Sir Philip Green has been named as the “leading businessman” who obtained a privacy injunction to prevent the media publishing allegations by former employees.
The 66-year-old chairman of Arcadia Group, which includes fashion brands Topshop and Dorothy Perkins, was named by a peer using parliamentary privilege.
Lord Hain, a Labour peer, told the House of Lords: “I have been contacted by someone intimately involved in the case of a powerful businessman using non-disclosure agreements and substantial payments to conceal [allegations] about serious and repeated sexual harassment, racist abuse and bullying.
“I feel it’s my duty under parliamentary privilege to name Philip Green as the individual in question, given that the media have been subjected to an injunction preventing publication of the full details of a story which is clearly in the public interest.”
Sir Philip said he “categorically and wholly” denied the allegations.
Lord Hain last night defended his decision to “out” Sir Philip.
He told BBC Two's Newsnight he had received “overwhelming support – particularly from women,” adding: “What concerned me about this case was wealth, and power that comes with it, and abuse. And that was what led me to act in the way that I did.”
He continued: “There's no point in being in Westminster ... if you never deploy the precious rights of parliamentary privilege.”
The unveiled allegations have prompted debate over whether the business tycoon should be allowed to keep his knighthood.
Liberal Democrat leader Sir Vince Cable said Sir Philip “narrowly and luckily escaped losing his knighthood over the pensions scandal”.
He added: “If these allegations are correct, he should certainly be stripped of his knighthood.”
On Tuesday, the Court of Appeal granted the Arcadia a temporary injunction banning the naming of Sir Philip, his firm or other details of the case pending a full trial.
“We appreciate that any delay in the publication of matters of public interest is undesirable,” judges said. “That can be met to some extent, in the present case, by ordering a speedy trial.”
The judgement said that of five complainants in the case, two supported Arcadia’s move to gag the Telegraph, including one who wanted to protect their privacy.
Sir Philip was named the day after the prime minister was questioned about the case in the House of Commons.
Jess Phillips, the Labour MP for Birmingham Yardley, said British laws appear to “allow rich and powerful men to do whatever they want as long as they can pay to keep it quiet”.
Ms Phillips asked Theresa May whether she supported the use of non-disclosure agreements “to silence women who have been sexually harassed and others who have been racially abused”.
The prime minister said she could not comment on the ongoing court case but added: “Just as we won’t accept any behaviour that causes people to feel intimidated or humiliated in the workplace, there must be consequences for failing to comply with the law.
“Non-disclosure agreements cannot stop people from whistleblowing, but it is clear that some employers are using them unethically.”
She said the government would be consulting on measures to improve the regulation around the agreements and “make it absolutely explicit” where they do not apply or cannot be enforced.
The Court of Appeal barred the Daily Telegraph from publishing allegations of “discreditable conduct” by five employees and naming the executive accused.
Arcadia Group immediately applied for an injunction when the newspaper requested a comment on a story revealing details of the allegations and how they had been handled on 16 July.
Sir Terence Etherton, Lord Justice Underhill and Lord Justice Henderson upheld a gagging order requested by a senior executive in a company group, plus managers at two companies in the group.
They found the complaints had been “compromised by settlement agreements” under which “substantial payments” were made to the employees who had complained.
Both sides had undertaken to “keep confidential” the subject matter of complaints in the non-disclosure agreements (NDAs), which were breached by complainants who spoke to The Telegraph, the judgment said.
NDAs are widely used by businesses seeking to protect trade secrets and commercial confidentiality, but there are concerns that they can be abused to cover up wrongdoing and silence the media.
The Court of Appeal granted an interim injunction that overturned the August decision by a High Court judge who refused to prevent reports.
Justice Haddon-Cave said the information was “reasonably credible”, there was no “reasonable expectation of privacy or confidentiality” and a considerable amount of the information the newspaper wanted to publish was already in the public domain.
He concluded that publication of the information was “clearly capable of significantly contributing to a debate in a democratic society” and “making a contribution to a current debate of general public interest on misconduct in the workplace”.
The judge said that in his opinion, publication of the information would be in the public interest.
But the appeal judges said Justice Haddon-Cave had “left entirely out of account” the “important and legitimate role” played by NDAs.
“There is no evidence that any of the settlement agreements were procured by bullying, harassment or undue pressure by the claimants,” their ruling said.
“Each settlement agreement records that the employee was independently advised by a named legal adviser.”
The judges added: “The effect of each of the settlement agreements was to put an end to existing or potential litigation and enabled the employees to receive substantial payments … the real issue is whether, in the light of all the relevant facts, breach of that confidentiality is justified as a matter of public interest.”
Appeal judges said that the most serious elements of the allegations, which have been denied, were not in the public domain and there was a “real prospect” that publication could cause irreversible harm to the companies involved “due to adverse customer reaction”.
The trial will balance public interest and commercial harm, as well as human rights to private life and freedom of expression.
Former Liberal Democrat MP John Hemming previously used parliamentary privilege to reveal the existence of super-injunctions granted to former Royal Bank of Scotland chief Fred Goodwin, and to name Ryan Giggs as the footballer who gagged press reports on his affair.
Parliamentary privilege affords members of the House of Commons and Lords legal immunity to ensure they can carry out their duties free from interference.
The Giggs scandal and a wave of other privacy controversies in 2011 sparked calls for legal reform, with MPs and campaigners saying practices barring the media in England and Wales publishing matters reported freely in Scotland, other countries and on social media were outdated and unfair.
A report by senior judges said super-injunctions – which ban reports of their own existence – had been used too frequently and that modern technology was “totally out of control”.
There have also been calls to limit the use of NDAs following the Me Too movement, after it was revealed that disgraced film mogul Harvey Weinstein deployed them to keep alleged victims quiet.
They have also been used in politics, with figures revealing that the House of Commons spent more than £2.4m through NDAs over the past five years.