What is voluntary redundancy?
As the pregnancy progresses and for the first six months following childbirth, the employer should also periodically review the worker’s risk assessment to see if there have been any significant changes to the worker’s activities or workplace and if so, take any necessary precautions to protect them.
Voluntary redundancy and what it means
Offering your employee(s) a just financial compensation, or incentive, to leave your company mutually, is a choice known as voluntary redundancy. If there is interest, you might be able to avoid making forced layoffs, but you should be aware that you might still need to pursue forced layoffs even if the offer of voluntary exits is accepted.
In contrast to voluntary redundancy, which depends on an employee voluntarily stepping up, involuntary redundancy involves a formal selection process to identify the roles and individuals at danger of redundancy.
The need to offer voluntary redundancy
Giving employees the option to retire on their own has a lot of potential advantages. By reducing the workforce on a voluntary basis, the organisation can save time and money by skipping the drawn-out consultation and hiring process. Making employee exits amicable might also be a preferable alternative to retaining good working relationships because employees get to decide how they want to leave the company. Adopting a more progressive attitude and making your staff feel comfortable, can aid in fostering strong relationships in the future and boosting workplace morale.
Given that the employee made their decision after consultation with their employer and is leaving voluntarily, voluntary redundancy also lowers the possibility of legal claims.
Offering voluntary redundancy rules
You must follow the right procedure if you are offering voluntary redundancy.
Start by communicating with qualified staff members to explain the situation and solicit volunteers. Being open and truthful about the challenges you are now facing and the reasons behind your redundancy helps foster trust and stop rumors. The purpose of voluntary redundancy is to offer cash incentives to workers who agree to quit the company. This entails providing a reasonable benefits package that would appeal to employees.
A voluntary redundancy letter outlining the procedure and the voluntary redundancy package on offer should be given to those who indicate interest. The sum being offered to them, what will happen to any perks, bonuses, or commissions to which they are entitled, the specifics of their notice period, including whether it will be worked or PILON will apply, and what will happen to accrued annual leave must all be made clear.
When an employee is given the option to voluntarily quit an organisation, negotiations with them are typically part of the process.
The rights of those who choose voluntary redundancy are the same as those who choose forced redundancies; these rights include consultations and time off to look for new employment. Recording conversations and communications will be crucial throughout the process. This is useful if there are any complaints regarding the procedure in the future.
What is the voluntary redundancy package?
When creating a package, take into account things like:
- Statutory benefits, such as statutory redundancy pay, are due to employees who have worked for at least two years continuously.
- How much time the employee has to give notice
- their potential search time for a new job
- Statutory entitlements and contractual terms, any contractual benefits to which they are entitled, and any optional payments you are ready to make
The employee will be entitled to the following statutory redundancy pay for each complete year of employment with the company:
- half a week’s wages until the age of 22
- 22 to 40 years old: 1 week’s pay
- older than 41 years old: 1.5 weeks’ pay
The highest weekly salary is £544, and the maximum number of consecutive years of employment is 20.
Calculate the maximum settlement amount to which each employee is entitled using this information, and determine whether you can offer more as a financial incentive.
Practically speaking, offering a more substantial payout than the employee would otherwise be eligible for under obligatory redundancy is typical of voluntary redundancy. This will entice workers to accept the offer and enable the company to forgo the forced redundancy process. This could entail providing a salary for a whole year or simply six months. In order to allow for bargaining, the initial settlement offer is typically lower than the maximum sum. Keep in mind that the employee has the option to reject any offer of voluntary redundancy and not participate in the process.
Do employers take voluntary redundancy?
Employers are not required to accept requests for voluntary redundancy made by employees. The employer must approve the resignation. When a voluntary redundancy is offered, employees should be made aware of this.
The employer will need to take action to choose from the “pool” of volunteers if multiple employees have offered their services. To prevent legal concerns, every selection from the volunteer pool will have to adhere to a fair procedure.
Applications should be evaluated in this way based on factors like their role, talents, attendance, and disciplinary history. Additionally, it prevents instances where valuable workers who the business would like to keep on board volunteer.
You can advise any of your staff members who are getting near to retirement to opt for voluntary early retirement rather than voluntary redundancy. If this is suggested, a fair selection procedure should be used. The proposed retirement package should be outlined, together with any redundancy payouts and notification requirements.
Get advice on the voluntary redundancy process
The employment attorneys at Clarity Simplicity may assist with all facets of personnel management and planning, including layoffs, terminations, settlements, and contentious exits. Working closely with our HR experts, we provide thorough advice on the alternatives available to you as an employer and practical help during the redundancy process. We have specific expertise in challenging situations, such as managing redundancy while a mother is on maternity leave. Speak to our specialists for guidance and assistance with a particular problem.
FAQs on redundancy rights
If you accept voluntary redundancy, do you receive extra money?
The compensation package for voluntary redundancy will typically be negotiated and will be based on a number of factors, including length of service. The level of redundancy pay and any other benefits that should be a part of the exit package should be understood by both employers and employees.
Can an employer refuse a voluntary employee redundancy?
In fact, the employer is not required to accept the voluntary redundancy offer. The employee also has the option to reject the payout for voluntary redundancy.
How long is the notice period for voluntary redundancy?
Employees shall receive the appropriate amount of the applicable statutory minimum notice period, or, if longer, the amount to which they are entitled under their employment contract. The employer and employee may occasionally decide to accept payment in place of notice.