The Employment and Labour Relations Court has upheld Bank of Africa’s decision to fire a senior banking officer over an erroneous Sh48 million foreign-exchange transfer to Dubai Bank Kenya Limited 10 years ago.
The court dismissed Mary Wachira’s claim of unfair termination, finding that she negligently approved the payment to Dubai Bank Kenya Limited without independently confirming receipt of the corresponding funds.
Stating that an acquittal in a criminal case does not invalidate an employee’s dismissal for misconduct, the court also upheld the bank’s decision to withdraw Ms Wachira’s preferential staff-loan interest rates after termination, ordering her to repay Sh9.78 million in outstanding loans.
“Acquittal of criminal charges is fundamentally different from employment misconduct. In this case, with employment lawfully terminated, the benefit accrued from employment ceased,” the court said.
The labour dispute arose from a foreign-exchange transaction on July 2, 2015, involving six million South African rand (6 million ZAR), although the original instructions referred to USD $6 million. The court heard that the error led to the release of Sh48.1 million before the bank received the corresponding funds.
The bank said it received a SWIFT message from Citibank New York requesting the purchase of $6 million, with Citibank South Africa indicated as the ordering institution. Ms Wachira and her team erroneously interpreted the transaction as a request by Dubai Bank Limited to purchase ZAR 6 million, failed to verify the transaction details, and forwarded it for approval.
Ms Wachira joined Bank of Africa in May 2007 as an operations assistant and climbed the ranks to become a senior banking officer, a Treasury back office official, and subsequently a team leader in the Treasury back office. Her duties included overseeing foreign-exchange transactions and verifying their details before approval.
The bank accused her of releasing the Sh48 million without confirming receipt of the corresponding funds. Dubai Bank later entered receivership, and the money remained unrecovered, according to the judgment.
Challenging the dismissal, Ms Wachira maintained that she discharged her duties diligently and that no previous allegations of negligence had been raised against her. The court heard that on July 2, 2015, she oversaw 345 transactions valued at almost Sh1 billion, of which only one was erroneous. She said the error arose from a misinterpretation of the transaction details.
Ms Wachira argued that she relied on information from colleagues and acted promptly after discovering the discrepancy during reconciliation. She said she notified the dealing team, contacted Dubai Bank, initiated a SWIFT recall, and reported the incident to her superiors.
She also challenged the bank’s reliance on an interbank procedure reviewed on July 16, 2015, after the transaction. She maintained that the applicable procedures were unfinished and that responsibility rested with several employees.
The court rejected her defence, emphasising her supervisory responsibility. “As the team leader, the greatest responsibility was with her,” Justice Monica Mbaru ruled.
The judge found that Ms Wachira relied on verbal confirmation from a colleague instead of checking the SWIFT advice slip and completing the necessary verification. The court held that the bank had established a valid reason for dismissal and followed due process, including a disciplinary hearing.
“The claimant was taken through due process,” the court stated, adding that her explanation was unsatisfactory. The court consequently rejected her claims for compensation, notice pay and severance.
Ms Wachira had also argued that her acquittal in a related criminal case in July 2018 supported her position. She argued that her acquittal in the criminal case, arising from the same transaction, confirmed there was no dishonesty or negligence.
But the court distinguished criminal proceedings from employment discipline, finding that an acquittal did not determine whether her conduct justified dismissal.
The court also allowed the bank’s counterclaim for Sh9.7 million, the outstanding loan balance, plus applicable interest and costs. The bank had initially claimed Sh11.4 million.
The claimant disputed the debt, arguing that the bank had sold property securing her loans and failed to establish the remaining balance. She said the bank varied the interest rate on her staff loan from the preferential rate to the commercial rate of 24 per cent, despite her appeal against the dismissal remaining undetermined.
The judge found the bank’s counterclaim justified, ruling that preferential lending terms tied to employment ceased after her lawful dismissal.
The ruling came after other employees involved in the same transaction challenged how they were treated by the bank. In November 2023, the court awarded Faith Wairimu compensation equivalent to five months’ salary after finding her termination unfair.
In a separate November 2021 case, another employee, Robert Gatobu, won compensation after the court found he had been constructively terminated.
