Dozens of ex-Arcadia staff have vowed to take legal action against the retail consortium, after it became clear their jobs would not be saved when the Arcadia brands were sold.
Arcadia fell into administration in December, becoming the biggest high street casualty of the Covid-19 pandemic.
Earlier this week online fashion giant Boohoo announced it had bought Dorothy Perkins, Wallis and Burton out of administration in a £25.2m deal.
The week before, online-only Asos bought Topshop, Topman and Miss Selfridge in a £330m deal. Neither of the deals included the physical store sites, and as a result thousands of Arcadia employees will be made redundant.
Law firm Simpson Millar has since been contacted by more than 30 former Arcadia employees, and is now in the early stages of an investigation to secure what is known as a ‘protective award’ on their behalf, for the company’s failure to properly consult staff about the mass redundancies.
Staff working for Topshop, Topman and Miss Selfridge were told of their redundancies on 4 February – days after the news of the Asos buy was released to the public.
Simpson Miller has now also received enquiries from former Dorothy Perkins, Wallis and Burton workers further to the Boohoo news that would see 2,450 jobs lost.
Damian Kelly, head of employment law at Simpson Miller, said: “The current situation is making it difficult for many companies across most industries and it is no surprise that retail giants – and particularly those that are so reliant on High Street or shopping centre footfall – are being significantly impacted by the coronavirus pandemic.
He said that while many people would assume that Arcadia would not have to follow the correct employment procedures because it had gone into administration, they still do have a duty of care to their staff under current employment law legislation.
“While some companies are struggling because of the pandemic, they still have a duty under current employment law legislation to carry out a proper consultation with staff at risk of redundancies. Where that does not happen, employees can bring a claim for a protective award,” he added.
The law firm is also being instructed by former employees affected by the collapse of Debenhams, Thomas Cook, Mothercare, Bathstore and Jamie’s Italian.
Last year it secured payments of behalf of 103 ex-Mutiyork staff amounting to £300,000.
A protective award is a payment awarded by an employment tribunal in cases where an employer fails to follow the correct procedure when making 20 or more redundancies and, where an employment tribunal finds in the favour of the employees, they will be able to access the funds via the government Insolvency Service.
A spokesperson for Deloitte, Arcadia’s administrator, said: “It would be inappropriate for us to comment on the employee consultation process. However, we absolutely recognise it is a very difficult time for all those impacted by the administration of the group.”
Group actions ‘increasingly common’
Natalie Todd, LSLA committee member and a partner at PCB Litigation, said Green and his businesses would have to pay attention to the claim.
“There is greater strength in numbers and, if claims against Green and Arcadia were coming purely from individuals rather than in a coordinated ‘Group Action’ approach, it would be much easier for them to be swept under the rug. That is not the case here.
“Group Action claims are definitely on the rise in the UK and we’re seeing a number of them coming across our desks. The pandemic has created an environment where more and more people are finding out they have grievances in common. Swathes of businesses in the same sectors are experiencing the same hardships, so grouping claims together makes logical sense in an increasing number of scenarios.”
She said group actions made it easier for claimants to afford litigation, and allowed claimants to take a coordinated, cohesive and targeted approach.