Redundancy and Age Discrimination

28 11 2008

Over the last few weeks I’ve been writing about the various issues surrounding redundancy procedure and selection.  A couple of weeks ago an interesting High Court case was reported which dealt with the issues arising on redundancy where selection on the grounds of age became relevant.  The case in question was Rolls-Royce v Unite, and was unusual in that the employer was seeking to argue that its own selection criteria was age discriminatory and the Union was arguing that it was not. Normally, of course, one would expect the positions to be reversed.

In this case, Rolls Royce operated a selection criteria that gave points for various factors, such as skill and expertise, achievement of targets, contribution to the business, self-motivation and, particularly relevant for these purposes, length of service. Those with fewest points overall were selected for redundancy. The effect of the length of service factor meant that workers with long service would gain more points and thus be less likely to be selected for redundancy than workers with shorter service who were more likely, therefore, to be younger.  Rolls Royce argued that this policy was indirectly discriminatory because it favoured older workers. 

The Court disagreed and held that such a policy could be justified by the employer (justification for a policy that is otherwise discriminatory being a defence under Age Discrimination legislation) on the grounds that the policy fulfilled a “business aim”, namely it was a contractual benefit rewarded employees loyalty and also that older workers would find it harder to obtain alternative employment upon redundancy.  The scheme was also found to be a means of enabling redundancies in the workforce to be handled “peaceably”. 

What does this case mean for employees and employers?  For businesses it is a double-edged sword because although on the one hand they may be relieved to know that the application if such a selection policy will not land them with claims for age discrimination, it also means that the flexibility they seek in selecting candidates for redundancy is reduced.  Remember, in this case it was Rolls Royce that sought to argue its own policy was discriminatory. The case is also good news for older employees with long service and less good for those with shorter.

 

 This article will appear in the “Docklands” and “Peninsula” newspapers week commencing 1st December.

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