According to the latest CIPD Labour Market Outlook, 23% of employers were planning to make redundancies in the three months up to October 2025. Redundancies can come in different forms, one of which is voluntary redundancy.

My client has an online clothing business which has been struggling with a drop in orders. To cut costs, they propose to reduce the number of customer service roles, which will mean losing a couple of staff members. They want to avoid animosity developing among the team. One way they have identified of doing this is to ask for volunteers for redundancy. What advice can I give them about voluntary redundancies, and what will they need to watch out for? 

Voluntary redundancy is one way to identify those in the business who might be wanting to leave anyway. In doing this, employers can achieve two things at once: remove a potentially less committed employee from the organisation, and reduce the overall headcount, in line with their goal.

Voluntary redundancy may sound like a more straightforward option than compulsory redundancies – the employees are, after all, choosing to leave of their volition.

However, they are still dismissals and when redundancies are happening to get the organisation out of a difficult financial situation, the last thing employers should do is risk the organisation’s stability by leaving itself open to an unfair dismissal claim.

Below, we set out what employers need to think about before offering voluntary redundancy.

1. It must be a genuine redundancy situation

This may sound obvious, however a common misconception with voluntary redundancy is that it does not need the same justification as a compulsory redundancy. This is not true. Voluntary redundancy is still a dismissal in law, and there is still a risk of an unfair dismissal claim if there isn’t a genuine redundancy situation as per the Employment Rights Act 1996. Under that Act, a redundancy situation arises when:

• the employer ceases to carry on the business in which the employee was employed;
• the employer ceases to carry on that business in the place where the employee was employed;
• the needs of the business for employees to carry out work of a particular kind cease or diminish;
• the needs of the business for employees to carry out work of a particular kind in the place where the employee was employed cease or diminish.

Your client needs to have sound justification for making employees redundant. Creating a business case setting out the reasoning behind the redundancy proposal can help in setting out that justification. 

2. A process must still be followed

Even though the employee is volunteering, proper process should still be followed. Your client cannot simply approach certain staff members to discuss voluntary redundancy; it needs to be offered as part of the overall redundancy consultation.

This means meeting with all affected employees and outlining the possibility of redundancies.

All the employees doing the same or similar work should be placed at risk of redundancy and invited to bring their ideas and thoughts on the proposal to an individual consultation meeting. At the same time, the employer can put forward the idea of voluntary redundancy and invite those interested to come forward.

3. Be careful not to lose the best staff

Employers may have certain individuals within the team who they would struggle without, due to their skills and expertise. They should make it clear they will not necessarily accept everyone who volunteers; they don’t want to lose their best people.

Whilst this may disappoint those who have volunteered, it does present an opportunity to focus retention efforts on them, as clearly, all is not well in terms of their commitment to the business, and they may be looking to move elsewhere at some point soon anyway. 

Any decision to decline a volunteer for redundancy needs to be reasonable, and fair. The employer should therefore be able to provide objective reasons why a particular employee has been told no.

By Stacie Cheadle, technical writer, Croner-i

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