Court rules that Employees in supervisory positions have a heightened responsibility to ensure that work carried out by their teams is accurate, with failure to exercise that oversight potentially leading to dismissal. The Employment and Labor Relations court made the finding while dismissing a former bank team leader’s challenge against her termination following an erroneous transfer of Sh48.18 million.
The employee had been dismissed after approving a high-value transaction that was later found to have been processed incorrectly.
She argued that she should not have been held solely responsible because several officers had participated in processing the transaction. She also told the court that another employee had admitted responsibility for the error and that she had acted promptly once the mistake was discovered by reporting the incident and taking steps to recover the money. The court, however, found that her position as team leader placed a greater responsibility on her to ensure that the transaction was properly scrutinised before it was authorised.
The dispute stemmed from a 2015 transaction in which Sh48.18 million was erroneously transferred after the team leader misinterpreted the transaction details and validated the payment without completing the required verification procedures. In its judgment, the court found that the employee had been negligent in carrying out her supervisory duties. “The claimant was therefore found negligent in her duties as team leader, whose role was to validate each transaction to avoid losses to the respondent bank,” the judgment stated.
The court rejected the employee’s attempt to shift responsibility to other members of staff involved in the transaction, holding that her supervisory role required her to exercise the necessary level of care before approving the payment.
The judge also found that the bank had a valid reason to terminate her employment and that it had followed the required disciplinary procedure before arriving at the decision to dismiss her. The court found that the termination was lawful and that she was not entitled to severance pay in the circumstances.
The dispute also extended to a staff loan that the employee had obtained during her employment. The court ruled that she was no longer entitled to preferential staff loan terms after her employment came to an end. It subsequently allowed the bank’s counterclaim for Sh9.78 million, representing the outstanding loan balance as of September 2022.
The decision carries significant implications for employees in managerial and supervisory positions, particularly in industries where staff are entrusted with handling large sums of money. It underscores that supervisors may be held accountable where their duties require them to review, verify or approve work performed by junior employees.
The ruling also serves as a reminder that delegation of duties does not necessarily absolve a supervisor of responsibility. Where an employee has the final responsibility to validate a transaction, failure to carry out the required checks may expose them to disciplinary action if the lapse results in financial loss.
For employers, the decision reinforces the importance of clearly defined supervisory roles and internal controls, while for senior employees it highlights the need to strictly follow verification procedures when approving transactions or other sensitive operations.
In the banking sector, where a single approval can trigger the movement of millions of shillings, the judgment sends a clear message: supervisory responsibility carries consequences when required checks are not performed.
