For many years Lifo (“Last in, first out) was a popular measure for selecting employees for redundancy. Even until the arrival of the Employment Equality (Age) Regulations (the ‘Age Regulations') it was still used, sometimes as the only criterion by which employees were selected or more often as just one of a number of selection criteria. By the time the Age Regulations came along length of service was not used by the more sophisticated employers – not least because, from the employers’ point of view, it may be ineffective for thinning out the least worthy employees. Then the advent of the Age Regulations persuaded all but the most benighted employers that there were likely some dangerous hazards having any service length criteria in the selection process for redundancy as to do so could be taken to be age discriminatory of the younger employees who are often the last in, the most recently recruited. The Court of Appeal has recently looked at the application of the Age Regulations in this context in the case of Rolls-Royce Plc v Unite the Union. Rolls-Royce and its recognised union, Unite, made collective agreements relating to the redeployment and redundancy of employees at two factories. The agreements had been made before the Age Regulations came into force and they recorded Unite's recognition that, in order to "enable peaceable restructuring, and a fair selection of affected employees without disruption to the business", selection criteria might be used in the redundancy process: length of service was one of five criteria mentionedin these agreements. When it came to the redundancy exercise Rolls-Royce was concerned about whether the service criterion was lawful. Rather than risk trouble after the event the company sought a declaration from the Court that its redundancy policy was indirectly discriminatory on the grounds of age because it favoured workers with longer service. The union opposed the application and argued that the policy provided an employee benefit and that it was objectively justifiable, as it promoted loyalty and enabled the business to retain the expertise of the older workers which therefore brought it within the Regulations. The Age Regulations allow that benefits offered on the basis of length of service will not be discriminatory if it reasonably appears to the employer that the benefit scheme fulfils a business need. The Court also held that a length of service criterion in a redundancy exercise did amount to such a permitted benefit because it fulfils the business need of maintaining a loyal and stable workforce. Employers may feel that they can now use length of service as a criterion in redundancy selection. However, care should still be taken to ensure that length of service is not the only factor, the main factor or given undue weight when a decision as to whom to select is being made. Both employers and employees may also be glad that loyalty may be recognized when it comes to redundancies.
