
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The resignation must be a direct result of the employer’s actions making the work environment intolerable.
Remedies for Constructive Dismissal
An employee who successfully proves constructive dismissal is entitled to remedies similar to those for unfair termination under Sections 49 and 50 of the Employment Act. These remedies may include:
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Compensation for unfair termination;
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Payment in lieu of notice;
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Accrued benefits such as leave days or unpaid salary.
Reinstatement, however, is not an available remedy because the employee has already deemed the workplace intolerable and ended the contract.
Final Thoughts
Constructive dismissal cases can be complex and fact-specific. If you believe you have been forced to resign due to your employer’s actions—or if you are an employer seeking to understand your legal obligations—it’s advisable to seek professional legal counsel.
For assistance or further information, contact us at:
📧 info@wanjikumaina.co.ke
📞 0769 022 298
