Arcadia under fire over furlough redundancy terms

Arcadia, owner of chains such as Topshop, Burton and Dorothy Perkins, is accused of offering some furloughed employees being made redundant less favourable notice terms, The Guardian reported.

Some of those exiting the business will get full-notice pay, but furloughed staff who are contractually owed more than the statutory minimum have been informed that their payments will be calculated based upon the 80% of pay they received while on furlough.

Some employees who are contractually owed more than 12 weeks’ notice pay have been told that they will only receive furlough rates until the end of October, and that they have to work the final weeks of their notice in the retailer’s offices.

One staff member told The Guardian: “There are some really upset people who have worked at Arcadia for decades. They are not being treated well at all.”

She claimed payments were also being reduced by making staff on furlough take holiday so that they would be entitled to less holiday pay when they departed.

The government has introduced legislation intended to stop businesses using furlough pay rates to calculate redundancy.

In a letter to affected employees, Arcadia noted that there were “differing views in the circumstances” about basing notice pay on furlough rates, but maintained  that based on guidance and legal advice, it was confident it was acting legally and fairly.

An Arcadia spokesman said: “The restructuring of our head office is essential to ensure we can operate as efficiently as possible during these very challenging times. 

“We remain in a consultation process with our head office staff and no decisions will be made until this process has concluded. Throughout this process we will be following all of the government guidelines and legislation. We are listening closely to all of their concerns throughout this process in what we know is a very difficult time.”

A spokesman for the Department for Business, Energy & Industrial Strategy said: “We urge businesses to do right by their employees and pay staff what they are rightly entitled to. Those who do not could find themselves in front of an employment tribunal.”