Career advice · Updated October 2026

Constructive Dismissal in Kenya: When Resigning Counts as Being Fired

Sometimes an employer does not fire you; it makes staying impossible. Salary stops arriving, you are demoted without a reason, or your job is quietly given to someone else. If you resign because of that kind of conduct, the law may treat your resignation as a dismissal. This is constructive dismissal in Kenya. It is not defined in the Employment Act, 2007, so the rules come from the courts, above all the Court of Appeal’s decision in Coca Cola v Ligaga. This guide explains the test, gives examples, and sets out what to do before you hand in that letter.

The legal test: Coca Cola v Ligaga

In Coca Cola East & Central Africa Limited v Maria Kagai Ligaga [2015] KECA 394, the Court of Appeal chose the contractual test over a looser “unreasonable conduct” test. Under it:

1. There must be a fundamental breach. The employer’s conduct must be a significant breach going to the root of the contract, or must show that the employer no longer intends to be bound by one or more of its essential terms.
2. The test is objective. The question is whether the conduct, viewed fairly, amounts to such a breach, not whether you felt wronged.
3. The breach must be the effective cause of leaving. You must resign because of it, not for an unrelated reason such as a new job offer.
4. You must act within a reasonable time. If you carry on working for a long time without objection, you may be treated as having accepted the change.
5. The burden is on you. The employee must prove the breach and that it caused the resignation.

The court also said you may resign with or without notice. Giving notice does not, by itself, defeat a claim, so long as the employer’s breach is the real reason you leave.

Examples that can amount to constructive dismissal

Each case turns on its facts, but these are the kinds of conduct that can go to the root of the contract:

• Not paying salary, or repeatedly paying it late or in part. Pay is the core term of any employment contract, and section 17 of the Act requires wages to be paid in full.
• A unilateral pay cut. Section 10(5) requires changes to the written particulars to be made in consultation with the employee, and a cut imposed without agreement can be a breach.
• Demotion without cause or process, such as a change of title, grade or reporting line that strips your role.
• Removing your duties or giving your job to someone else while you are still employed.
• A transfer that breaches the contract, for example to a distant station where the contract does not allow it.
• Serious harassment or humiliation that the employer causes or fails to stop. See our guides on sexual harassment and discrimination at work.
• Pressure to resign, such as being told to sign a resignation letter or be dismissed.

What usually does not count: a reasonable instruction you dislike, fair criticism of your performance, a lawful disciplinary process, or a change your contract expressly permits.

What to do before you resign

Resigning is a big step, and the claim can be lost through how you do it. Before you leave:

1. Raise the issue in writing. Email or write to HR or your manager, describe the breach, and ask for it to be fixed by a specific date. This shows you did not accept it.
2. Use the grievance process in your contract or HR manual, if there is one. Keep copies of everything.
3. Collect evidence. Payslips, bank or M-Pesa records showing late or missing pay, the letter that demoted you, messages telling you to resign.
4. Do not wait too long. Ligaga makes clear that staying on for months without objection can count as accepting the change.
5. State the reason in your resignation letter. Say clearly that you are resigning because of the employer’s breach, and name it. Keep the tone factual. Our resignation letter generator gives you a clean format you can edit to add the reason.
6. Ask for your dues and certificate of service in the same letter.

Constructive dismissal and unfair termination

Once a court finds constructive dismissal, the resignation is treated as a termination by the employer. The usual rules then apply: under section 43 the employer must prove a valid reason, and under section 45 a termination is unfair if the reason is not valid or fair procedure was not followed. In a constructive dismissal case, there is rarely a reason or a hearing, so the termination is usually unfair.

The remedies are those in section 49. The court can award notice pay, wages due, and compensation of up to 12 months’ gross salary. In Postal Corporation of Kenya v Tanui [2019] KECA 489, the Court of Appeal stressed that the maximum award needs a reasoned basis under section 49(4), and reduced a 12-month award to six. Expect the court to weigh your length of service, conduct and chances of finding new work. Our unfair termination guide covers the factors.

When the claim fails

Courts often reject constructive dismissal claims. In SWM v Hardware Trading Store [2021] KEELRC 1423, the ELRC said constructive dismissal had not been pleaded, and that in any case it must come from an employee leaving because of intolerable conditions that are clearly set out. Common reasons for failure include:

• the employee left for another job and raised the breach only later;
• the “breach” was a lawful instruction or a change the contract allowed;
• there was no written complaint before resigning; or
• the employee stayed on for a long time after the change.

Deadlines

Section 89 generally requires a claim within three years of the act complained of, or within 12 months after a continuing injury ends. If you also want a labour officer to look at it, section 47(1) says dismissal complaints should be made within three months. Our guide on filing a case at the ELRC or labour office walks through both.

Working out what you are owed

Add up unpaid salary, notice pay, untaken leave, and any service pay due under section 35(5). The terminal dues calculator does the arithmetic, and our terminal dues guide explains each item. If you are moving on, Business Radar explains your options for pension savings when you leave a job.

Key takeaways

• Constructive dismissal means resigning because of the employer’s fundamental breach of the contract.
• The Court of Appeal in Coca Cola v Ligaga (2015) set an objective contractual test, with the burden on the employee.
• Non-payment of salary, unilateral pay cuts, demotion and pressure to resign are typical examples.
• Complain in writing first, act quickly, and state the reason in your resignation letter.
• If proved, it is treated as unfair termination, with remedies under section 49.

Read our plain-English guide to the Employment Act, and browse jobs in Kenya as you plan your next move.

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