Body Shop employees fired in mass-sacking urge ministers to reform ‘exploitative’ laws

Exclusive: Former employees launch petition calling for new Anita’s Law – named after Body Shop founder Anita Roddick – to better protect workers

Administrators for the Body Shop have confirmed more store closures (Lucy North/PA)

Body Shop employees fired in a “brutal” mass-sacking have urged ministers to intervene by amending the law to protect workers and the taxpayer from “exploitative” practices when firms fall into administration.

The high street favourite shocked loyal staff by firing some 270 people on a hastily arranged Microsoft Teams call last month, effective immediately, before announcing a further 489 job losses and 75 store closures the following week.

Employees at the company – including women on maternity leave and others who had worked there for over a decade – told this publication they had been left “on the verge of losing everything by a company that once valued ethics and community” after being left to claim unpaid wages from the government instead.

In an email seen by The Independent, administrators for the Body Shop admitted they did not follow “normal regulations” on properly consulting employees or their representatives before dismissing them, saying there was “insufficient time” to do so.

But they argued that they had not properly consulted employees because of their legal duty to take actions to benefit all of the company’s creditors – to which end a “swift reduction” in head office payroll costs was judged to be required.

It is not uncommon for companies in financial distress to fail to uphold employee’s rights because of the duty upon directors to maximise their creditors’ returns – prompting solicitor Michael Newman, of the firm Leigh Day, to question whether “the law has got the balance right between creditors and employees”.

It is a question the government is now being urged to look at, as Body Shop employees launched a new petition demanding “urgent legislative reform to protect [workers] from such exploitative practices”.

Surpassing 2,000 signatures a day after it was set up, the petition warns that “existing laws are enabling predatory practices that harm our high streets and burden the taxpayers”.

The former employees urged local MPs and the Department for Business and Trade to “take immediate action” to stop “corporate creditors being prioritised ahead of employees and scrap the 14-day administration loophole, which allows the instant sacking of so many staff without redundancy”.

The petition calls for changes to be dubbed “Anita’s Law”, so-called after Body Shop founder Anita Roddick.

“It couldn’t be more ironic that the most unethical thing has happened to what I would say is one of the most ethical brands,” one of the petition’s founders told The Independent.

Sophie Campbell-Adams, of Britton and Time Solicitors, said the shake-up demanded in the petition would likely “require an overhaul of the current legislation and introduction of a new process or entirely new regulations in order to deal with scenarios such as this”.

She added: “Whether or not the proposed change is feasible will depend on whether lenders will provide finance to companies knowing they will rank on par or below employees in the event that the company becomes insolvent.

“Any potential changes will need to take into account the impact they would on industries and their ability to secure debt finance. This is not an overnight fix and will require analysis of the financial landscape and businesses as a whole.”

While Mr Newman said he was sure the petition’s demands are achievable, he said the bigger question was over whether the government would prioritise such reform ahead of a looming general election.

He added: “There is a real need to make sure workers are protected, at a time when inflation and cost of living means your sources of income are more important than ever. Labour, in particular, should reflect on whether this should be a priority for them in any forthcoming manifesto.”

The government and FRP Advisory have been contacted for comment.