High court has delivered a landmark employment ruling with far-reaching consequences for workers and employers alike — finding that an employee who rejects a workplace reassignment cannot automatically claim constructive dismissal or pocket compensation for unfair termination.
The Employment and Labour Relations Court sitting in Machakos, in a judgment by Lady Justice Jemimah Keli, overturned a lower court decision that had awarded former Softcare Kenya Company Limited employee Phauletta Ndinda Mutungi Ksh259,668 — equivalent to twelve months’ salary — for alleged unfair termination.
The case began when Mutungi developed hearing complications after working in a noisy factory environment. Her employer, responding to her medical condition, reassigned her to cleaning duties. She rejected the offer outright, insisting instead on deployment as a security guard — a position the company said was not available at the time.
When the employment relationship subsequently ended, Mutungi moved to the lower court in Mavoko, which ruled in her favour and awarded the full compensation. Softcare Kenya challenged that outcome.
On appeal, Justice Keli found the employer had acted squarely within its managerial authority. The company had invited Mutungi to meetings, listened to her concerns, and followed the disciplinary procedures required under Section 41 of the Employment Act — a process the court found to be procedurally sound.
The court drew a sharp legal line between a disagreeable transfer and genuine constructive dismissal.
“There must be a fundamental breach by the employer that leaves the employee with no reasonable option but to resign,” Justice Keli held.
The court further noted: “The warning is therefore twofold — employees must think carefully before rejecting reassignment outright, while employers must ensure every transfer is lawful, reasonable, and procedurally fair.”
Finding no fundamental breach in this case, the appellate court cancelled the compensation award. Mutungi walked away with only one month’s salary in lieu of notice and a certificate of service. The court also clarified that any claims arising from workplace injuries sustained during her employment must be pursued separately under the Work Injury Benefits Act (WIBA).
The ruling aligns with the established legal test for constructive dismissal in Kenya, anchored in the Court of Appeal’s landmark Ligaga (2015) decision, which requires employees to prove a fundamental employer breach, a direct causal link to their resignation, and a timely exit from the employment relationship.
For Kenyan workers, the judgment is a sobering reminder that unhappiness with a new role — however genuine — does not, on its own, amount to forced resignation in the eyes of the law.
