LABOUR leader Jeremy Corbyn has called for a shake-up of employment law, to improve the rights and protections of workers, in the wake of the collapse of BHS and the treatment of its employees.

Corbyn said it should be mandatory for employers with more than 250 staff to bargain collectively with unions, in a law change that he claimed would be the best way to guarantee fair pay.

The move was announced after shadow chancellor John McDonnell said that “firm new laws are now needed” following the treatment of staff at BHS.

McDonnell, Corbyn’s closest ally, said there was a need for “criminal sanctions” to deal with rogue employers who have been convicted of what would be a "corporate irresponsibility" offence under Labour’s plans. This would apply where it had been proved that a firm’s employees had been treated callously and recklessly.

Last week’s report from the parliamentary committees looking into the collapse of BHS did not suggest there had been any illegality. But it said the failure to resolve BHS’s pension deficit was a major factor in its demise.

Meanwhile, the High Street chain’s former owner, Sir Philip Green, was accused of “doing evil” in “destroying BHS,” by the Commons Work and Pensions Committee chairman Frank Field.

As a bitter war of words between the tycoon and Field intensified, the Labour MP said he hoped to meet the head of the Serious Fraud Office and the Pensions Regulator this week to discuss the BHS affair.

Hitting back at claims from Green that the committee acted as a “kangaroo court” against him, Field told the BBC: “The idea that it is a kangaroo court, it is just displacement therapy for him – facing up to the evil that he has done in destroying BHS, workers’ jobs, and pension fund liabilities, and a need now for him to do something about it, which is write that big cheque.

“This is the man that’s responsible for the destruction of 11,000 jobs, putting 22,000 pensions at risk. He said he was going to ‘fix it, fix it, fix it’, when he was with us – he hasn’t done so.”

Field said he wanted to discuss with the head of the SFO the sale of BHS last year to retailer Dominic Chappell for £1.

Green, who ran BHS between 2000 and 2015, had previously said he had not broken any rules and there was “no legal liability” for him to fill a £571 million pension deficit. He also said progress was being made in addressing the pensions black-hole.

BHS is in the process of closing down.

Meanwhile, Corbyn, who is facing a leadership challenge from Owen Smith, blasted zero-hours contracts and record levels of poverty among those in work.

Even new Conservative prime minister Theresa May knows she has to “pay lip service” to corporate reform, he said.

After highlighting examples of unions who have won better conditions and pay for their members, Corbyn said: “But the best way to guarantee fair pay is through strengthening unions’ ability to bargain collectively.

“That’s why it should be mandatory for all employers with more than 250 staff to bargain collectively with recognised trade unions.”

Corbyn also criticised Green, saying he had "asset-stripped the company" and “left the government to pick up the pieces”. He added: “The former BHS owner will never know the insecurity faced by his ex-employees or millions of other workers legally exploited by bad bosses.”

Labour has set up Workplace 2020 – an initiative to formulate a new business settlement to benefit workers and employers – and is committed to strengthening union rights and reforming company law, he said.

Meanwhile, one of the biggest trade unions will today decide who to support in the Labour leadership contest.

The Communication Workers Union is expected to back Corbyn, having supported him in last year’s General Election.

Union activists will meet in London to make the decision.

The CWU has around 200,000 members in the Royal Mail, Post Office, BT and other firms.

Corbyn has already received the support of unions including the train drivers’ Aslef and construction workers’ Ucatt.