Retailer Arcadia has agreed to pay the full salaries of more than 40 head office employees who face redundancy.
The at-risk employees, who are based within the organisation's subsidiaries Dorothy Perkins and Topman, were facing a reduced redundancy pay package because they are currently furlough. However, this was vetoed after the employees' trade union representatives Unite threatened legal action.
In July, Arcadia announced that it was cutting 500 jobs from its 2,500 head office workforce. The agreement means that all staff that face redundancy will now receive 100% redundancy payments.
Debbie McSweeny, regional officer at Unite, said: “We welcome this news that Arcadia has u-turned and has now promised to pay head office staff full pay during their notice period.
“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.
“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. Unite will want to examine the Arcadia statement in detail before finally deciding to withdraw our legal action.”
A spokesperson at Arcadia said: “Throughout this pandemic, Arcadia and its board have looked to protect the welfare of its staff and customers in the best and safest way possible. Like all businesses 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.”
