Voluntary redundancy

An employer may ask for volunteers first to avoid making compulsory redundancies. There is no obligation to ask for volunteers, and failing to take this step will not make compulsory redundancies unfair (Rogers and others v Vosper Thornycroft [1989] IRLR 82).

For an unusual example of a successful unfair dismissal claim involving voluntary redundancy, see Stephenson College v Jackson [2013] UKEAT 0045/13/0507. In this case, the dismissal was found to be unfair because the employer rejected a request by an employee for voluntary redundancy and instead made his colleague redundant, even though there was just one point’s difference between the scores of the two employees. The employee whose request for voluntary redundancy had been rejected had already made it clear to management that he wanted to leave, management could not explain why his request had been turned down, and the one point difference related to a selection criterion of little importance to the employer. The tribunal concluded that no reasonable employer would have turned down the request for voluntary redundancy and made the claimant redundant.

There is no obligation to apply the selection procedure when accepting employees for voluntary redundancy.

An employer is not obliged to accept individuals who put themselves forward for voluntary redundancy.

Terms for voluntary redundancy are usually, but need not necessarily be, better than those for compulsory redundancy.

As long as there is a genuine redundancy situation when the employer invites volunteers, voluntary redundancies will be treated as dismissals in the same way as compulsory redundancies. However, someone choosing to take voluntary retirement should take care. For example, in Birch & another v University of Liverpool [1985] IRLR 165, the Court of Appeal held that employees accepting early retirement in the face of a threat of compulsory redundancy had terminated their contracts by mutual consent.

Where employees volunteer for redundancies, representatives need to be sure that they are not volunteering just because they believe they will not get a fair chance at available jobs due to discrimination. In Derby Specialist Fabrication v Burton [2001] IRLR 69, the EAT held that an employee who had chosen to volunteer for redundancy for that reason could claim constructive discriminatory dismissal.