Imagine that you are a senior executive with over 30 years of dedicated service to a company. A high-stakes error occurs , and you genuinely believe it was not entirely your fault. You attend a disciplinary hearing, and before you can even leave the building, the CEO follows you to your office, demands your office keys, gives you ten minutes to write a resignation letter, and warns of immediate dismissal and security escort if you refuse. You scribble a two-line resignation note under pressure and walk out.

Does that sound familiar? This exact scenario played out in a recent landmark ruling that every Kenyan employee, executive, and employer needs to understand. On the 13th of February 2026, the Court of Appeal delivered its judgment in Peter Mutarura Mwaura v CIC Insurance Group Ltd (Civil Appeal No. 548 of 2019). The decision sends a clear message on constructive dismissal , forced resignation law , and unfair termination in Kenya.

What Is Constructive Dismissal Under Kenyan Law?

Constructive dismissal occurs when an employer’s conduct amounts to a repudiatory breach of the employment contract, that is so serious that it shows the employer no longer intends to be bound by its essential terms. The employee is then entitled to treat the contract as terminated and resign without notice.

The legal test, drawn from the classic English case Western Excavating (ECC) Ltd v Sharp and adopted by Kenyan courts, has two limbs:

• The employer’s behaviour must be so unreasonable that no reasonable employee could be expected to stay (the “unreasonable test”), or
• It must constitute a fundamental breach going to the root of the contract (the “contractual test”).

A leading Kenyan authority is Coca Cola East & Central Africa Ltd v Maria Kagai Ligaga [2015] eKLR, where the Court of Appeal confirmed that intolerable working conditions created by the employer can justify constructive dismissal but only if the employee can prove the employer’s conduct left them with no real choice.

The CIC Insurance Case: A Senior Executive’s High-Stakes Battle

Peter Mutarura Mwaura joined the company in 1985 as an Assistant Accountant and rose through the ranks to become Managing Director and Principal Officer of CIC Asset Management Ltd. By 2016 he was earning KSh 1.9 million per month.

Following the collapse of Imperial Bank in October 2015, Mwaura provided the Board and Group CEO with exposure figures that later proved inaccurate (KSh 334 million instead of the actual KSh 605 million). He explained he had relied on information from the Investment Manager. The company issued a show-cause letter, held a disciplinary hearing, and found him guilty of gross negligence.

Crucially, the Board decided to terminate his employment but, in light of his long service, offered him the option to resign instead. Mwaura wrote a simple two-line resignation letter and left. Nine months later he sued, claiming the resignation was procured by force, threat, coercion, and intimidation – in short, constructive dismissal.

The Employment and Labour Relations Court initially agreed it was constructive dismissal but found the termination fair. Both sides appealed.

What the Court of Appeal Actually Decided

In a unanimous judgment by Justices PO Kiage, AO Muchelule, and WK Korir, the Court of Appeal rejected the claim of constructive dismissal and overturned the trial court’s finding.

The Court of Appeal firmly rejected the claim of constructive dismissal, holding that there was no repudiatory breach by the employer. The judges found that CIC Insurance Group Ltd had followed a fair and proper disciplinary process: a formal show-cause letter was issued on 5th February 2016, the appellant submitted a detailed written explanation, and a full disciplinary hearing was conducted on 12th February 2016. Crucially, the Board had valid and substantiated reasons for considering termination, primarily the appellant’s admitted negligence in overseeing investments and failing to ensure accurate reporting of the company’s exposure limits at Imperial Bank. Because the employer acted within the bounds of the Employment Act and afforded the appellant every opportunity to be heard, its conduct could not be regarded as a fundamental breach of the contract that would entitle the employee to resign and claim constructive dismissal.

Furthermore, the Court determined that the appellant’s resignation was voluntary and amounted to what it described as a “soft landing.” After deliberating on the disciplinary findings, the Board resolved to terminate the appellant’s employment for gross negligence but, in recognition of his long service spanning over three decades, offered him the genuine option to resign instead. The appellant chose to accept this opportunity and tendered a simple two-line resignation letter without any indication of protest, duress, or coercion. The Court emphasised that this was not a situation where intolerable working conditions forced the resignation; rather, it was a considered election by a senior executive facing the real prospect of summary dismissal.

Finally, the judges highlighted the critical absence of contemporaneous evidence supporting the claim of coercion. A reasonable employee in the senior position held by the appellant would have expressly stated in the resignation letter that it was being tendered under protest and was involuntary. Instead, the letter was silent on any alleged threats, and the appellant only raised allegations of intimidation and force nine months later, in his demand letter of November 2016. The Court also noted that the pressure complained of stemmed directly from the appellant’s own admitted shortcomings during the disciplinary hearing, where he acknowledged failing to scrutinise reports properly and pleaded for leniency. In the circumstances, he could not credibly claim that the employer had created an intolerable environment when the difficulties arose from his own conduct.

In the end, the Court of Appeal delivered a decisive outcome. It held that there was no constructive dismissal under Kenyan law. The appellant’s claim for a massive payout, including one year’s salary for loss of employment, three months’ notice pay, unpaid salary, and general damages was rejected in its entirety. The only relief granted was payment of twelve (12) days’ unpaid salary for the portion of February 2016 that the appellant had actually worked before his resignation. On the question of costs, the Court exercised its discretion and ordered that each party bear its own costs of both the trial and the appeal. This ruling underscores a clear judicial message: senior employees who choose to resign during a disciplinary process without expressly protesting duress or coercion will find it extremely difficult to later successfully claim forced resignation or unfair termination in Kenya.

Practical Lessons for Employees

If you ever find yourself facing pressure to resign, whether through direct threats, an ultimatum in the CEO’s office, or subtle coercion during a disciplinary process, your next steps can make or break your legal position. Never submit a “clean” resignation letter. Instead, clearly state in writing: “I am resigning under protest and duress as a result of [describe the specific threats, intimidation or coercion]. This resignation is not voluntary.”

Act with speed and precision: document every detail immediately, including dates, times, exact words spoken by your superior or HR, names of witnesses, and any emails or messages. Seek urgent legal advice before you sign or hand over any resignation letter, as even a single conversation with an experienced employment Advocate can safeguard your rights and preserve your options. Most importantly, do not delay. Waiting nine months, as the appellant did in the CIC case dramatically weakens your ability to prove constructive dismissal. The Court of Appeal made it clear: contemporaneous evidence and prompt action are critical.

Practical Lessons for Employers and HR Teams

To protect your organisation from costly claims of constructive dismissal, forced resignation or unfair termination, employers and HR professionals must adopt a disciplined and lawful approach. Strictly comply with the provisions of the Employment Act, 2007 by issuing a proper show-cause letter, affording the employee a fair opportunity to respond, conducting a documented disciplinary hearing, and ensuring that any decision is based on valid, substantiated reasons.

While offering an employee the option to resign as an alternative to dismissal is perfectly lawful and often viewed as a compassionate “soft landing” for long-serving staff, this option must never be presented as a threat, ultimatum, or under circumstances that could later be construed as coercion or duress. Managers and senior leaders should be trained to avoid high-pressure tactics such as demanding a resignation within minutes, seizing office keys, or threatening immediate security escort. Above all, maintain meticulous, accurate minutes of every disciplinary meeting. As clearly demonstrated in the judgment, well-documented minutes can prove decisive in defeating allegations of forced resignation and shielding the company from liability.

When Should You Contact a Lawyer?

Do not wait until you have already signed a resignation letter or accepted a separation package. In matters involving potential constructive dismissal or unfair termination, every hour counts. Contact an experienced employment advocate immediately if you find yourself facing a sudden show-cause letter or being summoned to a disciplinary hearing. The same urgency applies when a manager or superior demands that you resign “or else” face dismissal, or when you are threatened with summary dismissal without being afforded due process and a fair hearing.

You should also seek urgent legal advice if you have already tendered a resignation but now believe it was given under duress, intimidation, or coercion. Employers and HR professionals are equally advised to reach out promptly if they are concerned about a potential claim of unfair termination or constructive dismissal.

In employment disputes of this nature, timing is often the difference between a successful outcome and a lost opportunity. Acting swiftly allows you to protect your rights, preserve critical evidence, and significantly strengthen your legal position before it becomes much harder to remedy the situation.

Take Action Before It’s Too Late

At our firm, we have built a strong reputation for successfully representing both senior executives and organisations in complex constructive dismissal and unfair termination disputes across Kenya. With extensive experience appearing before the Employment and Labour Relations Court and the Court of Appeal, we have consistently secured favourable outcomes for our clients while, where appropriate, preserving important professional relationships.

If you are an employee currently facing pressure to resign, or an employer concerned about a potential claim of unfair termination or constructive dismissal, we strongly recommend that you book a confidential consultation without delay. Our dedicated employment lawyers in Nairobi offer urgent same-day advice for time-sensitive workplace matters, ensuring you receive clear, practical guidance when it matters most.

Your career, your reputation, and your legal rights are far too important to leave to chance. Call us today or complete the short form below to schedule your consultation. We are ready to stand with you.