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Voluntary redundancy is a route recognised by tribunals as a way of lawfully avoiding compulsory job losses. Here’s what you need to know.

The opportunity to volunteer can be offered at any point – usually though, you would offer voluntary redundancy at the beginning of a process as those who volunteer will not need to be taken through the remaining process saving time and cost.

Why would an employee volunteer – avoiding the redundancy process is one incentive to volunteering, but usually you’ll need to offer a little more than that if employees are going to offer to leave. Whether it’s a lump-sum tax-free payment, payment in lieu of notice, or holiday pay rather than forcing individuals to take holiday during notice, you generally have the flexibility to offer a package that’s right for the business, but also tempting for employees.

Unfair dismissal – don’t forget that even if employees volunteer for redundancy, in law they’re classed as “dismissed” and so are still able to claim unfair dismissal. You, therefore, need to think carefully about how you frame the offer of voluntary redundancy. Be clear that you’re not prejudging the situation and ensure that your offer of voluntary redundancy doesn’t in any way discriminate against anyone with a protected characteristic.

Setting a deadline – usually a good idea! One of the big incentives for you to offer voluntary redundancy is that you’re unlikely to have to continue with the redundancy process for those volunteering. If however, you’re still going to have to go through the process then the longer their decision takes, the less benefit there is to you offering voluntary redundancy.

Pooling employees – if you’re doing so because you have more employees than roles available, think carefully before you offer voluntary redundancy (particularly if the voluntary redundancy offer comes before the scoring process). If individuals volunteer who you’d have preferred to keep, turning down their offer may show that you have prejudged the process and is likely to taint the rest of the discussions making successful unfair dismissal claims likely.

If you need advice or guidance on managing a redundancy process – Intelligent Employment is here to help. Find out how. 


This update is accurate on the date it was sent (10 November 2022), but may be subject to change which may or may not be notified to you. This update is not to be taken as advice and you should seek advice if anything contained within affects you or your business.

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