Topshop owner forced to make U-turn after offering staff just 50% of redundancy pay

The fashion empire behind Topshop has been forced to make a U-turn after telling staff they would receive just half of their redundancy pay.

Arcadia Group, which is owned by Sir Philip Green, has issued an apology to workers after wrongly telling them that they would receive furlough pay instead of their contracted redundancy payout.

Arcadia, whose high street brands include Topshop, Topman, and Dorothy Perkins, previously said it was only going to pay some of its employees as little as 50% of their notice pay.

It comes after the business announced 300 head office redundancies in July, amid millions of pounds in losses due to the Covid-19 outbreak.

A company spokesman said that Arcadia is "extremely sorry to all those individuals impacted for the distress that we have caused and apologise unreservedly.”

"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 company said in a statement.

The Unite union said it had threatened to take legal action for illegal deduction of earnings on behalf of more than 40 head office staff.

Responding to the U-turn, Unite said it's an "amazing victory" and hailed the promise for full payouts for staff during their notice period as a welcomed U-turn.

Unite regional officer 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 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. It is an amazing victory."