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Executive claims she was sacked by Co-op after blowing whistle on malpractice

Published 07/01/2016

Kathleen Harmeston was former group procurement director at the Co-op Group
Kathleen Harmeston was former group procurement director at the Co-op Group

A senior executive has launched a £5 million damages battle against the Co-op Group, claiming she was unfairly sacked after blowing the whistle on corporate malpractice at the troubled organisation.

At an employment tribunal hearing in Manchester, Kathleen Harmeston, the former group procurement director, claimed she was subjected to " a deliberate campaign to comprehensively disparage my reputation" after she made public interest disclosures.

But the tribunal also heard that Ms Harmeston had left her previous job as head of procurement at the Royal Mail while a consultancy firm she had used - Silver Lining Partners (SLP) - had been under under investigation amid allegations by a Royal Mail whistle blower that it had been "fleecing" the postal giant.

And questioned by Andrew Burns QC, representing the Co-op, the claimant agreed she had not told her new employers about the matter and that she had later employed SLP to work at the Co-op. The Co-op alleges this was done even though she did not have the authority to do so.

Ms Harmeston was head-hunted by the Co-op Group to improve procurement practice within the crisis-hit business and achieve substantial savings, the hearing was told.

In her witness statement, she said that having taken up the role on April 1, 2014, she believed she had "at all times acted with the utmost integrity" and had "always acted in the best interests of the respondent (the Co-op Group)".

Her statement added: "The respondent's attitude towards me changed in a negative way following the making of those protected disclosures and the respondent initiated a disciplinary process against me, claiming that the trigger for the commencement of that disciplinary process was the receipt by the respondent of an anonymous whistle-blowing complaint which I contend contained a number of false statements."

She claimed that her suspension from work on June 16, 2014, was "disproportionate in terms of the nature of the issues presented to me and antithetical with regard to how such allegations and potential issues should be addressed".

She added that her dismissal "could lead one to believe that I had committed some very serious act or acts" and described it as humiliating.

The statement said: "It is difficult for me to escape the conclusion that the respondent embarked upon a deliberate campaign to comprehensively disparage my reputation with staff, suppliers and within the Executive Search community, seeking to neutralise the impact of my disclosures and to utterly destroy my hard-won reputation and career."

Ms Harmeston said it was a "total coincidence" she left Royal Mail while the activities of SLP were being investigated by auditors and outside security firm, Kroll.

She said there was "no case to answer" against SLP, which she claimed had saved Royal Mail money, and she described the firm as "competent change agents".

However, Royal Mail's own investigation concluded SLP did not have the competence to do the work they were asked to and the contract was terminated, the hearing was told.

In a 74-page witness statement Ms Harmeston said the Co-op had tried to destroy her reputation and career.

She claimed the firm was "haemorrhaging" money on the hire of management consultants paid "way in excess" of the going rate and the firm had paid up to £8 million more than it should have done in 2013 alone for consultancy services due to "endemic" non-compliance with proper procurement procedures.

It is claimed that one employee, Pippa Wicks, was known as "Pippa charge by the hour" and had worked as a consultant for the Co-op before being taken on as chief operating officer, and was charging £8,000 a day, the rates agreed by the chief executive Richard Pennycook.

But in legal documents given to the tribunal the Co-op countered that Ms Harmeston's claims of "whistle blowing" for the public good was a "cynical after thought" and a "smokescreen" for her own misconduct.

The firm said she knew about SLP's "incompetence and profiteering" at the Royal Mail - yet employed them in her new job at the Co-op.

The Co-op's counter claim states: "It transpired that she had left Royal Mail Group under a cloud after the SLP affair, was poor at her job and exhibited appalling judgement in recruiting SLP.

"It was her behaviour, attitude and performance which was the reason for her dismissal."

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