In Rolls-Royce v Unite the Court of Appeal refused to order that a length of service criteria in a collective agreement unlawfully discriminated against younger workers.
The trade union and employer in this case had agreed to two collective agreements that would make it difficult for the employer to make employees with longer lengths of service redundant during a redundancy selection process. The employer argued that the collective agreements were age discriminatory (on the basis that they discriminated against younger workers) and were unlawful under the Age Regulations 2006.
Regulation 3 of the Age Regulations 2006 prohibits employers from directly or indirectly discriminating between employees on the basis of age. However, indirect discrimination is permitted if the employer can show that it was a “proportionate means of achieving a legitimate aim”. Regulation 32 also allows employers to offer “benefits” that positively discriminate in favour of workers with longer lengths of service.
The Court of Appeal refused to declare that the collective agreements were unlawfully discriminatory. However, the court was not able to come to a unified view of the law.
After some detailed discussion of the procedural issues, Lord Justice Wall and Lady Justice Arden agreed to hear the appeal under Civil Procedure Rule Part 8 (alternative procedure for claims). Lord Justice Aikens dissented because employees most affected (those with short lengths of service) were not represented in court. He was only willing to hear some of the questions under the appeal.
Lord Justice Wall and Lady Justice Arden held that favouring workers with longer service indirectly discriminated against younger workers but could be justified under regulation 3 as a “proportionate means of achieving a legitimate aim”.
Lord Justice Wall was satisfied that the legitimate aim underpinning the length of service criteria was the “loyal and stable workforce”. Lady Justice Arden felt that collective agreements had a legitimate aim because they aimed to avoid disagreements and dissent in the workforce.
Lord Justice Wall and Lady Justice Arden agreed that the length of service criteria in the collective agreements were “proportionate” under regulation 3 because the length of service criteria was only one of a number of criteria for measuring employee suitability for redundancy and was not determinative. Lady Justice Arden was also persuaded that they were proportionate because “the collective agreements were negotiated between the union and the employer and they represented a compromise of the parties’ respective negotiating positions”.
All three judges agreed that the employees that received an advantaged from the length of service criteria received a “benefit” within the meaning regulation 32 exemption (therefore the exemption could potentially apply). Lord Justice Wall and Lady Justice Arden agreed that the exemption applied.
Lord Justice Aikens dissented. He was not persuaded that the service selection criteria were even age discriminatory. Furthermore, he argued that if they were age discriminatory it was not clear that the exemptions under regulations 3 and 32 applied.