Constructive Dismissal in Kenya: When a Resignation is Treated as a Firing
Constructive dismissal arises when an employer commits a fundamental, toxic breach of the employment contract, leaving the employee with absolutely no reasonable alternative but to resign. Although the employer does not explicitly issue a termination letter, the law looks past the paperwork and treats the employer's hostile conduct as having effectively forced the relationship to an end.
In Kenya, the doctrine of constructive dismissal is rooted in common law and heavily reinforced by the Employment Act, 2007. The Employment and Labour Relations Court (ELRC) consistently recognize that an employer's day-to-day actions, rather than the formal shape of a resignation letter, are the decisive factors in determining whether a worker was driven out unfairly.
The Strict Three-Part Legal Test
To win a constructive dismissal lawsuit before the ELRC, the burden of proof sits on the employee, who must establish three essential legal elements:
1. A Fundamental Breach of Contract by the Employer
The company's behaviour must amount to a severe, repudiatory breach that violates the root of the agreement. Common examples include unilaterally slashing an employee's salary, demoting them without a fair hearing, fundamentally changing their job description, or intentionally creating an abusive, toxic work environment.
In Wachira v CIB Bank [2026], the court awarded a maximum 12 months' gross salary for constructive dismissal, ruling that stripping an employee of their duties, executing a sudden demotion without a Section 41 hearing, and subjecting them to a hostile work environment amounted to a severe contractual breach.
2. Resignation in Direct Response to the Breach
The employee must prove that the employer's specific misconduct was the primary trigger for the exit. If an employee resigns simply because they found a higher-paying job elsewhere or for personal family reasons, a claim for constructive dismissal will fail. There must be a clear, un-broken causal connection.
3. Absence of Affirmation (Acting Promptly)
If an employee endures the toxic treatment or salary cut for an extended period without a formal written protest, the law presumes they have accepted the new terms. This is called "affirming the contract." To succeed, the employee must lodge formal objections and take swift action within a reasonable timeframe.
The Implied Duty of Mutual Trust and Confidence
Every single workplace contract in Kenya carries an unwritten, implied legal duty of mutual trust and confidence. Employers are obligated to refrain from actions that destroy this bond. Grossly ignoring sexual harassment complaints, executing unfair daily disciplinary write-ups, or publicly shaming employees in front of clients breaks this implied trust and gives the worker immediate grounds to walk out and sue for constructive dismissal.
Conclusion
Constructive dismissal ensures that an employer cannot escape severe legal liabilities for unfair termination simply by holding back a formal firing letter. For employers, resolving internal grievances transparently and protecting staff from a hostile environment is your only shield against expensive constructiveness lawsuits. For employees, understanding these strict evidentiary rules is vital to securing your career assets before stepping away from a toxic workplace.
Disclaimer
The information provided in this article is for general informational purposes only and does not constitute legal advice. Prior results do not guarantee a similar outcome. Reading or relying on the contents of this article does not create an advocate-client relationship with our firm. For advice regarding your specific situation, please contact us to obtain professional legal advice with respect to your particular legal matter.
By Ivy Ndirangu