Companies with employees protected by unions can often find it difficult to layoff employees. In recent years, offering compensation packages for employees that voluntarily make themselves redundant has become more popular and more regulated in the United Kingdom.
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The compensation for voluntary redundancy is typically calculated based on the employee's service to the company. In the U.K., a statutory minimum has been established as a half week's pay for every year worked under the age of 22, plus a full week's pay for every year worked from age 22 to age 41, plus one and a half week's pay for every year worked from age 41 onwards.
In 2009, the maximum weekly salary for calculating redundancy was set to £380.00. However, firms in financial crises will often offer packages with higher compensations than these minimum requirements.
If a business is transferred to a new employer, the employer assumes all of the employment contracts and collective agreements of the employees. In addition, redundancy is still calculated from the time the employee began working for the business, not from the point of transferal.
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