Former Co-operative Group Employee Claims Unfair Dismissal For Whistleblowing

Co-operative Group has faced legal action from a former company executive who claims the organisation embarked upon a “deliberate campaign” to compromise her reputation following an act of whistleblowing in which she expressed concerns over what she believes is the company’s malpractice and poor governance.

Kathleen Harmeston was employed as procurement director of Co-operative Group in April 2014 before being placed on ‘garden leave’ in June of that year before being quietly dismissed three months later. Her tribunal hearing is now underway in Manchester and she is seeking £5 million in damages for unfair dismissal.

Ms Harmeston defended her performance at Co-op as well as her prior years of experience in the field of procurement which has made her “a well known person in the industry” with a nomination for Businesswoman of the Year award in 2012.

Explaining the alleged malpractice at Co-op, Ms Harmeston claimed the spending of 70% of the company’s overall £1.5bn fortune was not detailed in the officially published procurement policy released by the organisation. She further stated that Co-operative Group is “haemorrhaging money” due to high costs amassed by hiring management consultant services; a expenditure costing between £4m and £8m during 2013 alone.

Ms Harmeston’s revelations allegedly led to her being put on ‘garden leave’ in June 2014 and later being dismissed from the company entirely in September that year. Allan Leighton, the Co-operative Group chairman, responded to the allegations at tribunal: “We dismissed her because she acted in a manner which was not in keeping with the importance and seniority of her role, nor the values and principles of the Co-op.”

The respondent made further assertions which questioned Ms Harmeston’s credibility as a reliable witness. The company’s legal team explored a dispute she had with the organisation after being hired in which she insisted on having an office based on a different floor to the one she was allocated at the company’s offices in a bid to make her appear resentful towards Co-op.

There was also an emphasis on Ms Hemberton’s career prior to her employment at Co-op, with details of how she had worked closely with a consultancy firm that were investigated for misconduct against Royal Mail when working with the postal organisation several years ago.

Bringing this historic information to light is a not-so subtle effort intended to bring Ms Harmeston’s dependability into question. However, the Co-operative group is likely to be proven to have been aware of Ms Harmeston’s conduct while employed at Royal Mail as her efforts at reducing the company’s expenditure was essential to her being hired by Co-op.

As part of her witness statement, Ms Harmeston maintained that she “at all times acted with the utmost integrity” regarding Co-op’s business interests. She also expressed how she felt about her former employer’s behaviour towards her:

“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.”

An act of whistleblowing is protected by the Public Interest Disclosure Act where there is reasonable belief that an employee was dismissed as part of a company’s response to , an employee voiding their concerns, which results in such action being labelled unfair dismissal.

Ms Harmeston also asserted that Co-op used deceptive conduct as a means of monitoring her when they gave her the code name “Wimbledon” in order to keep aware of her actions using a system that would not lead a “paper trail” back to her. The Co-operative group dismisses all claims Ms Harmeston is making against it and has claimed it will “fully and robustly defend our decision to dismiss Kath Harmeston”.

The ongoing tribunal and is expected to last for two weeks.

How Might Employment Law Change During 2016?

Not since 1996 has a Tory government been had the power to make changes to UK employment law, and there has not been a time in recent memory when so many vital issues underway that could alter the direction of employment law. Here is an general overview of several of the key changes that will shape employment law in 2016, which employers and employees alike should be aware of.

Gender Pay

A revelation of the difference in pay between men and women in the workplace has long been planned and will finally be made available to the public in 2016. From March 26th UK businesses with a staff of 250 employees or more will have to release such information in the public domain along with data showing the difference between bonus payments for each gender.

Although it has been technically illegal to pay women less than men as far back as 1970 when changes were made to employment law, without such a law being strictly enforced businesses have been able to get away with paying less to their female workforce. It is hoped that the public revelation of such information will stop women from being underpaid.

Employers will likely be fully briefed regarding the exact details of what to expect before such information need be revealed.

The National Living Wage

One major change that will occur in UK employment law is the National Living Wage which will be made law on April 1st. This wage gives employees aged 25 and over the right to hold a ‘living wage’, a payment acting as a new top rate on the national minimum wage. This wage will total £7.20, but workers under 25 will not qualify as the minimum wage rate will still apply to them.

Those employers who are found to have not paid their employees the national living wage will receive a penalty twice as severe as what they would previously have been given.

Working Parents

There will also be major developments made in 2016 for the benefit of working parents, such as the plan to provide 30 hours of free childcare to parents with children aged 3-4. The full details of how this change will be implemented is expected later in the year.

Grandparents will also be benefited during 2016 thanks to new legislation that allows them to share parental leave benefits if they are actively caring for a child while working. Details of this change are yet to be finalised.

The Trade Union Bill

The Trade Union Bill 2015 is in the process of being sanctioned by Parliament and should come be be ushered into law in April. This bill is intended to a controversial measure that seeks to place greater pressure on trade unions to reconsider taking strike action; a decision no doubt generated by the increasing number of public sectors that have undertaken strike action in recent years.

The main change involved with this legislation is a new voting system that decreases the likelihood of a strike occurring across those sectors with a greater likelihood of altering the daily routine of of the country when on strike, such as the health and transport industries.

Under the new system 50% of all staff eligible for striking will have to vote on favour of this decision for such a plan to legally go ahead. Furthermore, there must also now be a four month time limit for an action like this to take affect all votes have been cast. A longer notice period for employers is also now required before staff can take strike action.

Another Trade Union Bill change that will assist employers are plans that seek to give a business the right to hire agency workers who will cover the working shifts left by staff who have taken strike action.

Termination Payments

A significant change that could be introduced to employment law this year is for termination payments to be taxed. The Office for Tax Simplification has outlined a plan that could make all terminations taxable under UK law; a major change from the current legislation which only allows termination payments under £30,000 to be tax free.

The Immigration Bill

UK law may also be changed this year in the form of the immigration bill; a change that will seek to punish employers who are proven to have illegally hired foreign workers. This bill extends to all employers in the public sector who are found to have hired employees that are unable to speak fluent English. An new tax known as the ‘immigration skills charge’ may also be handed down to employers who are dependent on hiring foreign labour.