See also: guidance on voluntary severance procedures
In certain circumstances, Voluntary Severance Pay may be offered. In such cases, Voluntary Severance pay is paid instead of Statutory Redundancy Pay (SRP), and includes within it any entitlement to SRP.
Unlike SRP, voluntary severance pay is based on the actual amount of a week's basic pay for the employee, and the number of weeks' Voluntary Severance Pay to which an employee is eligible is determined using locally-agreed multipliers using the same age bands as the statutory redundancy pay scheme. For details see the table below.
Where a period of service spans more than one age band, the payment will be determined using a separate calculation for the service falling in each of the relevant age bands.
Methodology for calculating statutory and voluntary severance payments
| Condition |
Statutory redundancy |
Voluntary severance |
| Qualifying service |
2 years of continuous service |
1 year of continuous service |
| Weekly pay |
Capped, and annually reviewed.
For the current rate for SRP, use the government calculator
|
No limit (use actual week’s pay, basic salary only) |
|
Payment for each full year of service, where the employee’s age was:
|
under 22 |
0.5 of a week’s pay |
*0.88 of a week’s pay |
| 22-40 |
1 week’s pay |
*1.75 weeks’ pay |
| 41 and over |
1.5 weeks’ pay |
*2.63 weeks’ pay |
| Maximum number of years’ service |
20 |
20 |
| Maximum number of weeks’ pay |
30 |
52.6 |
*Note
Statutory redundancy pay is based on the employee’s age and length of service. Government guidance issued following the introduction of the Employment Equality (Age) Regulations 2006 confirmed that this approach is objectively justified and therefore lawful. Employers are therefore permitted to base voluntary severance payments on SRP calculations and to apply a locally determined multiplier.
