Sir Philip Green grabbed women's breasts and slapped their bottoms, a peer has claimed.
Lord Hain told the House of Lords that staff had made hundreds of complaints about the retail tycoon.
Last year Lord Hain named the Topshop boss as the person behind a legal injunction stopping a newspaper publishing allegations of sexual harassment and racial abuse.
Sir Philip previously "categorically and wholly" denied the claims.
Responding to Lord Hain's latest claims, he said: "How sad somebody who already has proven they're prepared to abuse the system wants to continue to behave in this manner."
Lord Hain defended his use of parliamentary privilege.
He said he had originally named Sir Philip "for moral reasons and was not second-guessing or criticising the judiciary".
After Lord Hain named him in the Lords last October, Sir Philip told the Mail on Sunday that he felt he was "being used as target practice when there is zero [evidence] that anyone has turned up with".
"It's injuring my business, all the people potentially working in the business, and it's injuring me and my family," he added.
He also told the paper: "There has obviously from time to time been some banter, but as far as I'm concerned that's never been offensive."
'It was horrible'
In the House of Lords today Lord Hain quoted what the complainant had said about Sir Philip's actions. "'He was touching and repeatedly slapping women staff's bottoms, grabbing thighs and touching legs.
"'Hundreds of grievance cases were raised with HR. The company lawyer who interviewed me then lied. Sir Philip screamed and shouted at staff 'to go to psychologists'.
Mr Hain said the staff member told him that victims had gone to an employment tribunal, but were told "it would not get anywhere" so settled with a non-disclosure agreement (NDA).
"'Some were worn down with spiralling legal costs costing them a fortune. He broke some in the end. It was horrible... He is still doing exactly the same thing. It is rife, it happened all the time. I saw him grab the breasts of others. This has gone on for long time'," Mr Hain quoted the staff member as saying.
He added: "My motive was to stand up for ordinary employees against a very powerful and wealthy boss, who as described to me seemed to think he was above the rules of decent, respectful behaviour."
In January, Sir Philip dropped his legal action against the Daily Telegraph, which had prevented the newspaper publishing details of allegations of sexual harassment and racist behaviour.
And in April, the House of Lords standards body dismissed a complaint that Lord Hain had failed to declare an interest when he named Sir Philip.
Sir Philip's lawyers said Lord Hain had failed to declare his role as an adviser to law firm Ince Gordon Dadds. It acted for the Telegraph in the case.