Sir Philip Green’s Arcadia sorry for ‘furlough loophole’ payments
SIR PHILIP GREEN’S Arcadia Group has been forced to apologise over a furlough pay dispute with its employees, with a company spokesman admitting “we got this decision wrong”.
The struggling retail empire, whose brands include Topshop and Dorothy Perkins, had been threatened with potential legal action from trade union Unite over claims that it was paying some of its head office staff only 50 per cent of their redundancy notice pay.
The company has made 300 people redundant at its head office. The Times reported that the company was using a loophole in the Government’s furlough scheme rules to claim tens of millions of pounds in government handouts but then paying staff at reduced rates instead of full pay during their redundancy notice period.
Many higher-earning employees would have received as little as 50 per cent of the notice period pay they would have been entitled to if Arcadia Group had not taken advantage of the furlough scheme, The Times reported.
A Unite spokesman said it was taking legal advice for “illegal deduction of earnings” on behalf of more than 40 Arcadia head office staff.
Last year, The Daily Telegraph disclosed that Sir Philip Green had paid a female executive more than £1million after she accused him of groping her.
He was also alleged to have racially abused a black employee.
An Arcadia spokesman said: “Throughout this pandemic, the Arcadia Group and its board have looked to protect the welfare of its staff and customers in the best and safest way possible. Like all companies within the retail sector and beyond, many tough decisions have had to be made during these very exceptional circumstances, including the restructuring of our offices. During this process we have observed all the guidelines and legislation.
“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. We are extremely sorry to all those individuals impacted for the distress that we have caused and apologise unreservedly.”