The ex-managing director of London screen printer Augus
tus Martin has been accused of trying to blackmail its directors after they made him redundant.
But Michael Withington instead accused directors Lascelle Barrow and Barrie Dix of concocting a "fabricated story".
Dix told a preliminary employment tribunal hearing that Withington demanded a £1.1m payout or he would expose some undisclosed working practices to the firm’s customers and the press.
Dix said Augustus Martin made redundancies in December 1999 and January 2000 after it posted its first ever loss.
In March 2000 Dix and fellow director Barrow proposed to £80,000-a-year Withington that to further cut costs they would move back to become joint managing directors and transfer him to another senior position. Withington refused and was made redundant on 28 May. He instigated proceedings for unfair dismissal in July 2000 and left the firm on 15 August.
At the last of a series of without prejudice meetings at ACAS on 10 October 2000, Dix said an adviser to Withington presented a settlement option document, with attached newspaper articles showing compensation to employees winning tribunals brought under the Public Interest Disclosure Act 1998, which protects whistleblowers.
The demand for £1.1m was then made, although the adviser suggested Withington would probably settle for £750,000, said Dix. He claimed the adviser also suggested that once details of the firm’s working methods were made public, it could face civil and criminal action from customers.
Dix said that from the first without prejudice meeting on 14 July 2000 there had been "underlying innuendoes" of publicising alleged misconduct but under cross-examination from Withington, Dix admitted the first time he himself had mentioned the word blackmail was at the 10 October meeting.
Withington put it to Dix that throughout the meetings he had only been referring to disclosures under the Public Interest Disclosure Act that would come out at the tribunal.
Withington started his cross-examination of Dix by asking him about a re-tender for a Sainsbury’s contract, but Ian Gatt, representing Augustus Martin, objected, and said Withington was trying to undermine Dix’s credibility by referring to a co-lateral matter. The chairman upheld the objection and said that line of questioning could only be used at the substantive hearing, which follows the preliminary one.
The preliminary case was brought by Augustus Martin in an attempt to remove the privilege of without prejudice from the series of eight meetings held between July and October 2000.
The hearing continues.
Story by Gordon Carson
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