Voluntary redundancy can offer a number of benefits to employers, including reducing costs, restructuring the workforce and improving morale. In some cases it can also help to avoid compulsory redundancies.

There are a number of things to consider before offering voluntary redundancy, such as the financial impact, the potential impact on morale and how it will affect your business. You will also need to consult with your employees before making any decisions.

What are the benefits of voluntary redundancy?

Voluntary redundancy can offer many benefits to employees, including a sense of control over their exit from a company, financial security, and the ability to pursue other opportunities. Additionally, voluntary redundancy can help prevent future compulsory redundancies by freeing up positions within a company.

When To Offer Voluntary Redundancy

There are a number of situations in which companies may offer voluntary redundancy to their employees. For example, if a company is downsizing or restructuring, it may offer voluntary redundancy in order to reduce its workforce. Additionally, if a company is relocating, it may offer voluntary redundancy to employees who do not wish to relocate with the company. Finally, a company may offer voluntary redundancy to employees who are at risk of being made redundant compulsorily.

What Are The Risks Of Voluntary Redundancy?

There are a few risks associated with voluntary redundancy, such as the loss of job security and income. Additionally, you may not be able to return to your former company at a later date if you take voluntary redundancy. Finally, voluntary redundancy may have a negative impact on your future employability.

How much voluntary redundancy should I offer?

This is a difficult question to answer, as it depends on many factors, such as the company's financial situation, the number of employees who have already expressed an interest in leaving, and the company's ability to continue operating without the affected employees.

Some things to consider are listed below:-

What are the potential consequences of offering too little voluntary redundancy?

If you offer too little voluntary redundancy, you may not be able to persuade enough employees to leave, which could put your company in a difficult financial situation and you may find yourself in a situation where you have to make compulsory redundancies anyway.

What are the potential consequences of offering too much voluntary redundancy?

If you offer too much voluntary redundancy,  you may get too many volunteers and will need to consider how you will decide which applications to accept. Also, those employees who do choose to stay may be resentful and less productive. This could damage employee morale and lead to high levels of absenteeism and turnover.

What other factors should I consider when making my decision?

Some other factors you may want to consider include the impact on customer service, the potential for industrial action, and the financial implications for your company. You should also bear in mind that once you have made your offer, it will be difficult to change it.

Conclusion

Offering voluntary redundancy can be a difficult decision, as there is no perfect solution. You need to weigh up the pros and cons of each option carefully before making a decision.

Article by

Marianne Wright

0800 915 7777

Our expert employment law solicitors all have many years’ experience advising individuals who are in your position. We will be able to guide you through the process and to help you secure the best possible outcome.

We offer a range of services, so please contact our friendly customer services team to discuss further via hello@kilgannonlaw.co.uk or 0800 915 7777.

Disclaimer 

The above provides a general overview relating to constructive dismissal and is not intended nor construed as providing specific legal advice. Constructive unfair dismissal is a complicated legal claim. An individual should take legal advice from an employment lawyer if they believe their employer has behaved in such a way that entitles the employee to resign and bring a claim for constructive unfair dismissal.

This article is for information purposes only and is correct at the time of publication. It does not constitute legal advice.

01.06.2023