Sad to see this and that you got it on your new car.
A repair is going to make it look better but maybe not perfect. The new oem seat cover is what's going to get the best results from it. Then it's not so easy to handle this with your co-worker. But if he or she is a stand up guy/gal they stand for the costs. Or at least some parts of it. Get both the costs for doing the repair of the seat and replaced with an oem seat cover. Maybe make a deal that the co-worker stand for the costs up to the repair of the damage and you for the rest to a new seat cover. If it's getting discussions of what the co-worker will be pony up with. Just a suggestion as she/he would pony up for the whole cost.
Hope it's sorting out to the best for you.
/ Tony