https://new.kenyalaw.org/akn/ke/judgment/keelrc/2026/2018

Karuga v Zohari Credit Ltd (Formerly Zohari Leasing Ltd) & another (Employment and Labour Relations Cause E681 of 2023) [2026] KEELRC 2018 (KLR) (15 July 2026) (Judgment) Neutral citation: [2026] KEELRC 2018 (KLR) Republic of Kenya In the Employment and Labour Relations Court at Nairobi Employment and Labour Relations Cause E681 of 2023 BOM Manani, J July 15, 2026 Between Irene Wanjiru Karuga Claimant and Zohari Credit Ltd (Formerly Zohari Leasing Ltd) 1st Respondent Centum Investment Company Ltd 2nd Respondent Judgment Claimant’s Case 1.The Claimant states that the 1st Respondent hired her services as Chief Executive Officer (CEO) through a contract dated 21st May 2018. It is her case that she commenced work from 1st July 2018. 2.The Claimant avers that she worked well as evidenced by the positive performance reviews she got. Consequently, she avers that the 1st Respondent confirmed her contract on 1st January 2019. 3.The Claimant avers that the 1st Respondent hired her because of her expertise in the leasing business. It is her case that the 1st Respondent’s leasing business was not doing well and hence the decision to bring her on board to reverse the trend. 4.The Claimant avers that she began experiencing challenges at the workplace from July 2020. She contends that around 6th January 2020, the 2nd Respondent’s Chief Operating Officer (COO) instructed her to start transferring Ksh. 2,300,000.00 per month from the 1st Respondent to the 2nd Respondent to serve as the 1st Respondent’s cash contribution to its (the 1st Respondent’s) shareholder, the 2nd Respondent. 5.It is the Claimant’s case that she found the request unusual and asked the COO to put it in writing. She further contends that the payout required the approval of the 1st Respondent’s Board of Directors. As such, she avers that she resisted the request after providing a detailed analysis of the 1st Respondent’s financial situation. 6.The Claimant avers that following her refusal to sanction the cash payout, the CEO of the 2nd Respondent resigned from the Board of the 1st Respondent contending that the 1st Respondent’s business model was not aligned with the 2nd Respondent’s objective of enhancing cash flow and ensuring tangible returns to shareholders. Further, she avers that she was informed that the 2nd Respondent would no longer give her support on matters pertaining to the 1st Respondent. 7.The Claimant avers that in August 2020, her supervisor instructed her to prepare documents to borrow Ksh. 400,000,000.00. She avers that although the facility was to be secured using the 1st Respondent’s credit line, it was to be utilized for the benefit of the 2nd Respondent. 8.The Claimant avers that she equally found this request unusual. It is her case that the 1st Respondent’s credit line was meant for purchasing leasing equipment to support its business. As such, she avers that the request was the exact opposite of the 1st Respondent’s core business. 9.The Claimant further contends that the request did not have the approval of the 1st Respondent’s Board of Directors. Consequently, she avers that she resisted it. 10.The Claimant avers that the 2nd Respondent’s management was not pleased with her decision. She avers that the management reacted abrasively to the decision forcing her to schedule a meeting with the bank to discuss the impugned facility. 11.The Claimant avers that the bank raised concerns about the facility and demanded to be told the marketable securities which the 2nd Respondent intended to invest in so that it (the bank) could assess whether the securities provided sufficient collateral for the loan. However, she avers that the 2nd Respondent did not provide the information required resulting in the failure of the proposed transaction. 12.The Claimant states that about two months after the collapse of the aforesaid transaction, the bank called her to inform her that the 1st Respondent’s credit line had been reduced from Ksh. 600,000,000.00 to Ksh. 250,000,000.00 at the behest of a third party. She avers that this was intended to frustrate her ability to deliver on her mandate on behalf of the 1st Respondent. 13.The Claimant contends that in February 2021, the 2nd Respondent asked her to share the 1st Respondent’s budget with it (the 2nd Respondent). She avers that the aforesaid budget was intended to assist the 1st Respondent to achieve its profit margins within a space of twelve (12) months. She avers that she submitted the budget as directed but she did not get any response on the matter. 14.The Claimant avers that she was subsequently asked to support an initiative to purportedly harmonize the 1st Respondent’s operations with those of Sidian Bank, a subsidiary of the 2nd Respondent. However, she contends that it later turned out that the exercise was intended to enable Sidian Bank to absorb the 1st Respondent altogether. 15.The Claimant states that the aforesaid exercise was going to radically change the 1st Respondent’s business model. She further contends that the exercise was going to result in job losses. 16.The Claimant avers that in May 2021, she received a request to release Ksh. 1,100,000.00 to Sidian Bank to cover legal fees for an opinion on restructuring of the 1st Respondent’s leasing business. She contends that because the restructuring was going to alter the 1st Respondent’s business model, she referred the matter to the 1st Respondent’s Board for approval. However, she avers that the matter was not pursued thereafter. 17.The Claimant avers that the above events left no doubt in her mind that there were concerted efforts to alter the 1st Respondent’s business model. She contends that such changes were inevitably going to impact and alter her terms and conditions of employment. Consequently, she avers that she requested for a meeting with the 2nd Respondent’s CEO to discuss the matter. However, she avers that the meeting was cancelled at the last minute and efforts to reconvene it bore no fruit. 18.The Claimant avers that at the end of May 2021, the Managing Director of the private equity firm of the 2nd Respondent informed her that they were going to launch a payroll lending product through the 1st Respondent. She contends that the proposed business was completely out of line with the 1st Respondent’s core business. 19.The Claimant avers that the 1st Respondent’s Board of Directors convened on 27th May 2021 to discuss the new business venture. She avers that she pointed out to the Board the lack of clarity regarding how the new business was to be assimilated into the 1st Respondent’s existing business. 20.The Claimant avers that despite her concerns, the 1st Respondent proceeded to launch the payroll lending business immediately. Further, she contends that the 1st Respondent also effected a name change from Zohari Leasing Limited to Zohari Credit Limited. 21.The Claimant avers that she was subsequently directed to communicate the changes in the 1st Respondent to the regulators in order to actualize the lending business. However, she contends that she declined to do so since she had not been authorized to issue the communication by the 1st Respondent’s Board of Directors. 22.The Claimant avers that she continued to discharge her duties as per the terms of her contract with the 1st Respondent. However, she avers that this became increasingly difficult due to the decision to onboard the payroll lending business and to change the 1st Respondent’s name. 23.The Claimant avers that she wrote to the 1st Respondent’s management on 22nd June 2021 to express her reservations about the initiatives which the 1st Respondent was undertaking and to request for a discussion regarding the 1st Respondent’s business pathway in respect of its leasing business. She avers that in reaction, the 1st Respondent shared with her a transitional business plan. However, she asserts that it (the 1st Respondent) was not able to set goals for employees over this period as its performance indices kept shifting because of the frequent changes in its business trajectory. 24.The Claimant avers that during the period when the 1st Respondent was implementing changes in its business trajectory, it did not approve any new leasing business. Further, she contends that the 2nd Respondent informed Sidian Bank (the 1st Respondent’s principal financier) that it (the 2nd Respondent) was in the process of withdrawing the securities it had used to secure the 1st Respondent’s credit line. 25.The Claimant avers that the change in the 1st Respondent’s business from leasing to credit affected her terms and conditions of service. As such, she contends that she wrote to the 1st Respondent on 30th August 2021 requesting for an updated Job Description. However, she asserts that her request was not actioned. 26.The Claimant avers that she was in the meantime ignored by officers of the 2nd Respondent. She avers that she raised concern regarding the treatment she had been subjected tothrough her email of 5th August 2021. However, she asserts that the email did not elicit any response. 27.The Claimant avers that because of the non-responsiveness of the Respondents to her concerns, she was forced to invoke the 1st Respondent’s Human Resource Manual to formally lodge her grievances. She contends that in response, the 2nd Respondent’s COO promised to meet her for a discussion. However, she avers that her subsequent efforts to convene a meeting with the COO did not yield fruit. 28.The Claimant avers that in a Board meeting that was held on 22nd June 2022, the 1st Respondent accused her of undertaking some activities on its behalf without approval of the Board of Directors thus exposing it (the 1st Respondent) to various risks. She contends that the 1st Respondent also questioned her expertise in pricing some transactions. She contends that the tone of the discussion was accusatory and confrontational. 29.The Claimant asserts that the accusations by the 1st Respondent were not true. She alleges that she wrote to the 1st Respondent’s Board of Directors immediately after the meeting to provide proof of the Board approvals she had received for the activities in question. 30.The Claimant contends that the Respondents’ conduct created a hostile work environment for her. She relies on the various matters alluded to in the preceding sections of this judgment to back her claim. She contends that the Respondents’ actions were intended to frustrate her work in order to justify termination of her contract. 31.The Claimant avers that she suffered mental and emotional stress because of the treatment the Respondents subjected her to. As a result, she asserts that she was forced to resign from employment through her letter dated 4th July 2022. 32.The Claimant thus prays for various reliefs to wit: a declaration that her right to fair labour practices was violated; a declaration that her contract of service was terminated through constructive dismissal from employment; general damages for breach of her right to fair labour practices; compensation for unfair termination of her contract of service; exemplary damages; interest; and costs of the suit. 33.During trial, the Claimant acknowledged that her contract entitled the 1st Respondent, through her immediate supervisor, to assign her additional or other duties as long as this was within her docket and was necessary to meet the 1st Respondent’s business needs. She further acknowledged that her Job Description identified several entities and personalities that were to either be her direct reports, customers or key relations. These included: Business Support Manager, Asset Manager and Business Development Executive; Board of Directors of 1st Respondent; Executive Teams in Centum Investments Plc; Business Unit Leadership in Centum Investment Plc; the Chief Executive Officer, Centum Investments Plc; and Subsidiaries. 34.The Claimant further acknowledged that a company is free to determine the trajectory of its business. She conceded that shareholders of a company have the freedom to decide whether the company should venture into a new business line and that once they (the shareholders) reach such decision, it is the company’s Board of Directors to implement the decision through the management team. 35.The Claimant further admitted that she was aware that the 1st Respondent’s shareholder opted to venture into the payroll lending business and that she had no objection to the decision. She contended that her only concern was with the way the decision was implemented without meaningfully bringing her on board. 36.The Claimant further averred that financing of the new business venture was a matter of concern to her. She stated that although she raised the concern, it was not adequately addressed. She said that this was going to impact her performance. 37.The Claimant averred that part of her Job Description was to fund raise for the 1st Respondent. As such, she contended that fundraising for the new business fell under her docket. Yet, she avers that she was not meaningfully involved in onboarding the business venture. 38.The Claimant further acknowledged that the credit facility which was extended to the 1st Respondent was secured using the 2nd Respondent’s immovable property. She conceded that the 2nd Respondent had the liberty to utilize the property as it wished. 39.Regarding the financial facility of Ksh. 400,000,000.00 which was to be secured using the 1st Respondent’s credit line, the Claimant conceded that she did not have proof that the facility was to be applied for the benefit of third parties who were linked to the 2nd Respondent. She averred that discussions which pointed to this were not reduced into writing. 40.The Claimant stated that she was forced to resign from her position because of a toxic work environment. She stated that there was too much interference in her docket from the headquarters. She denied that the decision to resign was prompted by her intolerance to being supervised. 41.The Respondents have opposed the claim. They confirm that the Claimant was hired as the 1st Respondent’s CEO with effect from 1st July 2018. They further confirm that she resigned from employment on 4th July 2022. 42.The Respondents aver that the Claimant’s contract entitled the 1st Respondent to assign her additional or other duties as were necessary to meet its business needs. Further, they contend that the Claimant agreed to be bound by their policies, codes, human resource instruments and instructions whilst in service. 43.The Respondents deny that the Claimant’s performance was remarkable. They allege that between 2018 and 2019, she only managed a growth rate of 3% which was significantly below the target which had been set for her. They contend that her performance did not show significant growth save for the period between 1st October 2020 and 31st December 2020. 44.The Respondents contend that the Claimant’s contract was confirmed as a matter of routine despite her marginal performance. They further allege that they offered her support in the hope that she was going to steer the 1st Respondent’s business out of the financial mess it was in. They contend that despite this, the business continued to register marginal gains, an eventuality they attribute to the Claimant’s alleged failure to put in place proper structures to ensure a turnaround in the business. 45.The Respondents allege that during the Claimant’s tenure as the 1st Respondent’s CEO, only a few leases matured. Further, they contend that she presided over disposal of assets of the 1st Respondent at below market rate even when it was clear to her that it was part of her responsibility to ensure that the 1st Respondent optimized on profitability. 46.The Respondents aver that owing to the poor performance of the 1st Respondent, the Claimant was asked to present a financial report on the company for the period ending March 2021. They assert that an analysis of the report revealed that the 1st Respondent’s return on equity was below 5%. 47.The Respondents aver that the Claimant was asked to account for this state of affairs and that she admitted that indeed the 1st Respondent’s performance was less than satisfactory. They further assert that she promised to ensure that there was a turnaround in the year 2022. 48.The Respondents assert that it was realized that the 1st Respondent’s business model was not aligned with the group’s objective of enhancing cash flow and returns to shareholders. As such, they assert that a proposal was made to harmonize the business model with that of Sidian Bank with respect to, inter alia, leasing business. 49.The Respondents contend that Sidian Bank sought a legal and tax opinion on the matter and was required to pay legal fees of Ksh. 1,100,000.00. They contend that since the 1st Respondent was going to be the beneficiary of the process, the Claimant was asked to facilitate payment of the fees. 50.The Respondents further contend that in a further attempt to revamp the 1st Respondent’s business, the 2nd Respondent proposed the introduction of the payroll lending product. They contend that a draft proposal for the new business was accordingly prepared and shared with the Claimant for her review and input. 51.The Respondents contend that the 1st Respondent’s Board of Directors has the authority to sanction new business in order to ensure its (the 1st Respondent’s) profitability. They further aver that the 1st Respondent’s Articles of Association do not limit its objects. As such, they aver that it was within the 1st Respondent’s powers to venture into the payroll lending business in addition to the leasing business. 52.The Respondents concede that the Claimant requisitioned for a meeting to discuss the 1st Respondent’s business pathway. However, they state that the meeting did not fruition because one of the proposed attendees was on leave and also because the Claimant was allowed more time to prepare a consolidated strategy paper to include the payroll lending business. Nevertheless, they contend that notwithstanding that the meeting did not take place, the Claimant was engaged severally on the issue and expressed her agreement to support the new business line albeit reluctantly. 53.The Respondents aver that the 1st Respondent’s Board of Directors subsequently convened a meeting on 27th May 2021 during which the new business venture was considered. They contend that the minutes of the meeting were circulated and signed after corrections. 54.The Respondents contend that after the Board of Directors gave its nod to the new business, it was agreed to change the 1st Respondent’s name from Zohari Leasing Limited to Zohari Credit Limited. They aver that this was done in order to better define and position the 1st Respondent. 55.The Respondents assert that the Claimant was actively involved in the launch of the 1st Respondent’s new payroll lending business product. They aver that she was in fact made a signatory to the 1st Respondent’s account which was to be used for the new business and was also incorporated in the credit appraisal team for the business. 56.The Respondents contend that the Claimant however embarked on a process of frustrating the new business. They accuse her of refusing to sign critical documents to seek and obtain the approval of regulatory bodies for the business despite knowing that she was authorized by the 1st Respondent to seek such approval. 57.The Respondents contend that despite the Claimant’s reluctance towards the payroll lending business, she continued to run the leasing business on behalf of the 1st Respondent. Further, they aver that when she made an inquiry on 22nd June 2021 regarding the various business initiatives the 1st Respondent had been making, the 1st Respondent prepared and shared with her a carefully curated business plan. As such, they deny that the payroll lending business impeded her ability to continue running the leasing business. 58.The Respondents assert that the 1st Respondent’s shareholder requested it to cease utilizing the existing credit line it had at Sidian Bank. They further assert that the shareholder also proposed that the 1st Respondent’s new opportunities be underwritten under a new asset leasing structure that would change its (the 1st Respondent’s) business model. 59.The Respondents aver that because of this, it became necessary to revise the 1st Respondent’s structure. As such, they aver that the Claimant was tasked to submit to the 1st Respondent’s Board of Directors various instruments to wit: a revised business plan; a revised budget; and a revised risk management framework for approval. They contend that it is in this context that the Claimant issued the internal memo dated 21st July 2021 to the 1st Respondent’s Board. 60.The Respondents acknowledge that the Claimant raised concerns about the workplace. However, they contend that the Director of Portfolio Operations for the 2nd Respondent wrote to her on 6th September 2021 addressing all the concerns. 61.The Respondents acknowledge that the 1st Respondent’s Board of Directors held a meeting on 22nd June 2022 which was attended by the Claimant. However, they deny that any accusations were leveled against her during the meeting as she alleges. 62.The Respondents assert that contrary to the Claimant’s assertions, she is the one who resisted to implement the changes which were recommended by the 1st Respondent’s Board of Directors. As such, they accuse her of frustrating the Board’s efforts to turnaround the 1st Respondent’s fortunes. 63.The Respondents allege that weeks before the Claimant resigned, the 2nd Respondent’s Director of Portfolio Operations urged her to remain on board and assured her of support. Despite this, they contend that she went ahead to tender her resignation where after she sought to plead constructive dismissal from employment. 64.The Respondents contend that the Claimant cannot plead constructive dismissal from employment because the addition of any roles to her docket arising from the new business line was covered by the terms of her contract of service. As such, they aver that she cannot allege that there was breach of the contract. 65.The Respondents further contend that the 1st Respondent’s decision to expand its business was made for legitimate business reasons. They aver that this was a managerial decision for the 1st Respondent which had nothing to do with the Claimant’s contract of service and was not ultra vires the 1st Respondent’s Articles of Association. As such, they contend that the Claimant cannot invoke this as a ground to justify her claim for constructive dismissal from employment. 66.The Respondents contend that the Claimant’s decision to resign from employment was voluntary. They aver that her resignation had nothing to do with their actions. 67.The Respondents contend that the Claimant was involved in the process of onboarding the new business albeit reluctantly. As such, they contend that she is estopped from alleging that implementing the new business model breached her contract of service resulting in her constructive dismissal from employment. 68.During trial of the case, the Respondents’ witness confirmed that one of the Claimant’s key roles was to fund raise for the 1st Respondent. He stated that this was critical in running the 1st Respondent’s asset leasing business since the business requires substantial funds to run. 69.The witness confirmed that the Clamant secured a credit line of Ksh. 600,000,000.00 for the 1st Respondent from Sidian Bank. He also confirmed that the facility was substantially stepped down at some point in time. 70.However, he contended that reduction in the credit line did not negatively impact the 1st Respondent’s business. Further, he denied that the reduction impeded the Claimant’s ability to deliver on her docket. Despite this, he acknowledged the presence of a risk assessment report which was prepared by an independent agency and which opined that the reduction in the credit line was likely to negatively impact the 1st Respondent’s business. 71.The witness acknowledged that the Claimant was requested to remit Ksh. 2,300,000.00 to the 2nd Respondent. However, he denied that this was intended to be a monthly payout. It was his case that the payout was supposed to have been a one off remittance. 72.The witness averred that discussions on remittance of the aforesaid amount had been ongoing before the Claimant was asked to release the amount. However, he conceded that there was no evidence that the 1st Respondent’s Board of Directors had sanctioned the payout. He further conceded that he had no authority to issue verbal instructions to the Claimant to make the impugned payment. 73.The witness acknowledged that there were email correspondences which pointed to the fact that a company by the name Nabo had sought to secure a facility through the 1st Respondent. He confirmed that the said company was a subsidiary of the 2nd Respondent. However, he asserted that he could not confirm the kind of facility the company wanted to secure from the bank. 74.The witness denied that the 1st Respondent’s credit line of Ksh.600,000,000.00 with Sidian Bank was reduced after the Claimant declined to assist Nabo to secure a facility with the same bank. He averred that the Claimant did not tender evidence to support this contention. 75.The witness disputed the Claimant’s contention that she was forced to resign out of frustration after the credit line by Sidian Bank to the 1st Respondent was substantially stepped down. However, he conceded that she had written to him citing the difficulties she was experiencing in discharging her mandate as one of the reasons why she felt frustrated at the workplace. 76.The witness also acknowledged that the Claimant had raised concern regarding delayed or non-approval of new business proposals by her. He admitted that there were a number of business proposals, including one relating to Ravina, whose approval had been delayed. 77.The witness acknowledged that the 1st Respondent introduced the payroll lending business after it had engaged the Claimant as its CEO for the leasing business. He admitted that payroll lending was not part of the Claimant’s tasks at the time she was hired and that she was not trained in the new business. However, he asserted that most of the 1st Respondent’s employees, including the Claimant, had background knowledge in the banking business. 78.The witness also confirmed that the 1st Respondent changed its name after it took up the payroll lending business. However, he stated that he could not tell whether its (the 1st Respondent’s) Articles of Association were amended to reflect the change of name. 79.The witness stated that because of the Claimant’s resistance to the payroll lending business, it (the business) was moved elsewhere. As such, he averred that there was no need to amend her Job Description to include additional roles. Issues for Determination 80.After evaluating the pleadings, evidence and submissions on record against the applicable law, the following issues arise for determination:-a.Whether the Claimant’s contract of service was terminated through constructive dismissal from employment.b.Whether the Claimant is entitled to the reliefs which she seeks through this action. Analysis 81.The dominant issue in dispute between the parties is whether the Respondents’ actions led to the constructive dismissal of the Claimant from employment. The starting point in determining this issue is to restate the law on constructive dismissal. 82.Black’s Law Dictionary defines the term ‘’constructive discharge or dismissal’’ as follows:-‘’An employer’s creation of working conditions that leave a particular employee or group of employees little or no choice but to resign, as by fundamentally changing the working conditions or terms of employment; an employer’s course of action that, being detrimental to an employee, leaves the employee almost no option but to quit.’’ 83.This definition is quite wide. It admits of any conduct on the part of an employer which renders the working environment sufficiently hostile to justify a decision by an employee to resign. Recognizing the fluidity and subjectivity of the definition, case law has endeavored to place boundaries on it with a view to delimiting the conduct by an employer that will be deemed to justify a claim for constructive dismissal by an employee. 84.In the case of Western Excavating (ECC) Ltd. -v- Sharp [1978] ICR 222 or [1978] QB 761, the court affixed boundaries to the meaning of the term by stating as follows:-“If the employer is guilty of conduct which is a significant breach going to the root of the contract of employment or which shows that the employer no longer intends to be bound by one or more of the essential terms of the contract, then the employee is entitled to treat himself as discharged from any further performance. If he does so, then he terminates the contract by reason of the employer’s conduct.He is constructively dismissed. The employee is entitled in those circumstances to leave at the instant without giving any notice at all or alternatively, he may give notice and say that he is leaving at the end of the notice. But the conduct must in either case be sufficiently serious to entitle him to leave at once (emphasis ours). (See also Nottingham County Council -v- Meikle (2005) ICR 1).” 85.From the foregoing, it is apparent that the court sought to limit the employer’s conduct which may justify a plea for constructive dismissal to one which goes to the root of the contract of employment. Further, it (the court) underscored the reality that the conduct must have resulted in a significant breach of the contract of employment and must have exposed the employer’s unwillingness to be bound by the terms of the contract between the parties. 86.In the local setting, the most profound attempt to place boundaries on the latitude of the phrase was by the Court of Appeal in the case of Coca Cola East & Central Africa Limited v Maria Kagai Ligaga [2015] KECA 394 (KLR). In the case, the court identified two interpretations which can be ascribed to the term. The court further indicated that the two interpretations yield two tests: the unreasonable test; and the contractual test. 87.The court expressed itself on the matter as follows:-‘’What is the key element and test to determine if constructive dismissal has taken place? The factual circumstances giving rise to constructive dismissal are varied. The key element in the definition of constructive dismissal is that the employee must have been entitled or have the right to leave without notice because of the employer’s conduct. Entitled to leave has two interpretations which gives rise to the test to be applied. The first interpretation is that the employee could leave when the employer’s behavior towards him was so unreasonable that he could not be expected to stay - this is the unreasonable test. The second interpretation is that the employer’s conduct is so grave that it constituted a repudiatory breach of the contract of employment - this is the contractual test. The contractual test is narrower than the reasonable test.’’ 88.The court then held that the contractual test was the most appropriate to be deployed in determining whether a case for constructive dismissal has arisen. It (the court) stated as follows:-‘’The dicta in Western Excavating (ECC) Ltd. -v- Sharp [1978] ICR 222 adopts the contractual approach test and we are persuaded that the test is narrow, precise and appropriate to prevent manipulation or overstretching the concept of constructive dismissal. For this reason, we affirm and adopt the contractual test approach. This means that whenever an employee alleges constructive dismissal, a court must evaluate if the conduct of the employer was such as to constitute a repudiatory breach of the contract of employment. Whether a particular breach of contract is repudiatory is one of mixed fact and law……The criterion to determine if constructive dismissal has taken place is repudiatory breach of contract through conduct of the employer. The burden of proof lies with the employee. The employer’s conduct must be such as when viewed objectively, it amounts to a repudiatory and fundamental breach of the contractual obligations.’’ 89.The court went further to distill the principles which should guide in determining cases for constructive dismissal as follows:-‘’The legal principles relevant to determining constructive dismissal include the following:-a.What are the fundamental or essential terms of the contract of employment?b.Is there a repudiatory breach of the fundamental terms of the contract through conduct of the employer?c.The conduct of the employer must be a fundamental or significant breach going to the root of the contract of employment or which shows that the employer no longer intends to be bound by one or more of the essential terms of the contract.d.An objective test is to be applied in evaluating the employer’s conduct.e.There must be a causal link between the employer’s conduct and the reason for employee terminating the contract i.e. causation must be proved.f.An employee may leave with or without notice so long as the employer’s conduct is the effective reason for termination.g.The employee must not have accepted, waived, acquiesced or conducted himself to be estopped from asserting the repudiatory breach; the employee must within a reasonable time terminate the employment relationship pursuant to the breach.h.The burden to prove repudiatory breach or constructive dismissal is on the employee.i.Facts giving rise to repudiatory breach or constructive dismissal are varied.’’ 90.As such and from the foregoing, it is evident that not every conduct of the employer which an employee is displeased with can justify a decision to resign and plead constructive dismissal from employment. The impugned conduct must be sufficiently grave and must have resulted in a repudiatory breach of the contract of service between the parties. 91.Underscoring the same truism, the learned Judge in the case of Anthony Mkala Chitavi v Malindi Water & Sewerage Company Ltd [2013] KEELRC 920 (KLR) stated as follows:-‘’Constructive dismissal has its roots in the law of contract under the doctrine of ‘discharge by breach’. Under this doctrine, an employee was entitled to treat himself as discharged from further performance of his obligations where the employers conduct was a significant breach going to the root of the contract. The termination would be due to the employers conduct. Such conduct may include unilateral reduction in pay or failure to pay the employee.’’ 92.In Kenneth Kimani Mburu & another v Kibe Muigai Holdings Limited [2014] KEELRC 723 (KLR), the court reiterated the same preconditions for constructive dismissal in the following terms:-‘’The basic ingredients in constructive dismissal are:-a.The employer must be in breach of the contract of employment;b.The breach must be fundamental as to be considered a repudiatory breach;c.The employee must resign in response to that breach; andd.The employee must not delay in resigning after the breach has taken place, otherwise the Court may find the breach waived.’’ 93.In the instant case, the Claimant made several accusations against the Respondents to justify her claim for constructive dismissal from employment. The question which the court has to determine is whether the Respondents’ impugned conduct resulted in a repudiatory breach of the Claimant’s contract to justify her decision to resign and plead constructive dismissal from employment. 94.The first complaint which the Claimant raised related to the 2nd Respondent’s Portfolio Operations Officer’s request to her in July 2020 to make a cash payout of Ksh. 2,300,000.00 to the 2nd Respondent as dividends. The Claimant contended that she found the request unusual since it had not been approved by the 1st Respondent’s Board of Directors and had not been budgeted for. As such, she averred that she declined the request. 95.Did this request occasion a repudiatory breach of the Claimant’s contract? I think not. 96.The fact that one of the Respondents’ officers asked the Claimant to execute what she believed to be an irregular act did not mean that she was bound to execute the act in contravention of the terms of her engagement. Indeed, the evidence on record shows that she declined the request. 97.Clause 3.2 of the Claimant’s contract of employment obligated her to obey instructions issued by her superiors. However, the clause also made it clear that this obligation only extended to instructions that did not contradict the terms of her contract. Therefore, she was under no obligation and indeed ought not to have been under any pressure to yield to the demand to remit the aforesaid amount to the 2nd Respondent if she believed that it was irregular. 98.There is no evidence that the Respondents compelled the Claimant to yield to the demand with the result that she was forced to breach the terms of her own contract. There is no evidence that they (the Respondents) disregarded her right to resist an irregular command thereby impliedly breaching her contract of service in this respect. 99.The second complaint by the Claimant was that the Respondents demanded that she sanctions a borrowing of Ksh. 400,000,000.00 for the benefit of the 2nd Respondent’s subsidiary. She contended that when she resisted the request, the Respondents retaliated by downscaling the 1st Respondent’s credit line with Sidian Bank in a bid to frustrate the discharge of her mandate. 100.The averments by the by the Claimant in this respect may be true. However, it is difficult to see the linkage between the Respondents’ demand for processing of the impugned facility and breach of her contract of employment to warrant her decision to resign from service and plead constructive dismissal from employment. In the court’s view, this linkage is missing. 101.The Claimant’s other complaint related to the Respondents’ decision to introduce the payroll lending business as part of the 1st Respondent’s business ventures. During cross examination, she conceded that the 1st Respondent’s shareholder company was entitled to introduce the business. She further stated that the business was indeed introduced at the behest of the shareholder and the duty of 1st Respondent’s Board of Directors and management was to implement the decision. 102.In the face of this concession, it is difficult for the Claimant to sustain the argument that introduction of the new business breached her contract of service. In any event, clause 3.1 of the contract granted the 1st Respondent the right to require her to undertake other and further duties. As such, the fact that she was burdened by additional duties as a result of introduction of the payroll lending business cannot be said to have breached the terms of her contract to warrant her decision to resign and plead constructive dismissal from employment. 103.The Claimant also raised concern regarding the Respondents’ request to her to facilitate payment of legal fees of Ksh. 1,100,000.00 to the lawyers who were contracted by Sidian Bank Ltd to provide a legal opinion on restructuring of the leasing business. Her position was that since the 1st Respondent had not budgeted for the amount, it (the money) could not be paid without approval of the Board. 104.The Claimant’s position on the matter may have been factually correct. She was entitled to resist the request on the grounds she cited. However, this did not catapult the request into conduct which resulted in the repudiatory breach of the terms of her contract. 105.Having regard to the totality of the evidence on record, the court comes to the conclusion that the disputants were not in agreement regarding how to manage the 1st Respondent’s business ventures. However, this variance in opinion did not lead to a repudiatory breach of the Claimant’s contract of service. 106.The disagreement between the parties on the various matter in controversy did not yield a scenario which could justify the Claimant’s resignation in order to plead constructive termination of her contract. The fact that the Respondents took a divergent standpoint on the matters did not result in conduct which breached the Claimant’s contract. 107.The Claimant was entitled to feel that the Respondents’ actions (including their failure to approve certain business proposals in time or at all) impeded her efforts to deliver on her mandate. However, this cannot be said to have had the consequence of fundamentally breaching the terms of her contract of service to warrant a plea of constructive dismissal. As such, although there is evidence that the Claimant resigned from service because of the myriad disagreements with the Respondents, the court finds that the reasons for the disagreements did not constitute a repudiatory breach of the Claimant’s contract of service. 108.The Claimant has prayed for a declaration that her right to fair labour practices was breached and for compensation for violation of the right. However, the court finds that the differences in opinion and approaches between the parties regarding the management of the 1st Respondent’s affairs cannot be said to have resulted in the violation of the Claimant’s right to fair labour practices. 109.That being the case, the court finds that the claim for breach of the right to fair labour practices has not been proved. As such, it fails. Determination 110.The upshot is that the court finds that:-a.The Claimant’s claims for violation of her right to fair labour practices and constructive dismissal from employment are not merited.b.As such, they fail.c.Each party to bear own costs of the suit. DATED, SIGNED AND DELIVERED ON THE 15TH DAY OF JULY, 2026B. O. M. MANANIJUDGEIn the presence of:…………….for the Claimant…………….for the RespondentOrderIn light of the directions issued on 12th July 2022 by her Ladyship, the Chief Justice with respect to online court proceedings, this decision has been delivered to the parties online with their consent, the parties having waived compliance with Rule 28 (3) of the ELRC Procedure Rules which requires that all judgments and rulings shall be dated, signed and delivered in the open court.