Voluntary Redundancy definition
Voluntary redundancy occurs when employees volunteer for redundancy rather than the employer forcing certain individuals to leave. For the employer, there are several advantages, including avoidance of unpleasant decisions and the resulting emotional fallout, a more straightforward and peaceful consultation period and in some cases it allows them to circumvent statutory employment law provisions.
It’s important to note, however, that VR is rarely offered to all employees and will typically be used by the company to alter the structure of the organisation while gaining the benefits outlined above. For example, a company may wish to boost the number of young people coming into an organisation and may therefore offer voluntary redundancy to workers aged between 45 and 55.
Research suggests that some workers who leave voluntarily may return to the organisation later in different circumstances, suggesting other reasons may be behind their decision other than lack of job satisfaction.
In order to encourage employees, organisations will incentivise voluntary redundancy financially with severance packages. These will typically be higher packages offered for forced redundancies. Employers do not have to accept applications for redundancy and can reject the application if, for example, the employee is considered too good to lose. However the process must be fair, transparent and objective to protect the organisation in the event of an employment tribunal.