In the recent case of Rolls Royce PLC v Unite the Union (CA 14 May 2009), the Court of Appeal upheld the decision of the High Court that length of service as a criterion in a redundancy selection process is not unlawful under the Employment Equality (Age) Regulations 2006.
Under a collective agreement, employees of Rolls Royce were awarded one point for every year of service. Rolls Royce sought a declaration that this was age discriminatory and should no longer be a criterion used in the redundancy selection process.
The Court of Appeal held that awarding a point per year of service was a benefit within the meaning of the Employment Equality (Age) Regulations 2006, and so the practice of using length of service as a criterion in a redundancy selection process could potentially amount to indirect age discrimination. In these circumstances, however, it was found that any potentially indirectly discriminatory practice could be justified. The court held that using a length of service criterion was a proportionate means of achieving a legitimate aim, namely the reward of loyalty and the overall desirability of achieving a stable workforce in the context of a fair process of redundancy selection. It was also found that the proportionality element of the test was satisfied by the fact that length of service was only one of a substantial number of criteria for measuring employee suitability for redundancy.
This is the first case to consider the use of length of service as a criterion in a redundancy selection process. The case demonstrates that such a criterion can be age discriminatory but provides useful guidance to employers as to how such indirect discrimination can be justified.