If I accept an offer of a voluntary severance, which includes the waiving of some or all of the notice of termination period, what are the implications?

If you are dismissed due to redundancy, you are entitled to be paid for the full amount of your notice, as well as any redundancy payment you qualify for. 

So if you accept an offer of voluntary severance which involves you being required to leave immediately, you should make sure your employer agrees to pay you a sum equal to your notice pay, on top of your severance payment, so that you don't lose out. 

‘Severance’ is not a legal word, but employers usually give it the same meaning as ‘redundancy’.  

In addition, you must be paid for any holiday that you have earned but not taken by your leaving date. 

Tax and national insurance must be deducted from all notice pay, and payments in lieu of notice and holiday pay, because they are all ‘wages’. 

Make sure you are clear as to the final date of your employment under any voluntary severance arrangement. This date is called the 'effective date of termination'. It is very important, especially if you are thinking about any sort of tribunal claim. 

FinallyHowever, bear in mind that if you accept an offer of voluntary severance, an employment tribunal is unlikely to accept that you were ‘dismissed’ from your job, so if you are considering a tribunal claim, take advice from a union rep or your legal advisor. 

Accepting a voluntary severance payment is likely to impact on your ability to claim state benefits, so take care.  

Accepting voluntary severance may also limit your ability to claim under any income protection policies you hold, for example in relation to credit card debt, or your mortgage. 

Note: This content is provided as general background information and should not be taken as legal advice or financial advice for your particular situation. Make sure to get individual advice on your case from your union, a source on our free help page or an independent financial advisor before taking any action.

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