New codes for C&A at UK closing time

C&A’s socially responsible past has not ensured a worry-free exit from the British labour market. Stephen Overell reports

There is always a certain glee that attends bad news for paternalistic employers. One group of critics can find vindication that, whatever the values of an organisation, it is, and always will be, the time-honoured role of capital to fleece labour.

Another can find vindication that life in the marketplace will always be harsh, and propounding socially responsible messages from the rooftops merely leaves you further to fall when difficult times come.

Few, it seems, like paternalistic employers. That businesses should make money and stop at that, seems a popular view. No surprise then that C&A’s attempts to extricate itself cleanly and calmly from Britain and Ireland have not been bump-free. Value statements such as, “We value long-term relationships at every level with our customers, our staff, our suppliers and with the communities in which we live and work” sound a little hollow when every one of 4,800 jobs in 109 British stores is to vanish.

The rigorously enforced codes of conduct for suppliers and their contractors on labour standards that ensured the group did not fall foul of the press whenever child labour hit the headlines, don’t look so impressive now C&A is closing and newer, less fussy American bulk fashion outlets are doing fine.

The official reason for the closure proposals is that ferocious competition has led to unsustainable losses of £250m over the past five years. Despite being a familiar face on the high street since 1922, C&A’s mid-market, mid-range cachet has not managed to endure being squeezed between small designer outlets and aggressive discounters.

Arcadia’s Principles for Men suffered much the same fate last April. The firm’s decision to buy stock centrally in Europe is also seen as failing to take account of subtle local tastes. People just don’t want their stuff – or didn’t until the announcement (one Glasgow store saw sales rise by 299 per cent on the Saturday following the news).

“Achieving a turnaround in the UK would involve greater cost and risk than the company is able to bear any longer,” said Lucas Brenninkmeijer, chief executive.

But with 560 stores in 12 EU countries producing a turnover of a massive £3bn, the C&A closure announcement has raised the same suspicion from trade unionists that got Ford into trouble two months ago: the charge that it is cheaper to sack people in Britain.

Barry Allen, spokesman for shopworkers’ union Usdaw, said, “C&A has always been an anti-union employer and while it recognises unions when the law forces it to in other European countries, it has picked Britain because it can ignore them here and it is far cheaper to sack people here than elsewhere. The sale and lease of its properties should make it a bit of money.”

Needless to say, C&A hotly denies this. And yet despite its attempts at “openness and generosity” in its redundancy packages – and in how it treats its staff in the run up to closures – some C&A staff have been spreading the word that the figures are “derisory”.

Redundancy payments have been calculated at a rate of twice the statutory minimum, without capping the figures to the Government’s maximum £230.

Thus, everyone, management and workers alike, will receive twice weekly salary per year of service. For staff with less than two years service, who don’t qualify for redundancy (about a third), they will receive two months salary if they stay on until the shops close.

Is this miserly? By the standards of the voluptuous employment contracts in the City of London, quite possibly. But is this mean for retail? Ben Wood, employment solicitor at Lupton Fawcett, said, “Retail is not notorious for paying generously and given that they are quite within their rights to pay the minimum, it is not too bad.” A source in British Home Stores HR department confirmed that it is “entirely typical” for the sector.

Suzanne Chevous, head of HR for C&A, said, “No one likes making people redundant, it is important to us to do it as responsibly as we can. There are obviously differences in salary, but no one will be treated differently from anyone else in how redundancy is calculated.”

Most the stores are to close in January after the Christmas rush, with the exception of those in Preston, Croydon and Middlesbrough, which are set to close in December. The firm is currently involved in the elections to comply with the 90-day redundancy consultation laws. No one has been guaranteed a job with the company elsewhere in Europe.

As for the rest of its redundancy package, C&A has said it will provide job search, CV writing and interview skills training to staff, carried out both by in-house training staff and external suppliers. A total of 9,000 training days have so far been earmarked and are to be targeted in employment blackspots.

Equally, the firm intends to encourage new tenants that take over its stores, to employ existing staff. “People in south east England and central London are unlikely to have much difficulty in getting a job,” said Chevous. “We have been inundated with requests for our staff and have had to set up a separate department to deal with them all.”

However, regardless of a company’s ethical behaviour, redundancies are never going to be anything but bad news. “A paternalistic heritage does not necessarily make an employer better at looking after staff than others,” said Nick Burkett, employment research fellow at the Institute for Public Policy Research.

“But because of the raised expectations, it is always more disappointing when they fail. That can make other employers a little more smug.”