Thinking of Voluntary Redundancy?
How it works, and how to get a better deal
Summary
- Voluntary redundancy means putting yourself forward to leave when jobs are being cut.
- You usually still get statutory redundancy pay, and often more.
- The first £30,000 of a redundancy payment is usually tax free.
- The terms are often negotiable, so don't accept the first offer without checking it.
Your employer is cutting jobs and asking for volunteers. It can feel like a gamble: take the money and go, or stay and hope your job survives.
Voluntary redundancy can be a good deal, but only if the deal is good. Here's how it works, and how to make sure you're not short-changed.
What is voluntary redundancy?
Voluntary redundancy is when you put yourself forward to leave when your employer needs to cut jobs. It's usually offered before compulsory redundancies, to reduce how many people are forced out.
Volunteering doesn't guarantee you'll be accepted. Your employer can say no, for example if it needs your skills.
If you're accepted, you're still being made redundant in law. So if you have two years' service, you're entitled to at least statutory redundancy pay.
What should a voluntary redundancy package include?
A voluntary redundancy package is often better than the legal minimum. Check it covers:
- Your redundancy payment, statutory or enhanced, whichever is higher
- Your notice pay, or pay in lieu of notice if you're leaving early
- Any holiday you have built up but not taken
- Bonus or commission you have earned
- Pension contributions, and any early retirement option
- An agreed reference
Many employers set out voluntary redundancy terms in a settlement agreement, a contract in which you give up the right to make claims against them. It only binds you once you've had independent legal advice and signed it, which the employer usually pays for.
Our philosophy
- Too many people get a raw deal from companies and corporations because of unfair economics
- Standing up against corporations
- We only represent individuals, never businesses
- If you've been treated badly by the system, Grapple Law can help
Should you take voluntary redundancy?
Ask yourself:
Is my job likely to go anyway? If compulsory redundancies are coming, volunteering may get you a better package than waiting.
How quickly could I find work? Think about your skills, your local job market and how long the money would last.
What would I give up? Leaving means losing your accrued rights, such as your unfair dismissal protection and any service-based benefits.
Is the offer fair? Compare it with what you'd get if made redundant compulsorily, and with what others have been offered.
Don't let anyone rush you. A tight deadline is often a pressure tactic, and you can ask for more time.
How to negotiate a better voluntary redundancy deal
1. Ask for the full figures in writing. How the payment is worked out, your leaving date and what happens to notice, holiday and bonus.
2. Check your contract and company handbook. Look for an enhanced redundancy scheme and try to find out whether there has been a past pattern of better payouts.
3. Work out your leverage. Do you have a grievance, a discrimination complaint, or concerns about how the process has been run? These can all strengthen your hand.
4. Make a counter-offer. Ask for more money, a later leaving date, garden leave, a better reference or help with outplacement. Keep it polite and in writing.
5. Mind your timing. Get the deal agreed and signed before you leave, not after.
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How Grapple Law can help
Grapple Law is a legal AI. It helps you check whether your voluntary redundancy package gives you everything you're owed, and where you may have room to push for more.
It can then help you write your counter-offer and negotiate with your employer.
Using Grapple Law is free to start, with a choice of legal services at a fraction of the cost of a traditional solicitor.
FAQs
Voluntary Redundancy Questions
All your questions, answered.
