Taxpayers will have to fund redundancy payments for 400 Arcadia workers in Leeds as administrators say they do not have enough money left to pay for them, a union claims.
The fashion giant's distribution centre in Burmantofts is set to close in April after the company collapsed in November last year.
Now administrators Deloitte have told workers there is no money left to fund their notice pay or redundancy, meaning sacked staff will have to claim redundancy from the Government instead, according to the union.
GMB senior organiser Peter Davies called the news "scandalous" and pointed out Deloitte has made hundreds of millions of pounds selling off Arcadia-owned brands including Topshop, Topman and Miss Selfridge.
"“The administrators have raked in millions overseeing selling off the company names," he said.
“But not one jot of effort has been made on the workers’ behalf who will have to carry on up to the closure date.
"Workers will have to apply for redundancy through the statutory process and the taxpayer will cough up whilst that greedy multi-millionaire [Sir] Philip Green sails off on his yacht.
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"It's absolutely scandalous and time we had much tougher laws in the UK to protect workers who always have to pay the price for these board room disasters.
"Obviously this is an absolute tragedy."
Deloitte declined to comment.
The Burmantofts distribution centre has been in operation since 1922, opened originally as a factory for clothing brand Burton. For years it has handled stock for Arcadia's brands including Topshop, Burton and Dorothy Perkins.
Arcadia called in administrators Deloitte in November, blaming "severely impacted" sales during the coronavirus pandemic.
Earlier this month Deloitte sold off the Topshop, Topman and Miss Selfridge brands to online fashion retailer ASOS for £330 million, putting 2,500 jobs at risk as the new owner said it would not keep any of the brands' 70 shops.
Fellow online giant Boohoo then bought the Burton, Dorothy Perkins and Wallis brands from Deloitte for £25 million. Again, this deal did not include any of the brands' 214 stores, putting another 2,450 jobs at risk.
