How to face an offer of voluntary redundancy

When you’ve worked hard to secure your position in a company it may seem crazy to consider giving it all up voluntarily. Yet that is exactly what is being asked of people when they are offered voluntary redundancy.

The plus side is that the offer will usually come with a financial incentive that is generous enough to make it attractive, often significantly more than is paid out for a forced redundancy. As its name implies you do not have to accept it, but there are good reasons for giving it some serious thought.

Rights and rewards

Agreeing to voluntary redundancy does not mean relinquishing your rights. Voluntary redundancy is treated as a dismissal, not a resignation, so you have the same legal rights as people going through compulsory redundancy:

• A notice period of up to 12 weeks, depending on how long you have worked for the company. You may also be entitled to time off for job hunting.
• The minimum amount you can be offered is the statutory rate. This varies according to your age and length of service and goes up to one and half week’s pay for each year served.
• There is no tax or National Insurance to pay on the first £30,000.

These are the basic entitlements. Voluntary redundancies normally have far more generous incentives to sweeten the pill.

Challenge of change

Even so the prospect of stepping back into the job market can be a scary one. It is natural to fear change, especially one that means risking your financial security and facing an uncertain future. In a buoyant job market a voluntary redundancy may be a great opportunity, a chance to gain a lump sum of cash simply by changing jobs. But in less certain times it is hard to weigh up the pros and cons objectively.

Thinking negatively is not the way to go. If you refuse the voluntary redundancy without considering the potential opportunities you might be throwing away the chance of a lifetime. That money could be the gateway to a new life, one in which you are able to do the things you’ve always dreamed of – changing career, starting your own business, going freelance or even paying off your mortgage.

Weigh up the options

Talk to your employer to see if there is room for negotiation. The offer on the table might not be the best available. If they think it will swing the deal they may agree to a higher payout or extras like outplacement services to help you on your new path.

When you’ve considered the risks and possibilities think of what it will be like to stay:

• Could there still be compulsory redundancies later on?
• Will you miss the colleagues who leave?
• Will this mean longer hours for those left behind?

Everything needs to be considered before you choose between job stability and the opportunity to make a risky yet exciting life change. There are no guarantees, so make your decision carefully and with an open mind. Your future is riding on it.