Does accepting voluntary redundancy prevent that employee from claiming unfair dismissal?

This is an interesting question. I have no doubt that many employers will view voluntary redundancy situations as automatically fair dismissals or perhaps even take the view that voluntary redundancy means that the employee cannot sue at all. The reality is different.

Consider this recent case involving a part-time receptionist at a care home with 300 homes across the UK. The company decided to reduce its administration and reception functions in a number of care homes. One particular employee was selected as being at risk of redundancy. She claimed that she had not been offered a suitable alternative role and that another employee had been recruited externally and appointed to a full-time reception role during the redundancy exercise. She claimed that against these circumstances she had no choice but to request and accept voluntary redundancy. So, this still was her informed choice wasn’t it?

This employee submitted a claim of unfair dismissal (unfair selection for redundancy) to an Employment Tribunal. The Tribunal struck out her claim on the basis that it had no reasonable prospect of success because she had accepted voluntary redundancy and the employer would be consequently able to show the reason and the reasonableness of the decision.

The Employment Appeal Tribunal disagreed with this simplistic reasoning. The reason for the dismissal was in fact an issue as between the parties and the Tribunal had erroneously concluded that accepting voluntary redundancy automatically precluded an unfair dismissal claim. Here is the law! Section 98(4)(a) of the Employment Rights Act 1996 says that the burden of establishing whether or not a dismissal is reasonable and a sufficient reason for dismissal rests with the employer. Section 139 (b) sets out what a redundancy situation is: the requirements for work or a particular kind have ceased or diminished or are expected to cease or diminish. These fundamentals, which rest with the employer to prove, still prevail even in cases of voluntary redundancy. Volunteers for redundancy to not agree to terminate their contracts. Rather, they agree to be being dismissed for redundancy. This means that employers retain the burden to show the fairness and reasonableness of that decision. Employers should keep in mind that whilst calling for volunteers for redundancy is a well known step in every redundancy process, the reality is that employees taking VR will not lose their employment law rights.

A practical hint! The circumstances of a request for voluntary redundancy are therefore relevant. Pressure cannot be brought to bear on employees. The redundancy process must be conducted in accordance with the legal framework. Thus, an aggrieved employee who has been ostensibly deprived of the right to apply for a new role, is seeking and taking voluntary redundancy in less than perfect circumstances. The only sensible route is to seek volunteers for redundancy at the preliminary stage of any redundancy process and before the substantive exercise has commenced. Otherwise, the only mechanism to provide employers with litigation certainty, is a settlement agreement.


The Home Office has issued changes to the immigration rules and an explanatory memorandum. This implements the government’s proposals in the ‘Build Back Better – our plan for growth’ originally issued by HM Treasury on 3rd March 2021.

The Statement of Changes introduces new visa routes into the UK including the Global Business Mobility, High Potential Individual and Scale-up routes. There are five Global Business routes which must all be sponsored and do not lead to settlement (Senior of Specialist Worker, Graduate Trainee, UK Expansion Worker, Service Supplier and Secondment Worker). The High Potential Individual route is an elite points based route. Scale-up applies to those with job offers from qualifying companies and allows the holder to stay beyond 6 months. Again, points and salary dictate eligibility. Employers should consider whether they have the required sponsor licenses in place. This route will lead to settlement. Statement of changes to the Immigration Rules: HC 1118, 15 March 2022 – GOV.UK (

The information contained in the above article was correct at the time of publication. To ensure you are kept up to date with changes to employment law matters, click here to sign up to our dedicated employment database.

Learn more about Rebecca

All the articles above are written by our Partner & Head of Employment Rebecca Dennis. Rebecca’s professional background is unique in that she worked for more than 20 years as a barrister providing legal advice, drafting and advocacy for her clients and more recently provided specialist trouble-shooting services on employment law and employee relations at a leading international HR outsourcing company.

What Rebecca doesn’t know about Employment Law really isn’t worth knowing.

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