This guide is maintained as a current resource for September 2026 and covers only the laws of England and Wales. Information is for general guidance, not legal advice. Consult a qualified solicitor for advice specific to your situation.
Learn what voluntary redundancy means in UK employment law, how it works in redundancy processes, employee rights to redundancy pay and notice, employer duties, consultation requirements, and key practical steps for employees and employers when considering voluntary redundancy.
Voluntary redundancy is a form of job termination that occurs when an employee chooses to be made redundant during a redundancy process, often in return for a financial or benefits package. It differs from compulsory redundancy because the employee offers to leave rather than being selected by the employer. However, under UK law it remains a dismissal by reason of redundancy, not a resignation, and carries many of the same legal implications and rights as compulsory redundancy. This article explains how voluntary redundancy works, the legal framework, employee rights, employer duties, typical processes, and common questions.
What Is Voluntary Redundancy?
Voluntary redundancy arises when:
- An employer invites employees to volunteer to be made redundant; or
- An employee offers to be made redundant as part of a broader redundancy exercise.
It may be offered when a business needs to reduce headcount, restructure, or cut costs, and inviting volunteers can help reduce the need for compulsory redundancies. Even though it is “voluntary”, the legal framework for redundancy still applies: where eligible, employees retain redundancy and notice rights.
How Voluntary Redundancy Fits Into UK Redundancy Law
Under the Employment Rights Act 1996, redundancy arises when a role is no longer required due to business closure, workplace closure, relocation, or reduced need for work of a particular kind. A voluntary redundancy programme must be linked to a genuine redundancy situation; it cannot be used as a pretext to dismiss someone for another reason.
Voluntary redundancy is not a distinct legal category in statute, but it is widely recognised in practice as a component of the standard redundancy process. Even if you volunteer, you are dismissed for redundancy under the Act, with all the associated legal protections and claims available.
How Voluntary Redundancy Works
Employer Initiation and Employee Offers
Employers may decide to invite volunteers as part of a redundancy exercise. They may advertise a voluntary redundancy scheme and set criteria and deadlines for expressions of interest. Employees can also offer to be voluntarily redundant, usually in writing and in line with the employer's procedure if one exists.
There is no legal obligation on an employer to offer voluntary redundancy, and they are under no duty to accept all volunteers even if you put yourself forward. Employers may decline applications based on business requirements - for example, if you have skills critical to operations.
Voluntary Redundancy Offers and Selection
When employees volunteer, employers often face more volunteers than roles that can be removed. In such cases, employers should apply objective and non‑discriminatory criteria to decide whom to accept, such as years of service or role similarity. A failure to do this fairly can risk discrimination or unfair dismissal claims even in a voluntary context.
Redundancy Still a Dismissal
Voluntary redundancy is still a dismissal by reason of redundancy under the Employment Rights Act 1996. This classification means employees retain statutory rights to redundancy pay and notice (where eligible) and can make claims if legal obligations are not met. It is not the same as resigning and does not automatically remove statutory protections.
Employee Rights in Voluntary Redundancy
Statutory Redundancy Pay
Employees with at least two years' continuous service usually qualify for statutory redundancy pay, including when the dismissal is voluntary. This pay is calculated based on age, years of service and weekly pay, up to statutory limits. Some employers enhance this package as an incentive.
Notice Periods
Even in voluntary redundancy situations, employees are entitled to appropriate notice - either statutory minimum or a longer contractual notice period if specified in the contract. Employers may agree to pay in lieu of notice or to negotiate notice terms.
Consultation and Process Rights
The ordinary redundancy process applies to voluntary redundancy. This includes meaningful consultation about the decision, its terms, any alternatives and the justification for redundancy. Where 20 or more redundancies are proposed at one establishment within 90 days, collective consultation obligations apply and volunteers count toward the total.
Non‑Discrimination and Fair Treatment
Employers must ensure the voluntary redundancy process is non‑discriminatory. Decisions on volunteering and selection should not be influenced by protected characteristics such as age, sex, disability or others under the Equality Act 2010. If an employer offers or accepts volunteers unfairly, this could give rise to discrimination claims.
Consultation When Volunteers Exceed Needs
If more employees volunteer than can be accepted, employers should consult individuals on how decisions on acceptance are made and provide reasons for selection. This transparency helps reduce legal risk and demonstrates a fair process.
Employer Duties When Offering Voluntary Redundancy
Employers who opt to offer voluntary redundancy must ensure that:
- There is a genuine redundancy situation consistent with statutory definitions.
- The redundancy process remains fair and compliant with legal consultation requirements.
- Selection for acceptance of volunteer applications is based on objective criteria and free from discrimination.
- Statutory consultation duties are met, including collective consultation if applicable.
- All statutory rights are respected, including redundancy pay, notice and time off where relevant.
Even though employees volunteer, employers must still provide the usual consultation opportunities, explaining the rationale for redundancy and discussing alternatives where possible.
Risks and Legal Considerations
Unfair Dismissal
Even though employees volunteer, if the redundancy process is not handled fairly, qualifying employees could bring an unfair dismissal claim to an employment tribunal. For example, if the employer misrepresents the redundancy situation or applies biased criteria, this may be unlawful.
Discrimination Claims
If voluntary redundancy is offered or accepted in a manner that disproportionately affects a protected group, or if employees are discouraged from volunteering due to protected characteristics, this could give rise to discrimination claims under the Equality Act 2010.
Misclassification and Conditional Offers
Employers sometimes misuse the term “voluntary” to describe exit packages that are effectively mutual termination agreements, which can alter legal rights. Careful wording and proper legal advice are essential.
Practical Steps for Employees
- Review your contract and policy to understand redundancy and voluntary redundancy procedures.
- Get offers and terms in writing, including details of any enhanced package or notice terms.
- Check your continuous service to confirm redundancy entitlement.
- Participate in consultation, asking questions about acceptance criteria and alternative options.
- Seek advice from ACAS, Citizens Advice or a solicitor if the process seems unfair or discriminatory.
Practical Steps for Employers
- Establish a clear business rationale for needing redundancy.
- Design a transparent volunteer scheme with objective criteria and documented terms.
- Follow the statutory redundancy process, including consultation and notice.
- Ensure compliance with collective consultation rules where large numbers are involved.
- Communicate clearly with employees about rights and how decisions will be made.
Common Questions
Is voluntary redundancy the same as quitting?
No. Voluntary redundancy is a dismissal by reason of redundancy under the Employment Rights Act 1996. This means employees retain statutory rights to redundancy pay and notice.
Can an employer refuse my offer to volunteer?
Yes. Employers are not obligated to accept every volunteer, especially if retaining specific skills or workforce balance is essential.
Do voluntary redundancies count toward collective consultation?
Yes. When calculating the number of proposed redundancies for collective consultation thresholds, voluntary redundancies are included.
Key Takeaways
Voluntary redundancy offers employees an option to leave with a redundancy package when their role is genuinely surplus to business needs. Although it is employee‑initiated, it remains a dismissal by reason of redundancy under UK law and attracts the same statutory protections as compulsory redundancy, including redundancy pay, notice and consultation rights. Employers must ensure the process is fair, objective and non‑discriminatory, and both parties should understand their rights and obligations during the process.
