Expression of Interest for Voluntary Redundancy in the UK

Inviting expressions of interest (EOIs) for voluntary redundancy can be a constructive way to manage change without rushing into compulsory redundancies. When it’s done well, it reduces disruption, preserves morale and helps you reshape your team for the future.

But it’s still a redundancy process under UK law - so you’ll need to consult properly, avoid discriminatory criteria, handle data carefully and make the right payments. In other words, it’s not just a quick email to staff. A clear, compliant process will protect your business and your people.

Below, we walk through what an expression of interest for voluntary redundancy actually involves, the legal rules you must follow, and a step-by-step approach you can adopt in a small business.

What Is An Expression Of Interest For Voluntary Redundancy?

An expression of interest for voluntary redundancy is an invitation to eligible employees to put their hand up to leave on agreed terms as part of a proposed restructure or reduction in roles. It’s not an offer or a binding agreement. Think of it as an information-gathering stage to explore who might be willing to exit, and on what basis, before you decide next steps.

Key points to understand:

• It’s voluntary. You cannot pressure employees to apply. An EOI is an invitation, not a requirement.
• It’s exploratory. You’re collecting names, interest and sometimes specific terms staff would want to consider.
• It doesn’t remove your obligations. Even if you go “voluntary first”, you still need fair selection, proper consultation and lawful payments if redundancies proceed.
• It can reduce compulsory redundancies. If a volunteer’s departure achieves the business objective, you may not need to dismiss another employee.

Many small employers use EOIs when they’re not sure who might be open to voluntary exit, want to preserve skills in critical areas, or wish to minimise the risk of unfair dismissal claims by offering a fair and transparent path to exit.

When Should You Invite EOIs - And What Are The Risks?

Consider inviting EOIs when you have a genuine redundancy situation: you’re closing the business or a location, modernising systems that reduce the need for certain roles, or you need to cut costs and reconfigure teams. Genuine redundancies are about the role no longer being required - not performance or conduct issues.

Benefits of inviting EOIs include:

• Reducing the need for compulsory redundancies
• Identifying volunteers whose exit has least impact on operations
• Improving employee relations by giving people options
• Potentially agreeing a shorter timeline with volunteers

However, there are risks to manage:

• Loss of key talent if your best people volunteer - your process should allow you to refuse an expression where it would harm the business.
• Perception of targeting. Avoid any suggestion you’re steering older, disabled, pregnant or otherwise protected employees toward exit.
• Creating binding promises. Be clear that an expression of interest is not an offer of redundancy and the business retains discretion.
• Data privacy concerns. Limit sensitive information collected and handle it in line with UK GDPR and the Data Protection Act 2018.

If you want clear, businesswide rules to guide how and when you use EOIs, it’s smart to set them out in a straightforward policy within your Staff Handbook or as a standalone Workplace Policy.

The Legal Ground Rules In The UK

Even where you invite volunteers, the core legal framework for redundancies still applies.

Genuine Redundancy

A redundancy must be genuine: the role is no longer needed, the workplace is closing, or the work has diminished. Redundancy is not a substitute for addressing capability or conduct issues. The Employment Rights Act 1996 sets out when a redundancy dismissal can be fair; your process needs to align with those principles.

Consultation And Selection

Consultation should be meaningful - explain the rationale, consider alternatives, and take feedback seriously. If you’re proposing 20 or more redundancies within 90 days at one establishment, collective consultation obligations under the Trade Union and Labour Relations (Consolidation) Act 1992 apply (including minimum consultation periods and HR1 notification to the Secretary of State). Many small employers won’t hit those thresholds, but you must still consult fairly.

Selection criteria must be objective and non-discriminatory. Avoid criteria that, directly or indirectly, disadvantage protected groups under the Equality Act 2010 (for example, selecting by part-time status could indirectly discriminate against women). Document your criteria and how you’ll apply them if you need to move to compulsory selection.

Voluntary Redundancy Is Not Automatic

You don’t have to accept every volunteer. You can refuse EOIs where a volunteer’s role is critical, where their departure won’t achieve the restructure, or where costs or risks are disproportionate. Say this expressly in your EOI invitation.

Payments And Notice

Volunteers who are dismissed by reason of redundancy are generally entitled to statutory redundancy pay (if they meet the 2-year service requirement), notice (or pay in lieu), and accrued but untaken holiday pay. Where you’re offering additional amounts beyond the statutory minimums, those are often described as enhanced redundancy pay. If you negotiate terms with a volunteer, it’s common to document the final deal in a settlement agreement (more on this below).

Data Protection

During an EOI process, you’ll handle sensitive employee information. You must process data lawfully, transparently and securely under UK GDPR. Limit the data you collect, restrict access on a need-to-know basis, and set retention periods. Our guide on how long to keep ex-employee records is a useful reference once the process is finished.

A Step-By-Step Process To Run EOIs Lawfully

Here’s a practical, small-business-friendly approach that helps you invite expressions of interest while staying compliant.

1) Build The Business Case

Document the rationale for change: financial drivers, operational changes, or technology shifts. Clarify which roles or functions are potentially impacted and why. This business case underpins meaningful consultation and shows the redundancy is genuine.

2) Plan Your EOI Framework

Define eligibility (e.g. which teams or roles can volunteer), timeframes (open and close dates for EOIs), and decision criteria (what factors you’ll weigh to accept or refuse volunteers). Note any caps (e.g. maximum volunteers per function) to maintain operational capability.

Decide what you’ll offer volunteers in principle. Many employers set out a baseline offer (statutory redundancy plus X weeks’ enhancement), subject to final agreement. If you’ll consider different terms case-by-case, say so.

3) Prepare Clear Communications

Draft an EOI invitation that is open, fair and unambiguous. It should:

• Explain the business rationale and proposed change
• Confirm this is an invitation for expressions of interest only
• State eligibility and the window for submitting interest
• Outline the proposed terms framework (e.g. minimum payments, treatment of notice/holiday)
• Reserve your discretion to accept or decline EOIs
• Explain how personal data will be used, and who will have access
• Give a contact for questions and support

Where you have a recognised union or employee representatives, coordinate your messaging and timelines to ensure consultation remains genuine.

4) Invite EOIs And Consult

Issue the EOI invitation in writing, hold briefing meetings, and allow questions. Keep the tone supportive. Make sure managers know not to steer particular employees toward volunteering - any hint of pressure can undermine the process and lead to claims.

Run a parallel consultation to explore alternatives to redundancies: redeployment, reduced overtime, job sharing or natural attrition. If alternatives emerge, document them and consider them in good faith.

5) Assess Volunteers Against Business Needs

When EOIs come in, assess each expression against your business case and operational needs. Questions to ask:

• If this person left, would the restructure goal be achieved?
• Would we lose critical skills that are hard to replace?
• Are there costs (e.g. long notice periods) that make this unviable?
• Does accepting this EOI help avoid compelling another employee to leave?

Document your reasoning. This helps if decisions are challenged later.

6) Make Provisional Offers (Or Decline) In Writing

For volunteers you wish to progress, issue a provisional offer subject to contract. Set out the headline terms: redundancy payment (statutory and any enhancement), notice (worked or pay in lieu), holiday pay, benefits treatment and proposed termination date. Make clear that the final arrangement will be documented in a settlement agreement and is subject to the employee receiving independent legal advice.

If you decline a volunteer, thank them for their interest and explain briefly (for example, their role is required to deliver a critical function). Keep it respectful and avoid detailed comparisons with other staff.

7) Document The Exit Properly

Most voluntary redundancy exits are documented via a settlement agreement that waives potential claims in exchange for agreed terms. In the UK, a valid settlement agreement requires the employee to take independent legal advice. It’s common to make a reasonable contribution to their legal fees to facilitate this.

If you are not using a settlement agreement, ensure the core terms are confirmed in writing and aligned with your contracts and policies. However, a settlement is generally the safer route for a clean break. Where appropriate, terms can also be recorded in a Deed of Settlement.

8) If Needed, Move To Fair Selection

If you still need to reduce headcount after the EOI round, you may need to move to selection for compulsory redundancy. Apply objective criteria, consult properly and follow a fair process. Our employer checklist on ending an employment contract fairly outlines the practical steps to reduce risk.

Payments, Notice And Documents To Prepare

Before you issue any provisional offers, tally the costs and prepare your paperwork. Here’s what to cover.

Statutory Redundancy Pay

Employees with at least 2 years’ continuous service are entitled to statutory redundancy pay based on age, length of service and weekly pay (capped at the statutory maximum). Volunteers dismissed for redundancy are generally entitled to the same statutory pay as those selected compulsorily.

Enhanced Redundancy Pay

Many small businesses offer an enhancement to encourage volunteers or recognise service. Be clear whether the enhancement is discretionary, how it’s calculated, and whether it’s conditional on signing a settlement agreement. If you have custom arrangements or a past pattern of payments, check whether they’ve become a contractual expectation through custom and practice.

To avoid misunderstandings, consider setting out a simple, fair formula and apply it consistently. If you’re unsure where an enhancement might apply or how it interacts with statutory rights, our guide on enhanced redundancy pay explains the common scenarios.

Notice And Holiday

Confirm whether volunteers will work their notice or receive pay in lieu. Check contract terms on PILON and garden leave, and remember to pay any accrued but untaken holiday. Clarify final pay dates, benefits cut-off, and return of company property.

Settlement Agreement

A settlement agreement is the standard way to finalise a voluntary redundancy on agreed terms and reduce the risk of future claims. It will usually:

• List payments (statutory and enhanced redundancy, notice or PILON, holiday, bonuses)
• Waive specified claims arising from employment and termination
• Reconfirm confidentiality, IP and post-termination obligations
• Include warranties (e.g. return of property, no new claims)
• Offer a contribution to the employee’s legal fees

When you’re weighing up your options, it can help to understand the difference between severance vs redundancy in the UK context, as these terms are often used interchangeably but carry different legal meanings.

Internal Records And Policies

Update internal records to reflect final payments, termination dates and reasons. After exits, review whether contracts and policies need updates (for example, tightening your redundancy or consultation policy so the next process runs even smoother).

Data And Documents

Keep clear records of consultation notes, decision-making, offers and signed agreements. Set a retention schedule for redundancy files in line with your legitimate interests and statutory limitation periods, and cross-check with your approach to ex-employee records. Be prepared to handle subject access requests and keep your data handling consistent with your Privacy Policy.

Practical Communications

Plan how you’ll announce changes internally and, if relevant, to customers. Keep messaging respectful and focused on the business rationale. Provide signposts to support services (e.g. EAP or ACAS guidance). Treat departing volunteers with care - how you handle exits will be remembered by the team that stays.

Don’t Forget The Basics

It’s easy to get caught up in numbers and timelines and lose sight of the fundamentals. Make sure your employment documentation is in good shape (for example, current Employment Contracts that clearly set out notice and PILON provisions), and that managers understand their responsibilities under the Employment Rights Act 1996.

When To Get Advice

If your business is considering inviting EOIs, a short scoping chat can save you time and risk later. Tailored advice is especially valuable where you anticipate collective consultation, possible redeployment, or complex enhancements. You can also speak with us directly through our Redundancy Advice service if you want help designing or running the process.

Key Takeaways

• An expression of interest for voluntary redundancy is an invitation, not an offer. It helps you explore who may wish to leave before deciding on next steps.
• Even with volunteers, redundancy law still applies. Consult properly, apply objective criteria and avoid discriminatory practices under the Equality Act 2010.
• Set a clear framework: who’s eligible, how to apply, the window for EOIs, and your discretion to accept or decline based on business needs.
• Be transparent about terms. Volunteers typically receive statutory redundancy pay, notice (or PILON) and holiday pay - with any enhanced redundancy pay set out clearly.
• Use a settlement agreement for a clean, low-risk exit and make a reasonable contribution to independent legal advice. A tailored Deed of Settlement can also be used where appropriate.
• Handle data lawfully. Limit what you collect, restrict access and set retention periods consistent with GDPR retention guidance.
• If EOIs don’t achieve the change, move to a fair selection process and follow best practice on ending employment fairly.

If you’d like help designing an expression of interest for voluntary redundancy or you want us to prepare the documents and scripts you’ll need, you can reach us on 08081347754 or team@sprintlaw.co.uk for a free, no-obligations chat.