Voluntary Redundancy

Voluntary Redundancy

I have been considering making some roles redundant as my business tries to recover from the impact of the coronavirus pandemic. An employee has now come forward to put themselves up for redundancy; What does this mean for my organisation and should I accept it and how?

Voluntary redundancy is a situation where staff put themselves forward for redundancy as an alternative to their employer having to make this decision. Although during a redundancy procedure, a company could ask if any staff wish to be made voluntarily redundant, it is not uncommon for some to put themselves forward without being asked first.

In situations of voluntary redundancy, there are couple of key things you should bear in mind – you do not have to accept a request from an employee who volunteers for redundancy. This is because the final decision for who should be made redundant does ultimately rest with the company. However, it is important to bear in mind that voluntary redundancy can help make managing the redundancy procedure easier for you, if managed carefully.

If you accept this employee’s application for voluntary redundancy, this should be processed in the usual way as staff who have been selected, usually via a scoring exercise, to be dismissed due to redundancy. This means that you should provide written notification that their employment is coming to an end by reason of redundancy and when their last day will be. Any redundancy pay entitlements and outstanding holiday pay should be made clear.

You should keep in mind that if the employee has worked for the company for at least two years, they will be entitled to receive statutory redundancy pay. If their contract provides for an enhanced payment for redundancy, this is the amount they should receive.

The employee should also be provided notice as specified in their contract. In the absence of any enhanced period of notice, this should be at least the statutory minimum notice in place when dismissing an employee, as follows:

  • one week where the period of continuous employment is one month or more but less than two years
  • one week for each year of continuous employment, up to a maximum of 12 weeks, where the period of continuous employment is two years or more.

It seems that you do not already have a policy on dealing with voluntary redundancies. Going forward, you should think strongly about implementing such a policy to make clear that regardless of whether volunteers are proactively sought or not, volunteering for redundancy does not mean that the employee will definitely be made redundant. Volunteering for redundancy simply means they are putting themselves forward to be considered; the final decision over whether to accept the request lies firmly with you.

This is important, as it will allow you to reject applications from employees working in certain business critical roles. Being able to reject applications will also allow you to retain a balanced skilled workforce, especially in the event they receive more applications than originally required.

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