Rolls-Royce system was not age discrimination
15 May 2009
Using length of service as one of the criteria in redundancy selection is justified and is not unlawful age discrimination, according to a key judgment in the Court of Appeal.
In the case of Rolls-Royce v Unite the Union, the court found that awarding points for years of service is not unlawful age discrimination against younger people, and may be considered a benefit for those with longer service. This upholds the earlier High Court ruling in October 2008.
The dispute between Unite and Rolls-Royce arose when agreed redundancy criteria were renegotiated during redundancy talks at two works in Derby. Rolls-Royce wanted to stop using length of service as one of the criteria because of concerns over age discrimination against the young, while the union wanted to keep it as they said it protected older workers.
The court also agreed with Unite’s argument that even if the criteria resulted in indirect discrimination, this could be justified as a proportionate means of achieving a legitimate business aim.
Employers will welcome the decision because a successful appeal would have meant reworking many selection criteria to exclude length of service.
But lawyers warned that the verdict should be treated with caution because proceedings started in the High Court rather than the employment tribunal. This was because the parties had invoked a little-used rule that allows them to ask the court a question on the basis of agreed facts, and with no oral evidence.
Unite's joint general secretary, Derek Simpson, said: "The ruling sets a precedent, where other factors are equal, for protecting older workers from the effects of redundancy. "
Head of the diversity and discrimination unit at law firm Beachcroft LLP, Rachel Dineley, said: “In difficult economic times most employers wish to have maximum flexibility in determining who to retain and who to let go – but collective agreements may govern the matter.
"In light of this decision, employers who historically have included points for length of service in their redundancy selection process, may encounter difficulty in abandoning the practice to allow a wider pool of choice for redundancies,” she said.
But she said while the decision clarifies the law, it leaves scope for negotiation between employers and the workforce.