The High Court has handed down its decision in Rolls Royce plc v Unite the Union, holding that the inclusion of length of service as a criterion in a redundancy selection policy was not unlawful age discrimination.
The High Court has decided that the use of length of service criterion in a redundancy selection policy does not constitute unlawful age discrimination, as long as it fulfils a legitimate business aim and is a proportionate means of achieving that aim. Whilst this case demonstrates that it may well still be possible to use length of service as a criterion for selecting employees for redundancy an employer will still need to justify its use and this may be difficult where an employer relies solely on a 'last in, first out' approach.
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 points 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 1 point for each year of service. The Employer in this case argued that the length of service criterion in the collective agreement did not comply with the Employment Equality (Age) Regulations 2006 and was therefore unlawful age discrimination.
The parties asked for the High Court, rather than an Employment Tribunal, to settle the matter. It held that the length of service criterion was not unlawful on two grounds:
- Whilst the criterion relating to length of service was itself discriminatory, the High Court held that it could be objectively justified as being a proportionate means of achieving a legitimate aim.
The legitimate aim here was the fact that the collective agreements represented a compromise between the employer and trade union, enabling them to conduct redundancies in a fair and "peaceable" manner.
The High Court also noted that the length of service criterion respected loyalty and experience amongst its staff, as well as protecting older staff members from being made redundant.
- It would also be covered by the exemption in Regulation 32. This provides that the Age Regulations do not prevent a worker being placed in a better position than other workers by the "award of a benefit" based on length of service of five years or less, and where it exceeds five years, if it reasonably appears to the Employer that the use of length of service fulfils a business need. In this case, the High Court concluded that giving points for length of service in a redundancy selection procedure would confer a benefit on the Employee concerned (to remain in employment and not lose his/her job).
In addition, the business need was met where the employer and trade union had agreed a redundancy scheme in which length of service is one of several criteria to be considered.