A former senior executive at the Co-operative is suing the embattled group for unfair dismissal after blowing the whistle on what she believed was criminal conduct.
The Co-op group’s former chief procurement officer Kath Harmeston is asking for more than £5m in damages at an employment tribunal, which started yesterday in Manchester.
Harmeston claims to have been “hounded out” after warning bosses of corporate malpractice, governance issues, bribery and other corrupt practices.
Giving evidence to the tribunal, Harmeston alleged she was the target of “a deliberate campaign to comprehensively disparage my reputation”, and went on to state that senior Co-op executives led a “culture of cover-up and obfuscation” and were “supported and shored up by a cadre of overpaid and unfettered consultants”.
Harmeston told the tribunal that after challenging the group’s practices she experienced a “growing atmosphere of resentment and mistrust” from its senior management.
Commenting on the tribunal Co-operative Group chair Allan Leighton said: “We intend to fully and robustly defend our decision ... We dismissed her [Harmeston] 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.”
Harmeston joined the Co-op as group procurement director in April 2014 on a cost-cutting brief after being headhunted from the Royal Mail. As the Royal Mail’s procurement director she managed a £2bn budget and delivered £650m worth of savings for the postal giant.
She was charged by the Co-op with cutting costs after the group announced losses of £2.5bn for 2013, the worst results in its 150-year history.
However, on 16 June Harmeston was suspended by the group, allegedly after a document emerged linking her to Silver Lining Partners, a consultancy firm used by Harmeston during her time at the Royal Mail which was under investigation for alleged malpractice.
In September 2014 Harmeston was made redundant and put on gardening leave.
The Silver Lining Partners document, Harmeston told the tribunal, was being used by the Co-op in order to get rid of a “challenging and evidently troublesome employee who was seeking to hold the executive to account for its blatant and continuing disregard of its own policies and procedures”.
Since leaving the Co-op Harmeston has been working an independent director for the Ministry of Defence’s equipment and support division.
Chief executive Richard Pennycook and COO Pippa Wicks are expected to testify at the employment tribunal, which opened in Manchester on 7 January and is anticipated to continue until 22 January.