Renewed calls have been made to strip Sir Philip Green of his knighthood after the retail tycoon allegedly subjected employees to racist, sexist and physical abuse.

Labour said the honour should be removed if allegations made by five employees against Sir Philip proved true and condemned the “clearly flawed” honours system. 

Details of the allegations against the Topshop boss involving five employees were revealed online by the Daily Telegraph after the businessman’s legal action against the paper ended on Friday.

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He is accused of groping a female executive and then paying her more than £1m to stay quiet, as well as mocking a male employee’s dreadlocks, the newspaper said.

Sir Philip also allegedly dragged a woman around in a headlock and smashed a male employee’s mobile phone.

He has categorically denied the allegations, insisting he never intended to cause offence, and accused the newspaper of “pursuing a vendetta” against him and his staff.

Lawyers representing Sir Philip told the Telegraph: “It is further denied that any of Sir Philip’s conduct towards employees amounted to any type of crime, or anything that would amount to gross misconduct, or a serious risk to health and safety.”

However the news raised fresh questions over whether he should retain his knighthood and the use of controversial gagging clauses known as non-disclosure agreements (NDAs).

Ian Lavery, Labour party chairman, said: “If the allegations are true, then Phillip Green should be stripped of his knighthood.

“The public rightly expect high standards from public figures and they’re not getting it. The honours system is clearly flawed and the prime minister should take steps to remove honours from people who bring their office into disrepute.”

Mr Lavery also condemned the use of NDAs to suppress allegations of criminal behaviour and pledged his party would review the system if elected.

Liberal Democrat leader Sir Vince Cable told The Independent: “I would have thought that by now Philip Green would understand the wisdom of the old saying that if you find yourself in a hole, stop digging.

“It is appalling that he is still threatening legal action and still hiding behind gagging orders. The government needs to make good on its promise to scrap the abuse of NDAs.

“The honour committee should also take urgent action to restore the integrity of the honours system of which Philip Green’s knighthood currently makes a mockery.”

The decision to remove a knighthood would be taken by the Honours Forfeiture Committee, a Whitehall panel which has stripped honours from former RBS boss Fred Goodwin, and Rolf Harris.

Maria Miller, Conservative chair of the women and equalities committee, urged the government to take action on the use of gagging clauses to cover allegations of criminal behaviour.

She told said: “It’s no good [the government] simply talking about a plan for the future when here and now we have thousands of people in Arcadia thinking how do yesterday’s events affect their protections at work.

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“We were told that the misuse of NDAs in the Harvey Weinstein case was unusual and an extreme example.

“Well, revelations this week and the evidence we have received into our current inquiry on NDAs suggest this is anything other than unique, and very much par for the course.”

Sir Philip obtained the injunction last year after the newspaper contacted him to say it intended to publish allegations of misconduct made against him by five employees, who had received substantial sums of money to keep their complaints confidential.

It emerged last week that he had decided to drop the case because it was “pointless” after Labour peer Lord Hain used parliamentary privilege to name him as the businessman behind the injunction.

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