Articles
Age does not weary Rolls Royce
At a time of daily announcements of redundancies, an important case has addressed length of service as a basis for selecting for redundancy. Whilst the Court of Appeal has concluded that it is discriminatory on grounds of age for there to be included in a redundancy selection policy a criterion for scoring on the basis of length of service, the step was not unlawful since the provision was a proportionate means of achieving the legitimate aims of rewarding loyalty and helping to create a stable workforce. The decision however has important implications for those with conduct of redundancy selection.
Background
The circumstances were unusual in that it was the employer Rolls Royce plc, rather than the employees or the Union, who applied for a determination that the selection procedure contained within collective agreements affecting two groups of employees was unlawfully discriminatory. The collective agreements provided that redundancy selection would involve a points scoring system, under which employees were assessed in various categories such as expertise and versatility. Each employee was also to receive one point per year of continuous service. A dispute arose over whether this length of service criterion complied with the Employment Equality (Age) Regulations 2006. After receiving advice, the company sought the Court’s clarification of the legal position. The company’s concern was that the criterion amounted to indirect discrimination since younger workers had not had the same opportunity to accrue the same length of service as an older employee. By contrast, the Union had already lodged grievances with the Company in respect of the removal of the service criterion. The case came before the High Court through the CPR Part 8 procedure rather than via the more usual route of an appeal from the Employment Appeal Tribunal.
The High Court
Sir Thomas Morison sitting as a deputy High Court Judge decided that, while the criterion was age discriminatory, it was objectively justified under Regulation 3. The collective agreements were designed to enable any redundancies to be carried out fairly and 'peaceably'. In the High Court's view, this was a legitimate aim. In any event, the agreements would fall within the exemption provided by Reg. 32, which exempts certain benefits based on length of service from the general prohibition on age discrimination.
According to the High Court Judge, allotting points for long service in a redundancy selection procedure may mean workers keep their jobs, which 'would properly be described as a benefit'. The inclusion of a length of service criterion in the collective agreements was therefore lawful. The company appealed.
The Court of Appeal
The Court of Appeal refused the appeal and thereby upheld the legality of the use of the age-related criterion. It is right to point out that the essence of the Part 8 proceedings was an exercise of statutory construction and consequently numerous factual issues were left undecided. Lord Justice Wall emphasised the fact that length of service was only one of a number of criteria and that it was “by no means determinative or definitive of selection”. Secondly, he stated that the criterion was a proportionate means of achieving a legitimate aim. He highlighted the fact that there was no evidence before him to contradict the union’s evidence that the younger employees accepted the presence of the criterion.
The Court also gave the provisional view that the use of length of service as a criterion could be considered a 'benefit' under Regulation 32 thereby providing a defence to a claim of discrimination.
How the management of redundancies may change
The impact of the decision is significant. Employers need to review their procedures to ensure they retain a safer position. Detailed consultation and indeed agreement at every stage of the process is good advice. It was noted that in this case the policy had previously been the subject of agreement and there was no evidence of complaints from the younger employees.
The clearest information should therefore be given to employees as to:
- what criteria are to be applied
In terms of the selection procedure to be employed, if different age bands are used from the statutory scheme then they will potentially be open to challenge and therefore need to be justifiable. The decision however has not given approval to the use of LIFO (Last In, First Out) as a selection process. Nor does this encourage the use of length of service as a critical criterion, such as a tie-breaker between a pair of employees. Those with length of service as a criterion in an existing agreement will need to focus upon its prominence in the selection exercise amongst other selection criteria as to whether it will potentially be unlawfully discriminatory.
Those advising young workers who feel aggrieved by their dismissals will need to analyse carefully the selection process and the extent to which it was agreed.
Rolls Royce plc v Unite the Union [2009] EWCA Civ 387
Anthony Vines
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