Court Rules on Supervisor’s Responsibility After KSh48 Million Bank Error

A bank team leader has been held responsible for a KSh48.18 million transaction error after the Employment and Labour Relations Court found that she should have carried out additional verification before approving the payment.

The dispute arose from a 2015 transaction in which the money was transferred after the employee reportedly misinterpreted transaction details and validated the payment without completing the required checks.

The employee was subsequently dismissed and challenged the decision in court, arguing that several officers had participated in processing the transaction.

She also argued that another employee had accepted responsibility for the error and that she had acted quickly after discovering what had happened.

Court places responsibility on team leader

The court rejected the argument that responsibility could be shifted to other members of the team.

The judge found that the employee’s position as team leader gave her a greater responsibility to ensure that the transaction was properly checked before it was approved.

The court held that she could not blame back-office colleagues for failing to detect the error because the final validation responsibility rested with her in her supervisory role.

Her failure to complete the required verification was therefore found to amount to negligence in the performance of her duties.

Dismissal found to be lawful

The court further found that the bank had a valid reason for terminating the employee’s employment.

The disciplinary process followed by the employer was also found to have complied with the required procedure before the dismissal was effected.

As a result, the employee’s claims for compensation, notice pay and severance were rejected.

The court found that severance pay was not applicable in the circumstances of the case.

Employee ordered to settle outstanding loan

The financial consequences extended beyond the disputed transaction.

The court ruled that the former employee was no longer entitled to preferential staff loan terms after her employment ended.

The employer’s counterclaim for KSh9.78 million was also allowed, representing the outstanding loan balance as of September 2022.

The ruling demonstrates the potential consequences of supervisory responsibilities where an employee has been specifically tasked with checking and approving transactions.

In this case, the court’s finding was based on the particular duties assigned to the team leader and the circumstances surrounding the failed verification of the transaction.