Constructive dismissal is now a well-known concept in employment law. If there was any grey area surrounding the concept, the court of appeal in the leading case of Coca Cola East & Central Africa Limited v Maria Kagai Ligaga [2015] eKLR dealt with the subject extensively. Guided by that decision, we dare say that locally, the law is settled on what constitutes constructive dismissal. The main principles distillable from that decision on what constitutes constructive dismissal include:
- It must be shown that the employer has created a hostile work environment making it difficult for the employee to continue discharging their contractual obligations;
- The employer must be shown to have breached the fundamental terms of the contract;
- It must be shown that the employer no longer considered themselves to be bound by the terms of the contract; and
- The employee must have resigned, believing themselves to have been fired.
If the facts of a particular case tick all the above boxes, then a case has been made out for constructive dismissal. In that case, an employee will be entitled to some relief. The question therefore arises, what relief?
Our case on this point is Deya v Safaricom Limited (Cause 630 of 2019) . The facts of the case are not immediately integral to this discussion. Suffice it to point out that the claim was centered on constructive dismissal. The learned judge found that the claimant did not establish a case for constructive dismissal. He ultimately dismissed the claim.
What particularly captures our attention is how the learned judge analyses the reliefs that the claimant had sought. We hear the judge to say that much as the claimant had pleaded constructive dismissal, he sought compensation under Section 49 (1) (c) of the Employment Act, 2007 (the Employment Act). This section empowers the court to award compensation the equivalent of a number of months wages or salary not exceeding twelve months based on the gross monthly wage or salary of the claimant in cases of wrongful dismissal and unfair termination. Therefore, in the case at bar, the claimant seemed to be under the impression that constructive dismissal equates to unfair dismissal.
The learned judge was of a different view. To his mind, the concept of constructive dismissal is not the same as unfair dismissal or termination.
Unfair dismissal or termination is a statutory concept, regulated by Sections 41, 43 and 45 of the Employment Act. To establish unfair termination, there are statutory standards relating to procedure and substantiation under those sections of the Employment Act. The reliefs for unfair dismissal or termination are prescribed at Section 49 of the Employment Act. As observed earlier, the compensation is capped at twelve months gross wage or salary. It is also important to note that claims under unfair termination have a time-bar under Section 90 of the Employment Act.
To the judge, constructive dismissal is a common law concept whose principles have been refined by judicial decisions such as the Coca Cola East & Central Africa Limited case above. The concept is neither in the Employment Act nor other labour statutes. The circumstances giving rise to constructive dismissal are not determined by an Act of Parliament. Equally, there are no statutory standards relating to procedure and substantiation when it comes to constructive dismissal. Constructive dismissal, not being a statutory concept, will not be subject to the time-bar under the Employment Act.
With this distinction, the judge opined that unfair termination and constructive dismissal cannot have the same remedies. To the judge, for example, it is doubtful whether somebody who is constructively dismissed can validly claim the relief of reinstatement.
In the judge’s view, the most effective relief in cases of constructive dismissal is an award of damages. The judge noted that Section 12 (3) (v) & (vi) of the Employment and Labour Relations Court Act, 2011 consciously differentiates between an award of compensation and an award of damages. To the judge, whereas compensation for unfair termination attracts statutory capping, damages for constructive dismissal would not be subject to statutory capping.
Quite correctly, the judge observed that courts have awarded statutory capped compensation in cases where there was constructive dismissal. See, for example, Peter Kaburu Karanja v Kirinyaga Construction (K) Limited [2020] eKLR and John Kimingi v Damco Logistics Kenya Limited [2021] eKLR.
Incidentally, in the Coca Cola East & Central Africa Limited case, the court of appeal affirmed the learned judge’s award of 9 months gross salary as compensation for the employee who had been constructively dismissed.
However, now with the learned judge’s reasoning in Deya v Safaricom Limited case, has the time come for the employment court to award damages at large for constructive dismissal without feeling hamstrung by the statutory capping that applies to compensation for unfair termination?
We are following.
