Introduction

Apart from traditional methods of terminating an employment contract via notice of termination, payment in lieu of notice, summary dismissal and redundancy, courts have acknowledged that an employee may resign and still claim damages against the employer for unfair termination (also known as constructive dismissal). Normally, when an employee resigns, he or she is not entitled to claim damages against the employer. Indeed, if the employee resigns without giving the requisite contractual notice, the employer is entitled to recover the pay in lieu of notice through legal proceedings and there is usually no valid defence to such a claim.

Intolerable treatment

The doctrine of constructive dismissal stems from the fact that there is an implied term in every employment contract that the employer will not, without a reasonable cause, conduct itself in a manner that fundamentally damages the relationship with the employee or makes the working environment unbearable for the employee. The doctrine is well established in the United Kingdom, South Africa and other developed jurisdictions, where it is codified in statute and entrenched in case law. While the doctrine is not yet part of Kenyan statute law, it is rooted in Article 41 of the Constitution which guarantees the right to fair labour practices.

Constructive dismissal arises where an employer, without terminating the employee's contract, treats the employee in such an unreasonable manner that it becomes unbearable for the employee to continue in employment. Under such circumstances, the employee is forced to resign, not as a result of his or her free will, but due to the intolerable treatment by the employer. Therefore, when an employer, by action or omission, materially breaches the terms of the employment contract or otherwise makes it impossible for the employee to effectively perform his or her duties, such employee is entitled to resign and claim damages against the employer for constructive dismissal. The employer, by its conduct, is deemed to have dismissed the employee.

Breaching employment contracts

The Employment and Labour Relations Court appears to have embraced the doctrine of constructive dismissal with gusto. In the leading case on the subject, Coca-Cola East Central Africa Limited v Maria Kagai Ligaga (eKLR, 2015), the court pronounced robustly on this doctrine. The court held that an employee is entitled to leave when the employer's behaviour towards him or her is so unreasonable that the employee cannot be expected to stay. The employer's conduct must be so grave that it constitutes a repudiation of the contract of employment. The breach must go to the root of the contract. In other words, the employer must have breached the terms of the employment contract in such a manner that it is impossible for the employee to continue working effectively.

What leads to constructive dismissal?

There are many scenarios that can lead to constructive dismissal and there is no exhaustive list in this regard. Valid gournds for contructive dismissal include where an employee is subjected to:

  • persistent harassment which continues unabated despite the employee's complaint;
  • frequent and unexplained transfers;
  • unpredictable changes in pre-agreed performance targets;
  • demotion (including change of title even without reduction in pay); and
  • unilateral change in job description.

The employer's conduct does not have to be intentional or in bad faith in order for constructive dismissal to arise. Structural changes within the business could force the employee into a situation where he or she has no choice but to resign. However, there must be a causal link between the employer's conduct and the reason for the resignation.

Resignation

In constructive dismissal, the employee is entitled to leave his or her employment with or without notice, so long as the employer's conduct is the fundamental reason for the resignation. The burden of proof in this regard lies with the employee. There is no valid constructive dismissal if, for instance, the employee notifies the employer of the breach and the employer remedies it or reverses the relevant decision. It is also essential for the employee to demonstrate that he or she had exhausted all internal processes, including the grievance procedure, before resorting to resignation.

An employee might forfeit his or her right to rely on constructive dismissal through acquiescence. This occurs where the employee is shown to have accepted or waived the employer's breach. This can be deduced from the employee's agreement to continue working despite the breach of the employment contract by the employer. To avail of this remedy, the employee must act expeditiously and resign within a reasonable time after the breach has occurred; otherwise, he or she will be estopped from relying on a breach which, by his or her own conduct, the employee has condoned.

Comment

Constructive dismissal is treated as a dismissal by the employer and the employee is entitled to damages for unfair termination, notwithstanding that the employee was not actually fired by the employer.

For further information on this topic please contact William Ikutha Maema at Iseme, Kamau & Maema Advocates by telephone (+254 20 271 1021) or email (wmaema@ikm.co.ke). The Iseme, Kamau & Maema Advocates website can be accessed at www.ikm.co.ke.

 

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