A COMPANY owned by billionaire tax exile Sir Philip Green has dropped plans to halve payments to sacked staff after the Unite union challenged the legality of the decision.

Mr Green, who lives in the tax haven of Monaco, is the boss of retail group Arcadia, which includes Topshop, Topman, Wallis, Evans, Burton, Miss Selfridge, Dorothy Perkins and Outfit.

Arcadia was to sack 500 of its 2,500-strong head office workforce, after exploiting the taxpayer-funded furlough scheme to keep them employed.

The company told the sacked workers that they will receive only half of the notice money to which they are entitled.

Unite consulted its legal advisers with a view to taking court action, but the company backed down on Saturday, handing the union what it hailed as “an amazing victory.”

Regional officer Debbie McSweeney said: “We understand that it is almost without precedent for Arcadia to apologise for such behaviour towards employees, but this situation should have never been allowed by Sir Philip Green, one of the country’s richest men.

“Unite would like to sincerely thank our members for the solidarity and personal courage they have shown in standing up to Arcadia’s management and playing their part in righting a flagrant pay injustice. It is an amazing victory.

“This is also a warning to other employers who may be thinking of taking advantage of the government’s furlough scheme – Unite is on high alert for such cases and how they may adversely affect our members.

“Unite will want to examine the Arcadia statement in detail before finally deciding to withdraw our legal action.”