Length of service can lawfully form part of selection criteria for redundancy

In a recent decision the Court of Appeal held that, although using length of service as a criterion to select employees for redundancy does constitute indirect age discrimination within the terms of Regulation 3 of the Employment Equality (Age) Regulations 2006, it can be objectively justified as a proportionate means of achieving a legitimate aim.

In the case of Rolls Royce Plc v Unite the Union, Rolls Royce had, in 2003, agreed the terms of a collective agreement with the union which set out the criteria for selection for redundancy as being: achievement of objective, self motivation, expertise/knowledge, versatility/application of knowledge and wider personal contributions to the team. The agreement also set out that where, in a redundancy scoring exercise, two employees had the same total assessment score, length of service with the company would be the decisive factor and the employee with the longest service would be retained.

This collective agreement was finalised ahead of the introduction of the Employment Equality (Age) Regulations 2006. Thereafter, Rolls Royce became concerned that the terms may be discriminatory and sought a declaration from the High Court who held that the terms were lawful.

The matter was appealed to the Court of Appeal. The Court of Appeal found that considering the length of an employee's service was indirectly discriminatory; however, it could be justified as achieving a legitimate aim, namely rewarding employee loyalty and achieving a stable workforce in the context of a fair redundancy process. The Court of Appeal also specifically addressed an issue that had not been considered by the High Court - the proportionality of the measure - and was satisfied that it was a proportionate means of achieving the legitimate aim. The Court specifically referred to the fact that the length of service was only one of several selection criteria and that it had been negotiated and agreed upon by both the employer and the union as evidence for this finding of proportionality.

Although this case may appear positive to employers, it is important to remember that this case was decided very much upon its particular facts and any employers who include a similar criterion in their redundancy selection matrix should ensure that undue weight is not placed on it and that it is merely one of several, varied criteria.