Rolls Royce v Unite [2008] EWHC 2420 HC

age discrimination | collective agreements | redundancy selection

The High Court has held that two collective agreements that set out an approach to redundancy that gives points for length of service in the selection process are lawful under the age discrimination legislation.

Regulation 3(1) of the Employment Equality (Age) Regulations 2006 (SI 2006/1031) prohibits the application of a provision, criterion or practice that is disadvantageous to a particular group because a considerably smaller proportion of that group is able to comply with it, unless it can be shown that the provision, criterion or practice is a proportionate means of achieving a legitimate aim.

Regulation 32 of the Employment Equality (Age) Regulations 2006 provides an exception for service-related benefits awarded by reference to a length of service criterion of up to five years. It also allows a length of service criterion of more than five years where it reasonably appears to the employer that the way in which the criterion is used fulfils a business need. Regulation 32 gives the example of encouraging the loyalty or motivation, or rewarding the experience, of some or all of its workers.

Rolls Royce entered into collective agreements with Unite that setting out the approach that would be taken in redundancy situations. They provided for a redundancy selection matrix that gave positive and negative points, including one positive point for each year of continuous service. Rolls Royce brought proceedings claiming that using length of service as a criterion in redundancy selection is unlawful under the Employment Equality (Age) Regulations 2006. Unite claimed that the criterion is lawful.

The High Court held that the collective agreements have the legitimate aim of advancing an employment policy that achieves a peaceable process of redundancy selection agreed with the recognised union. The criterion of length of service respects the loyalty and experience of the older workforce and protects the older employees from being put into the labour market at a time when they are less likely to be able to find alternative employment. It could therefore be justified under reg.3.

In any event, the criterion is lawful under reg.32. The inclusion of a length of service criterion fell within the meaning of "benefit". The award of points for long service confers on the employee concerned a benefit, in this case remaining in employment while others lose their jobs. An agreed redundancy scheme that is negotiated with a recognised trade union and uses a length of service requirement as part of a wider scheme of measured performance could be regarded as reasonably fulfilling a business need.

Case transcript of Rolls Royce v Unite (on the BAILLI website)

Go to HR & Compliance Centre case law stop press.