In this latest blog in our series on cost saving options for employers, the View HR team have compiled and set out our answers to the most commonly asked questions about the topic of voluntary redundancy.
Q – Do I always have to offer voluntary redundancy before starting to consult individually on possible compulsory redundancies?
A – No, you do not have to offer voluntary redundancy but it is worth considering the pros and cons before deciding which approach to take and why. Inviting employees to apply for voluntary redundancy can be cost and time effective as it can reduce consultation requirements, and can also be better for employee morale (equally the risk of discrimination must not be overlooked). However, it only tends to be suitable when you are seeking to partially reduce headcount in a specific area, rather than when closing a whole function, department or business.
Q – If I want to invite employees to apply for voluntary redundancy, do I have to offer it to the whole organisation?
A – No. If you run a restaurant with too many chefs but the right number of waiting staff, it would be acceptable to invite just the chefs to apply for voluntary redundancy, and not the waiting staff. However, you should have a business reason for selecting who to invite, as otherwise there is a risk of discrimination.
Q – Do I have to accept every application for voluntary redundancy?
A – No, but ensure your invitation for voluntary redundancy is clear of the business’s right to reject applications. All applications should be considered in the context of the needs of the business, and so if too many people apply, or if somebody with a particular skill set that you really need applies, you can decline them by setting out the business reasons. Take care in doing this though, as sometimes people will leave anyway later, as they had already gone through the process of making up their minds.
Remember, if you do accept an application for voluntary redundancy, it is good practice to consult with the employee on this to ensure that they fully understand and want to pursue this avenue.
Q – Do I have to pay more redundancy pay for voluntary redundancy?
A – There is no statutory obligation to do this, as statutory redundancy pay (SRP) applies to both voluntary and compulsory redundancy. However, your employment contracts or other binding documentation such as a collective agreement with a recognised trade union, may specify that you do have to pay more.
You can read more about cost saving options for employers here. If you are an employer and have questions about redundancy, voluntary or otherwise, please do not hesitate to get in touch with a member of the View HR team for an initial discussion.