Super Retail whistleblowers could expand to 10, court documents reveal
As many as 10 whistleblowers could have a potential case about an alleged toxic workplace environment at Super Retail Group, according to fresh court details.
As many as 10 whistleblowers could have a potential case about an alleged toxic workplace environment at Super Retail Group, along with 21 witnesses lined up to tell their story, according to fresh details contained in judge Michael Lee’s ruling that rejected settlement claims by the only two known whistleblowers, Rebecca Farrell and Amelia Berczelly.
Justice Lee’s published ruling also reveals the string of inducements and offers raised in lengthy negotiations to try to get Ms Farrell and Ms Berczelly to settle with the ASX-listed Super Retail in May.
The package discussed over a weekend included pay arrangements for as much as 12 months gardening leave, backpay, bonuses, staggered resignations as company secretaries, working from home on a “special project” for Super Retail, the maintenance of shares in the company, an acceleration of residual equity interests and covering costs of mental health support and outplacement support.
There was also discussion between lawyers for both parties of whether shareholder approval would be required for the benefits sought by Ms Farrell, the former chief legal officer for Super Retail, and Ms Berczelly, former co-company secretary.
Justice Lee’s ruling was partially redacted to maintain a suppression order and seems to point to other unknown parties also subject to a possible settlement offer and who also might have required a shareholder vote to claim their financial settlement. But their identities and particular roles in the negotiations, as well as the wider workplace scandal at Super Retail, remains unknown.
Ultimately, these negotiations in early May failed, leading to a court case that Ms Farrell and Ms Berczelly lost this week. Another trial is set to begin in mid-2025 over both whistleblowers’ claims of a toxic work environment that included bullying, excessive workloads and an alleged affair between Super Retail chief executive Anthony Heraghty and former human resources boss Jane Kelly.
Super Retail, whose chains include Supercheap Auto, Rebel, Macpac and BCF, has consistently and strongly denied these allegations including the accusation of an affair between Mr Heraghty and Ms Kelly.
In his published ruling, Justice Lee detailed some of the negotiations and correspondence between lawyers acting for Ms Farrell, Ms Berczelly and lawyers for Super Retail, which show a potentially wider workplace whistleblower scandal facing the retailer.
As part of the negotiations, there was an offer raised that Ms Farrell and Ms Berczelly’s lawyers, workplace specialist firm Harmers Workplace Lawyers, wouldn’t represent other potential employers seeking to take action against Super Retail. These potential cases would be referred to other firms.
Among a list of 22 bullet points that would cover details of a proposed settlement deal, there was an offer that “five to 10 others with potential cases refer them to separate advice”.
This would have meant that, as part of a deal, Harmers would not act for as many as 10 other Super Retail employees turned whistleblowers who had “potential cases” against the retailer.
The trail of lawyers’ correspondence also reveals there were 21 “witnesses” lined up by Harmers but that if a deal was struck with Ms Farrell and Ms Berczelly the law firm would send a note regarding the settlement to these witnesses and Harmers “would have no further contact with them”.
On April, 26 Super Retail issued a statement to the stock exchange saying it was subject to possible workplace lawsuits from whistleblowers – at that time unnamed – which could cost between $30m and $50m.
According to evidence supplied to the court, and detailed by Justice Lee in his ruling, on May 5 there had been strong progress in negotiations that constituted a “without prejudice offer”. However, there were “sticking points” including the retraction of a press release by Harmers, which was viewed as allegedly defamatory by Super Retail and which later was the trigger for Ms Farrell and Ms Berczelly being fired.
Talks over that weekend included a long list of potential offers and deals to reach a settlement, with the second session on Saturday seeing an offer put forward by Harmers. The settlement included financial benefits.
“There was also discussion of whether shareholder approval would be required for the benefits sought by Ms Farrell and Ms Berczelly.”
In a third session that day an offer was advanced by Super Retail that included potential benefits for Ms Farrell and Ms Berczelly, including gardening leave; staggered resignations; the ability to work on a special legal project; backpay; short term inventive payments; the potential for long term incentives and deferred short term incentives to vest; restricted shares; and the ability to leave during the gardening leave period.
By May 5, the proposed deal had changed and included Super Retail providing each of Ms Farrell and Ms Berczelly with various benefits, including 12 months’ paid gardening leave, various incentive payments, backpay for a period during which the individuals had been on unpaid leave, and shares in Super Retail. Also during the gardening leave period, Ms Farrell and Ms Berczelly would be able to resign on two weeks’ notice and the residual of their gardening leave would be paid out. There would also not be a mutually agreed ASX statement, and Harmers would treat Super Retail work as a conflict of interest for a period of six years.
“Ms Millen records that she was told by (Harmers chairman) (Michael) Harmer that Ms Farrell and Ms Berczelly wanted the construct from the previous day’s discussions ‘back on the table’, in addition to what had been offered that day. This was rejected,” Justice Lee wrote.
“Ms Millen records that she stated that Ms Farrell and Ms Berczelly ‘kept moving their position’ and were ‘not acting in good faith’. Ms Millen also records that Mr Harmer had said he wanted to put out a statement about the proposed settlement, which Ms Millen rejected.”
The substantive case involving an alleged toxic work environment against Super Retail launched by Ms Farrell and Ms Berczelly is expected to be held in the middle of 2025 and run for six weeks.
Super Retail boasts a market capitalisation of $3.54bn, with its shares last trading at $15.68.
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