Strategy & Operations » Governance » Co-op faces corporate malpractice tribunal

Co-op faces corporate malpractice tribunal

Kath Harmeston is claiming £5m in damages for unfair dismissal after reporting what she understood was criminal conduct

A FORMER CO-OP Group procurement director turned whistleblower, is taking her former employer to an employment tribunal after she was dismissed for spilling the beans about the supermarket-to-funerals outfit over allegations of corporate malpractice.

Kath Harmeston, 50, was headhunted from the Royal Mail to be the group’s new procurement director. She began her new role in April 2014 and was dismissed just five months later in September the same year before being put on gardening leave.

She is claiming £5m in damages for unfair dismissal after reporting what she understood was criminal conduct.

But the Co-op says Harmeston, who now advises the MoD, was only sacked because her behaviour jarred with her role.

Harmeston claims she was axed after flagging to senior Co-op executives her concerns about various governance issues, corporate malpractice, and breaches of fiduciary duty.

The employment tribunal begins today, January 7, in Manchester.

Allan Leighton, chairmain of the Co-op, said: “We intend to fully and robustly defend our decision to dismiss Kath Harmeston at the 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 tribunal follows a series of difficulties at the Co-op. A joint probe by the Financial Conduct Authority and Prudential Regulation Authority found that its banking arm “fell short of its responsibility to be open with its regulators”, which is “one of the principles that regulated firms must abide by”.

A separate report by Lord Myners in 2014 suggested the Co-op radically overhaul its board and culture following a series of governance failings at the business.

Since then the Co-op Group has announced profits before tax of £124m in the year to January 2015.

The Co-op has been approached for a comment.

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