U.K. Lawmaker Protests Threat to BHS Workers’ Severance Pay

Updated on
  • Keeping stores open longer hurts those with new jobs, he says
  • Chain’s collapse fueled concerns over U.K. workers’ safety net

The chairman of a U.K. parliamentary committee examining the demise of retailer BHS is protesting what he calls a threat to severance payments for workers who are set to lose their jobs.

The lawmaker, Frank Field, said he wrote to Business Secretary Greg Clark to question what he described as “another hammer blow to BHS workers” who face unemployment after the department-store chain collapsed in June.

Some BHS staff who had expected to be out of work by Aug. 20 are now being asked to stay until Aug. 28 or later, Field said in an interview. That makes it difficult for those who have secured new jobs to know when they will be released, he said. If workers leave voluntarily before the stores close, they could forfeit their severance packages.

The downfall of BHS, which employed 11,000 people, has fueled concerns about the safety net for U.K. workers who face unemployment or retirement. The retailer, which collapsed a year after being sold by billionaire Philip Green to former race-car driver Dominic Chappell, was weighed down by a 571 million-pound ($746 million) pension deficit, and funding gaps at other companies have grown since the U.K.’s vote to leave the European Union.

The delay in shutting BHS arose because liquidator Hilco Capital is using the 57 stores still open to sell non-BHS goods as well as the outlets’ remaining inventory, according to Field.

“BHS staff now find themselves in an impossible situation,” Field wrote in the letter. Employees are “effectively being held to ransom by the liquidator.”

Hilco declined to comment. Duff & Phelps, the advisory firm appointed as administrator to protect BHS from insolvency, said it’s speaking with employees to make them aware of changes to closure dates “and working with them to support them during this time.”

Lin Macmillan, a former BHS employee who is leading a campaign to put pressure on former owner Green to make a sizeable contribution to the pension fund, said delaying the store closings was actually hurting some employees by making them choose between their severance packages or new jobs.

“They’ve all been looking for other jobs and don’t want to relinquish one if they can get one,” Macmillan said.

(Updates with Duff & Phelps comment in seventh paragraph.)
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