Cath Kidston, the beloved British lifestyle brand, has received widespread criticism for its decision to make 900 of its UK workers redundant just before their scheduled payday. Initially, it was announced that these employees would not receive payment for the month of April. However, following immense public backlash, Cath Kidston has now backtracked on their decision and has agreed to provide back-pay to its staff.
The controversial move to lay off employees came about after the brand was acquired by Barings Private Equity Asia, its previous owner, who brought it out of administration. In an email sent to the affected staff members, management explained that not only would they not be receiving their April salaries, but they would also miss out on redundancy payments, compensation for notice periods, and holiday pay. These decisions were justified by citing the company’s bleak financial situation. Employees were instead advised to seek assistance from the government-backed Redundancy Payments Service, a process that can be lengthy, taking up to six weeks to process claims, and with a maximum cap of £538 per week.
However, on Wednesday evening, CEO Melinda Paraie issued an email to the staff, delivering somewhat of a silver lining. According to the new message, the company has decided to pay its employees for the period between April 1-20. Not only that, but those who had been furloughed would receive 80% of their salaries, as mandated by the government’s job retention scheme, up to a maximum of £2,500. Nevertheless, this means that the salaries that had originally been scheduled to be paid on April 24 will now be delayed until April 30.
Despite the apology for the delay and the rectification of some of the issues, the CEO explained that extensive efforts had been made behind the scenes to secure these payments. The brand had been in the midst of a turnaround when the COVID-19 crisis struck, resulting in a significant decline in sales. Consequently, upon its acquisition by Barings, all 60 Cath Kidston stores in the UK were immediately shuttered, leaving only 32 jobs intact.
While the brand is working to navigate these difficult times, it is clear that the treatment of its employees has caused outrage among the public. The incident serves as a reminder of the importance of fair and compassionate treatment of workers, particularly during times of crisis.
1. https://www.gov.uk/redundancy-your-rights (Government guidance on redundancy rights)
2. https://www.theguardian.com/business/2020/apr/23/cath-kidston-apologises-for-failing-to-pay-workers-on-time (The Guardian article on the Cath Kidston backlash)