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Voluntary redundancy agreement terms letter

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This template outlines the terms and conditions of a voluntary redundancy agreement, including any relevant financial compensation, notice periods, and other considerations.

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10 mins
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What is a Voluntary redundancy agreement terms letter?

The purpose of a Voluntary Redundancy Agreement Terms Letter Template is to outline the terms and conditions of a voluntary redundancy agreement between an employer and an employee who has chosen to leave their employment voluntarily. The template serves as a written record of the agreement and ensures clarity and understanding between the parties involved. Some of the key purposes of a Voluntary Redundancy Agreement Terms Letter Template are:

  1. Documenting the agreement: The template serves as a formal document that clearly outlines the terms, conditions, and details of the voluntary redundancy agreement. It ensures that both the employer and the employee have a shared understanding of the agreement and can refer back to it if needed.

  2. Establishing the terms and conditions: The letter template specifies the terms and conditions of the voluntary redundancy, including the amount of redundancy payment, any additional benefits or compensation, notice period, and any other relevant provisions. It helps to establish a clear framework for the agreement.

  3. Ensuring legal compliance: The template ensures that the voluntary redundancy agreement complies with relevant employment laws and regulations. It helps to incorporate the necessary legal requirements and protections, such as adherence to redundancy payment legislation and non-discrimination provisions.

  4. Clarifying rights and responsibilities: The letter template clearly communicates the rights and responsibilities of both the employer and the employee in relation to the voluntary redundancy agreement. It helps to avoid misunderstandings or disputes by providing a written reference for the agreed-upon terms.

  5. Protection for both parties: By documenting the voluntary redundancy agreement in writing, the template helps protect the rights and interests of both the employer and the employee. It provides a reference point in case of any future disagreements or disputes that may arise.

Best practice timescale for this to be issued
When should this letter be issued?
Issued to the employee after they have expressed their intention to pursue voluntary redundancy and the employer has reviewed and accepted their application
Issued by who, to whom
Who should issue this letter, and to whom?
The Employer (you) to the Employee
Applicable legal jurisdiction
In which jurisdiction can this letter be used?
Great Britain & NI (United Kingdom)

What legislation and best practice guidelines have been taken into account in the development of this template?

  • Employment Rights Act 1996: Provides the legal framework for employee rights, including provisions for voluntary redundancy, consultation, and notice periods.

  • Redundancy Payments Act 1965: Establishes the right to receive statutory redundancy payments for eligible employees who voluntarily accept redundancy.

  • Equality Act 2010: Prohibits discrimination, including in voluntary redundancy processes, based on protected characteristics such as age, disability, gender, race, religion, or sexual orientation.

  • Employment Equality (Age) Regulations 2006: Provides specific protection against age discrimination in relation to voluntary redundancy.

  • Part-Time Workers (Prevention of Less Favourable Treatment) Regulations 2000: Ensures that part-time workers are not treated less favorably in voluntary redundancy processes compared to their full-time counterparts.

  • ACAS Code of Practice on Handling Redundancy: Although not legally binding, this code provides guidance on fair and effective redundancy processes, which can be useful when implementing voluntary redundancy programs.

  • Employment contract and terms: The terms and conditions outlined in the employee's contract, including provisions for redundancy, notice periods, and any specific agreements related to voluntary redundancy, should be taken into account in the agreement letter.

Voluntary redundancy agreement terms [Delete this line]

[Company name]

[Sender address]



[Recipient name]

[Recipient address]


Dear [Recipient first name],


Voluntary redundancy confirmation

Following the meeting held on [date] to discuss our acceptance of your application for voluntary redundancy, we now wish to confirm the details of the termination of your employment. We agreed:

  • the date of termination, which will be [date];
  • that this termination date means that you will work [your full/part of your] notice period, your notice period being [number of weeks/months];
  • that you will be paid for [part of] your notice period in lieu of your working out that [part of the] notice period, which in your case means that the amount payable will be £[amount];
  • that you will [take your outstanding [10] days' annual leave due to you prior to your termination date/be paid in lieu of your outstanding [10] days' annual leave on termination/take [five] days' outstanding annual leave due to you prior to your termination date and will be paid in lieu of your remaining [five] days' annual leave on termination];
  • [that you will be entitled to [a bonus/commission] of £[amount];]
  • that the above payments will be conditional on your returning all company property in your possession to the organisation on or before [date of termination] [including your company car];
  • that you will receive redundancy pay of £[amount], which is in line with [the statutory requirements/the organisation's policy on voluntary redundancy/our earlier notification to you regarding the financial settlement available to employees who volunteered and were accepted for redundancy];
  • [your entitlements that you have under the organisation's occupational pension scheme;]
  • [that you sign a settlement agreement, which is an agreement that you will not bring any of a number of employment tribunal claims on termination of your employment.]

Please carefully read, sign and return one copy of the enclosed agreement setting out the full terms for your voluntary redundancy [and settlement agreement] by [date]. [We would like to remind you again that you must ensure that you have taken independent legal advice in relation to the signing of the settlement agreement.]

If you have any queries, please contact [name] on [telephone number and/or e-mail address].

Yours [faithfully | sincerely],



[Sender name]

[Sender job title]

[Sender telephone]
[Sender email]

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Voluntary redundancy application accepted letter template

If you have accepted an application for voluntary redundancy, send this model letter to the employee to confirm the outcome.

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Voluntary redundancy agreement terms letter template
Voluntary redundancy agreement terms letter
voluntary redundancy agreement terms letter