Fashion empire Arcadia has said it is “extremely sorry” after reversing a decision that would have seen the firm pay head-office staff facing redundancy half their notice pay.

The fashion group, which operates chains including Topshop and Dorothy Perkins, has said it will pay head-office staff facing redundancy their full salaries.

The U-turn by Arcadia follows reports that 300 head-office staff facing redundancy would receive as little as 50% of their salary and would be paid through the furlough scheme, rather than receiving their full salary.

A statement from the fashion group said: “We recently implemented a policy for those employees who are working their notice on furlough to receive their furlough pay instead of their full pay.

“We got this decision wrong and the board has today amended this policy to ensure all affected employees will receive their full pay. They will be notified of this decision immediately.

“We are extremely sorry to all those individuals impacted for the distress that we have caused and apologise unreservedly.”

The reversed pay policy, which was previously reported in The Guardian and The Times, was facing legal action from Unite the Union.

The union, which had previously planned to take legal action for illegal deduction of earnings on behalf of more than 40 head-office staff, heralded Arcadia’s U-turn as an “amazing victory”.

Unite 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 to happen in the first place by Sir Philip Green, one of the country’s richest men. ”