The owner of Topshop and Topman has backed down and agreed to pay full salaries to head office staff facing redundancy – three weeks after the Guardian revealed it had been accused of potentially breaching employment law.
The Unite union described the U-turn as an “amazing victory” and said the apology made by Sir Philip Green’s Arcadia Group was “almost without precedent”.
On 24 August the Guardian reported that Arcadia – which also owns Miss Selfridge, Evans, Wallis, Burton and Dorothy Perkins – had angered and upset some staff by offering employees being made redundant less favourable terms for their notice periods, linked to the government’s furlough scheme.
This meant that some people were only going to receive 50% of their notice pay, Unite said.
The struggling group had announced in July that it was axing several hundred head office jobs after a slowdown in trade during the coronavirus pandemic.
It had emerged that while some workers would receive full notice pay, furloughed workers who were contractually owed more than the government’s statutory minimum were told that their payments would be based on the 80% of pay they received while on the job protection scheme.
One group of Arcadia staff who were contractually owed more than 12 weeks’ notice pay were told they would receive furlough rates of pay until 31 October and then must come back into the office to work the last weeks of their notice period.
At the time, one member of staff being made redundant said: “There are some really upset people who have worked at Arcadia for decades. They are not being treated well at all.”
In a letter to workers seen by the Guardian, Arcadia had originally acknowledged there were “differing views” but it was confident it was acting lawfully, fairly and reasonably.
However, an employment expert at the law firm Leigh Day said he thought the terms Arcadia had offered to some staff were “open to legal challenge”.
Now Arcadia has said it made the wrong decision. A spokesman said its actions related to about 300 head office redundancies and the company was “extremely sorry to all those individuals impacted for the distress that we have caused and apologise unreservedly”.
A statement said: “We recently implemented a policy for those employees who are working their notice on furlough to receive their furlough pay instead of their full pay.
“We got this decision wrong and the board has today amended this policy to ensure all affected employees will receive their full pay. They will be notified of this decision immediately.”
The Unite union had threatened to take legal action for alleged illegal deduction of earnings on behalf of more than 40 head office staff.
It called the promise to pay head office staff full pay during their notice period an “amazing victory”.
Unite’s Debbie McSweeney said: “We understand that it is almost without precedent for Arcadia to apologise for such behaviour towards employees – but this situation should have never been allowed to happen in the first place by Sir Philip Green, one of the country’s richest men.
“Unite would like to sincerely thank our members for the solidarity and personal courage they have shown in standing up to Arcadia’s management and playing their part in righting a flagrant pay injustice.”
She claimed it may also serve as a warning to other businesses.
“This puts down a strong marker to other employers who may be thinking of taking advantage of the government’s furlough scheme. Unite is on high alert for such cases and how they may adversely affect our members,” McSweeney said.
“Unite will want to examine the Arcadia statement in detail before finally deciding to withdraw our legal action.”