Former Co-op Group chief Kath Harmeston loses £5m employment claim
A senior executive has lost a £5 million employment claim against the Co-op Group.
Kath Harmeston claimed she was unfairly dismissed after blowing the whistle on corporate malpractice at the troubled group.
The former group procurement director said her reputation was trashed after she made public interest disclosures about what was going on at the firm.
But the Co-op fought the claim and the tribunal heard she had been under investigation at her previous job as head of procurement at the Royal Mail amid allegations a firm she had used was "fleecing" the postal giant.
Richard Pennycook, Co-op Group chief executive, told the Employment Tribunal in Manchester earlier this year that Ms Harmeston was dismissed over "performance issues" not any alleged whistleblowing.
The firm said the tribunal had found Ms Harmeston was not unfairly dismissed and had not suffered any detriment on the grounds she had made disclosures in the public interest.
The Tribunal did find that the Co-op deliberately failed to pay the Ms Harmeston's legitimate claims for expenses within a reasonable period.
A spokesman for The Co-operative Group said: "The Manchester Employment Tribunal has dismissed the whistleblowing claim brought by former procurement director, Kath Harmeston, against the Co-op.
"We are glad that the Tribunal has supported our view. We fought this action because it was be right thing to do and in the interests of our members. We would like to thank our members for their support."
The tribunal heard that Ms Harmeston, who now works as a non-executive director for the Ministry of Defence, had left her previous job as head of procurement at the Royal Mail while a consultancy firm she had used - Silver Lining Partners (SLP) was under investigation for over-charging.
Ms Harmeston 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, taking up the role on April 1 2014.
She believed she had "at all times acted with the utmost integrity" the tribunal heard but was suspended from work on June 16 2014.
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.
Internal investigations revealed that Ms Harmeston had not benefited personally from bringing SLP into the Co-op and there had been no fraud committed.
But the hearing was told that upon rebutting the allegations of malpractice she "appeared to go on the offensive" and claims for unfair dismissal were launched.
The tribunal found the Co-op deliberately failed to pay Ms Harmeston's legitimate claims for expenses within a reasonable period and, by doing so, subjected her to a detriment on the grounds that the claimant had made protected disclosures.
Carl Moran, the employment lawyer with JMW Solicitors who was representing Ms Harmeston, said that she felt vindicated by the outcome.
"Ms Harmeston is naturally disappointed with the ruling that her dismissal was not unfair," he said.
"However, Ms Harmeston is pleased that the tribunal has confirmed that she was subjected to detriment by the Co-operative Group Limited on the grounds that she had made protected disclosures and that she is now entitled to receive damages.
"Over the course of almost two years that she has been fighting her case, Ms Harmeston has been aware of its wider significance.
"She maintains that individuals - regardless of their seniority or the size of firm for which they work - should not be subjected to detrimental treatment as a consequence of making protected disclosures in the workplace that are in the public interest.
"The tribunal will now hold a further hearing to determine what remedies Ms Harmeston is now entitled to."