loyalty and experience can help stave off redundancy

Giving credit for length of service in a redundancy selection policy is not necessarily unlawful age discrimination, a High Court has decided.

General union Unite had agreed collective agreements with Rolls-Royce for its Derby and Hucknall sites. They contained a redundancy policy with assessment against five measured criteria. Points were deducted for unauthorised absences and one point a year was added for each year of continuous service. Those with least points were selected for redundancy.

It was agreed that the length of service criterion disadvantaged younger employees, but Unite felt it was nevertheless justifiable.

The union argued that the criterion was not a blunt tool, such as “Last In, First Out”, which stood alone. Here it was part of a sophisticated approach, which also measured other factors. Businesses need to encourage loyalty, and offering employees increased protection for when economic times are bad is more valuable to them than being awarded a gold watch for long service.

The High Court accepted the union’s view that the service criterion respected the loyalty and experience of the older workforce at a time when older employees were particularly likely to find alternative employment hard to find.

Rolls-Royce plc v Unite the Union [2008] EWHC 2420