We receive many calls from clients who are considering taking voluntary redundancy from their employment. This post deals with some of the important questions that we are often asked.
What Is The Difference Between Voluntary Redundancy And Compulsory Redundancy?
When an Employer is considering reducing their staff numbers through a restructure or similar, it is good practice to invite employees to volunteer for redundancy before starting the process to choose staff through a compulsory redundancy.
As the name suggests, in a voluntary redundancy, you are putting yourself forward to leave. A voluntary redundancy will usually start with you indicating to your employer that you want to be made redundant. Often, you will have to submit some kind of application expressing your interest in being made voluntarily redundant
In comparison, a compulsory redundancy will usually occur after the employer has gone through some kind of selection process. If you are selected, then your employment will be terminated by your employer by reason of redundancy. This is not something that you have asked for (unlike voluntary redundancy). This is something which has been the decision of your employer. For more information about compulsory redundancy and redundancy consultation, please see our website at https://lincslaw.co.uk/services/employees/resignation-dismissal-and-redundancy/redundancy/
Why Would I Volunteer To Be Made Redundant?
This is really a personal decision and dependent upon your circumstances. Some people may be thinking of leaving in any event. Some might see this as an opportunity to move into something different. Others may be very unhappy at work and want redundancy as a way to end an unpleasant situation.
Following on from the above, usually when employers are offering a voluntary redundancy package, they will be offering enhanced payments. This, of course, makes sense. If they can reduce staffing numbers without going through a compulsory process, this saves them time, saves the employees who are staying anxiety and stress and, of course, it reduces their litigation risks. In exchange, the compensatory payments available for voluntary redundancy are usually more generous than payments which would be paid in a compulsory redundancy process.
Do I Have To Sign A Settlement Agreement For Voluntary Redundancy?
Very often, as part of the “deal” to receive the enhanced voluntary redundancy payments, you will be required to sign a document called a Settlement Agreement. A Settlement Agreement is a contract under which you will waive and settle all of your employment rights and claims and agree the termination of your employment. In exchange, you are receiving the enhanced payment which would not have been available to you had you been made compulsory redundant.
Obviously, it is entirely a matter for you whether or not you wish to sign a Settlement Agreement. However, receiving your voluntary redundancy payments will usually be conditional upon you doing so. For more information about Settlement Agreements, please see our website at https://lincslaw.co.uk/services/settlement-agreement/
If I Have Volunteered For Redundancy, Can I Still Pursue An Employment Tribunal Claim?
As indicated above, if as part of your voluntary redundancy package you have signed a Settlement Agreement, the answer is likely to be no. The simple fact of signing a Settlement Agreement will mean that you will have waived and settled all of your employment rights and claims.
Even if you have not signed a Settlement Agreement, the fact you decided to volunteer for redundancy would make it extremely unlikely you would have a claim which related to your dismissal. To explain, the reason your employment would terminate would be because you volunteered for redundancy. Such circumstances would not give rise to a claim of unfair dismissal before the Employment Tribunal. Also, given this would have been a voluntary process, it is unlikely there would be claims available for discrimination relating to the termination of employment.
If your intention is to pursue an Employment Tribunal claim against your employer, then you should think long and hard before volunteering for redundancy. There may be very specific circumstances in which you could bring a claim, but those would be the exception rather than the rule. The rule being that having volunteered to leave your employment, it is unlikely that a claim will be available as a result of your employers accepting your voluntary redundancy application.
Can I Renegotiate My Voluntary Redundancy Package?
Obviously, this is a difficult question to answer. Whether there is some possibility for renegotiation will very much depend upon the package being offered. When we are assessing these matters with our clients, we first go through the hypothetical situation to set out their financial position in the event they did not accept the voluntary redundancy package. We would then compare that financial position to the offer being made so our clients are clear about what payments they will receive as a consequence of volunteering for redundancy.
In the above, we also take into account “soft benefits”. For example, whether an employee is made redundant voluntarily or compulsorily, that employee will be entitled to their notice pay. With a compulsory redundant employee, the Employer might decide that they want that employee to work and serve their notice. However, as part of a voluntary redundancy package, they may agree to make a payment to the employee as a lump sum in lieu so they will not have to work their notice period. Alternatively, they may also offer garden leave which means, of course, that the employee remains employment during their notice period but, again, is not required to work.
We also discuss some of the other terms likely to be involved in a voluntary redundancy package. For example, you may have restrictive covenants in your Contract of Employment which, as part of the voluntary redundancy package, you would like to see waived altogether or amended to put you in a better position. Also, with Share Schemes and Long Term Incentive Plans, you may also be seeking a benefit as a “good leaver” or similar.
Therefore, in answer to this question, it is possible to seek to renegotiate your voluntary redundancy package. However, before doing so, it is essential that you are clear about the benefits being offered under your package and then what it is specifically that you are wishing to negotiate for.
What Happens If I Do Not Accept Voluntary Redundancy?
As the name suggests, voluntary redundancy is voluntary. If you change your mind during the process and would prefer not to be made voluntarily redundant, then you will need to notify your employer.
You do, of course, need to consider the consequences of your decision. For example, in rejecting voluntary redundancy, you may find that as a result of a compulsory redundancy process you are made redundant in any event. Equally, the opposite could happen. You could withdraw from voluntary redundancy only to find that the Company decide to keep you as they have achieved necessary reductions elsewhere.
Again, you can withdraw from the voluntary redundancy process, but it is important that you consider the possible consequences of doing so before taking such a step.
Lincs Law Employment Solicitors Can Help You
If your employer is inviting voluntary redundancies and you are unsure whether to put yourself forward, please contact us for a free enquiry and one of our team would be very happy to help. Call us on 01522 440512. Alternatively, for more information about redundancy generally, please see our website at https://lincslaw.co.uk/services/employees/resignation-dismissal-and-redundancy/redundancy/
Sally Hubbard, Specialist Employment Solicitor
Lincs Law Employment Solicitors
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