Under voluntary redundancy the employer collectively informs the department or entire staff of its intentions or need to make redundancies and initially leaves the option open for staff to volunteer for redundancy.
This could be far more costly to the employer as longer serving staff often take advantage of generous redundancy payments, but it often avoids a collapse in morale among remaining staff and prevents the company from being dragged into disruptive and expensive legal action.
The company has to carefully consider its needs and the value of employees wanting to take up the offer. The process often involves offering voluntary redundancy to all staff, so the employer needs to introduce certain checks to protect the ongoing business.
For instance, if the entire marketing team was offered voluntary redundancy, but only the managers and senior employees took the option, the company would be faced with the prospect of being left with an inexperienced team.
It is also important to understand that voluntary redundancy is only an offer and the employer is under no legal obligation to accept it. Neither does it have to justify the criteria for offering voluntary redundancy.
Voluntary redundancy offers are usually accepted by the company, but the eventual outcome will depend on the employer's assessment of needs and resources.
Redundancy packages can cost companies a lot of money, but the effect of redundancy can ruin a company's image and the morale of remaining staff, so most companies are eager to appease those being laid off.
Voluntary redundancy packages are usually far more generous than the statutory redundancy package.
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