In the recent case of Rolls Royce Ltd v Unite the Union, the High Court ruled that it was not unlawful age discrimination to have a term in a collective agreement that identified length of service as a redundancy selection criterion, as it achieved the legitimate business aims of rewarding loyalty and experience.

This case was, unusually, presented to the High Court to determine based on agreed facts rather than being argued before an Employment Tribunal. The employer contended that the length of service criterion in the agreed redundancy process was unlawful age discrimination which could not be justified whereas the union contended the criterion was justified.

The key legal issues were identified as follows:

  1. it was essentially common ground between the parties that the length of service criterion was potentially unlawful, unless justified, as it discriminated against younger employees;
  2. the appropriate standard of justification depended upon whether the criterion constituted a "benefit based on length of service";
  3. "justification" in this context meant satisfying the court or tribunal that the measure fulfilled a business need, for example by encouraging the loyalty or motivation, or rewarding the experience, of some or all of the workers.

The Judgment

"Benefit" for these purposes was defined as "advantage" or "profit". Nothing in the Employment Equality (Age) Regulations 2006 suggested that "benefit" was to be construed narrowly so as to be limited to financial payments or discounts. The criterion did represent an advantage in that the points awarded for longer service may lead to non-selection for redundancy.

As to whether a business need was identified, the business need identified in the case was encouraging loyalty which is a prime example of such a need.

For those reasons, the discrimination was justified and so was not unlawful. There are, however, two points in particular to be alert to here.

The first is that the agreed redundancy process under scrutiny was not limited to a "last in first out" selection policy which, had that been the case, might well have proved objectionable to the court. Various other criteria were involved in the selection process.

The second is that the judge himself expressed considerable reservations about determining the issues put before him given that he recognised the issues were more appropriately dealt with by an Employment Tribunal and the Employment Appeal Tribunal if necessary. Even so, this judgment from a very experienced and highly respected employment specialist is likely at the very least to be regarded as highly persuasive.