The Court of Appeal has upheld the High Court's decision in Rolls Royce Plc v Unite the Union that including length of service as a criterion in a redundancy selection policy is not unlawful age discrimination.
The Court of Appeal has confirmed that the use of length of service criterion in a redundancy selection policy does not constitute unlawful age discrimination and therefore is not in breach of either the UK's Age Regulations or the European Union's Directive on Age Discrimination (from which the UK's Regulations derive).
However, the Court made it clear in its judgment that length of service as a criterion was lawful in this case because it was just one criterion amongst many and was not determinative of the selection. Therefore, employers who rely on selection criteria based on "last in first out" or where length of service is given a determinative weighting, could find it difficult to argue that their selection policies are not discriminatory on the grounds of age.
This case related to a collective agreement which Rolls Royce Plc had with Unite the Union relating to "redeployment and redundancy". It provided for a point scoring system where those employees scoring the least amount of points were selected for redundancy. As part of the selection criteria, an employee would receive one point for each year of service. Rolls Royce argued that the length of service criterion in the collective agreement did not comply with the Employment Equality (Age) Regulations 2006 and therefore was unlawful age discrimination. Both parties asked the High Court to settle the matter. The High Court held that the length of service criterion was not unlawful (see Howes Percival Newsflash 23 October 2008). Rolls Royce appealed. The Court of Appeal upheld the High Court's decision and found that the length of service criterion was not unlawful on the following grounds:
- A length of service criterion is indirectly discriminatory on the grounds of age and therefore must be a proportionate means of achieving a legitimate aim in order to be lawful.
- The Court held that rewarding loyalty and a fair process of redundancy selection were legitimate aims. It further held that the redundancy selection policy was proportionate because length of service was just one criterion amongst many and was not determinative.
The Court also agreed with the High Court that the length of service criterion was covered by the exemption in Regulation 32 of the Age Regulations, which provide that a worker can be placed in a better position than others by the award of a "benefit" based on length of service of five years or less (or where it exceeds five years, where it fulfils a business need). The Court of Appeal's view was that counting a point for every year of service in a redundancy selection process was clearly a "benefit" to workers and did fulfil a business need (i.e. having a loyal and stable workforce).