Super Retail and Harmers law firm held mediation talks over $50m payday

Super Retail offered to settle a claim from at least two aggrieved executives over an alleged ­affair between its CEO and HR manager, but was rejected after the offer fell short of a $50m payday they expected.

Super Retail Group chief executive Anthony Heraghty. Picture: John Gass

Shopping giant Super Retail Group offered to settle a legal claim from at least two aggrieved executives over an alleged ­secret ­affair between its chief executive and its HR manager, but it was rejected after the offer fell well short of a $50m payday they expected..

Harmers Workplace Lawyers, a specialist workplace firm that over the past decade has carved out a niche in certain areas of industrial relations including around sexual harassment, engaged in mediation talks with Super Retail earlier this year as it sought losses and damages on behalf of its clients that could be worth $30m to $50m.

Those mediation talks later failed, The Australian can reveal, with offers of a settlement raised by the company but not accepted.

The failure of mediation to find a workable solution and growing fears it was being held to ransom on baseless allegations led Super Retail on Friday go on the offensive by revealing to the Australian Stock Exchange that it was being pursued by lawyers acting for two current, female Super Retail executives making a number of scandalous claims and potentially chasing as much as a $50m payout.

The law firm had first dispatched a letter to Super Retail, the owner of chains Rebel, Supercheap Auto, Macpac and Boating, Camping Fishing, in December and soon the parties were in ­mediation over a string of claims led by the allegation that CEO Anthony ­Heraghty had been involved in an undisclosed intimate ­relationship with HR chief Jane Kelly.

The Australian understands Ms Kelly, who had worked at Super Retail since 2016 as its head of HR and who left last November, was told by her former employer she would likely soon be named by the legal case now brewing and which became public on Friday morning.

A spokesman for Super Retail has declined to comment on the mediation talks held or the threatened court action.

The spokesman for Harmers also declined to comment.

Super Retail, led by chairman Sally Pitkin and with a 50-50 ­gender-balanced board, conducted a full investigation into the allegations – led by the claim of a clandestine affair and which include ­inappropriate company travel, bullying, victimisation, restrictive access to information, poor record keeping and excessive workloads – and found no ­evidence.

This later gave the board the confidence to publicly back its CEO, who has publicly professed a management style that includes getting ahead of a crisis before it breaks.

Internally, Super Retail also believes it is the victim of baseless allegations dressed up as potent legal threats and ­wielded to trigger a payday for the clients.

Super Retail board’s pre-emptive strike by making a public announcement to the ASX – which also detailed the allegations in public view for the first time – saw shares in Super Retail on Friday plummet by 8 per cent to shave ­almost $280m from its market valuation.

“The board of Super Retail Group Limited today announces that the group expects two employees, represented by Harmers Workplace Lawyers, will shortly commence court proceedings against the group. The group expects the employees to jointly claim loss and damage in the range of $30m to $50m,” its ASX statement said.

“The board’s review and investigations concluded that none of the allegations are substantiated.

“Super Retail Group will defend any court proceedings in relation to the allegations.”

Hours later, Harmers struck back with its own statement claiming the initial statement from Super Retail contained “major inaccuracies” and signalled that there were more than just two Super Retail executives involved in the workplace complaint by using the term “several” when referring to the clients it represents in the matter.

“We can confirm that we are acting for several Super Retail Group employees.

“In response to the ASX statement issued by Super Retail Group today, we believe it contains major inaccuracies. We have no further comment at this stage,” a media spokesman for Harmers said on Friday.

As yet no statement of claim has been filed with the Federal Court by Harmers, and nor has it served any legal papers on Super Retail or its lawyers.

One source had referred to the claims as akin to a “shakedown or blackmail” with the retailer deciding to go on the offensive rather than pay off the employees to go away.

In a podcast interview with the Australian Retailers Association in 2021, Mr Heraghty, who lives in Brisbane where Super Retail is based, said he “sleeps like a rock” at night and tries not to let issues that are out of his control worry him and keep him up at night – although he can be troubled by unsettled issues.

“In Queensland, we have these wonderful thunderstorms which sort of sound like the end of the world; none of them will ever wake me. The only thing that ever keeps me up is when I have something that is unsettled,” he said.

“There are always things that worry you, but you go, oh well, I’ve got a remedy to that the best I can and we will just work it through.

“I think with these jobs you have got to compartmentalise.”

Super Retail is one of Australia’s largest retailers with 736 stores, almost 16,000 staff and annual revenues of $3.8bn.