Sir Philip Green’s Arcadia Group has entered administration, leaving question marks for its 13,000 staff.
As things stand, the company is still trading while administrators assess what can be done to keep the business alive and rescue as many jobs as possible.
However, all options remain on the table.
That means workers at chains such as Topshop, Dorothy Perkins and Burton face an uncertain Christmas and new year.
Ian Grabiner, chief executive of Arcadia, said: “Throughout this immensely challenging time our priority has been to protect jobs and preserve the financial stability of the group in the hope that we could ride out the pandemic and come out fighting on the other side.
“Ultimately, however, in the face of the most difficult trading conditions we have ever experienced, the obstacles we encountered were far too severe.”
The administrators said they will be “assessing all options available”, which could see brands sold off in separate rescue deals.
Matt Smith, joint administrator at Deloitte, said: “It is our intention to continue to trade all of the brands, and we look forward to welcoming customers back into stores when many of them are allowed to reopen.
“We will be rapidly seeking expressions of interest and expect to identify one or more buyers to ensure the future success of the businesses.”
But if they fail to find bidders or investors, job losses seem inevitable. With that in mind, here are your full rights if you lose your job.
Redundancy pay rights
If you are made redundant, you are entitled to receive notice pay and accrued but unused holiday, according to the law.
You may also be entitled to statutory pay – though this will depend on how long you’ve been with your employer.
Statutory redundancy pay is the least you can expect to be given if you’ve been employed for two years or more.
This is age based so you could get:
- Employed when under 22: half a week’s pay for each full year you worked.
- 22 to Under 41: One week’s pay for each full year you worked.
- 41 and over: One and a half week’s pay for each full year you worked.
How much money you can get
Statutory redundancy is capped at 20 years and a maximum of £538 a week. You can calculate what you might be entitled to on the Government website here.
But you might be entitled to more.
“You should also check your employment contract or a staff handbook to find out if your employer has an enhanced redundancy pay policy,” explained Pam Loch, employment partner at law firm Loch Associates.
It’s important to note your employer could keep you on furlough while you work out your notice so don’t assume you will receive the notice pay as a lump sum payment.
However, this must be paid at your full rate, not your furloughed one.
Holiday pay owed is also set at your full rate.
Redundancy pension rights
When it comes to pensions, the key question is what sort of scheme you are saving into.
If it’s a “defined contribution” one – where money is saved but there’s no guarantee of payouts – nothing will change.
That money is yours, and you will be able to either leave it to grow, or transfer it into a new scheme after your contract ends.
Things get a little murkier with people who have a “defined benefit” or final salary-style scheme.
Final salary pension rights
With these, the company manages the money and pays out a set amount – normally based on years worked – instead.
But with no company to manage that cash, payouts could fall.
The good news is that they won’t disappear entirely.
Joe Dabrowski, from the Pensions and Lifetime Savings Association, said : “The news of the Arcadia Group entering administration will be incredibly worrying for its thousands of current workers and pension scheme members.
“There will be plenty of talk about the pension scheme deficit and whether that will be filled by Sir Philip Green.
“However, the most important thing for concerned scheme members to know is that their final salary pensions will be protected by the Pension Protection Fund.”
“The pensions lifeboat already looks after more than 300,000 members’ pensions and has the financial strength as well as experience to deal with any claims resulting from the company’s collapse.
“Retirees who are already receiving their benefits will continue to receive them, while deferred members, and those who are yet to retire, would get 90% of the expected income, up to a cap of around £40,000 a year.”
Which means, while you might lose out, you won’t be left with nothing.
-- to www.mirror.co.uk