The High Court, in the case of Rolls Royce plc v Unite the Union, has declared that a length of service criterion for redundancy selection that was set out in a collective agreement was not unlawful.

This case concerned two collective agreements between Rolls Royce and Unite relating to redundancy and restructuring. The agreements contained an assessment matrix based on a system of points scored against relevant criteria. One of the criteria was length of service, in relation to which employees received one point for each complete year of service. The Court was asked to determine whether the use of the length of service criterion amounted to unlawful age discrimination.

The High Court held that the length of service criterion was discriminatory but it could be objectively justified as a proportionate means of achieving a legitimate aim. The agreements had been negotiated to enable the employer to carry out redundancies "peaceably" and in a way that was perceived to be fair. This amounted to a legitimate aim. The length of service criterion also respected loyalty and experience and protected older workers from being made redundant.

The length of service criterion would in any event be covered by the exemption in Regulation 32 of the Age Regulations, which allows employers to award benefits based on length of service to employees with more than five years' service, provided that the award reasonably fulfils a business need. The High Court concluded that giving points for length of service can be regarded as a conferring a benefit on the employees, as it gives them an advantage over colleagues when the employer has to decide which of them will lose their jobs.

In reaching this conclusion, the High Court took account of the fact that it was agreed with the trade union with a view to achieving a fair selection and was only provided as part of a wider measure of performance.

Impact on employers

This is the first case to consider the role of length of service in the selection of employees for redundancy. It demonstrates that it should be possible to use length of service as one of a number of criteria in selecting employees for redundancy provided it is not given undue weight. However, using "last in-first out" as a sole selection criterion is unlikely to be justifiable.