Credit for Length of Service in a Redundancy Selection Policy—Potential Exemption From the General Prohibition on Age Discrimination

The High Court held in Rolls Royce plc v Unite The Union [2008] EWHC 2420 (QB) that the granting of credit for length of service in a redundancy selection policy could be regarded as being a ‘benefit' under Regulation 32 of the Employment Equality (Age) Regulations 2006 (Age Regulations). As such, the policy potentially came within the exemption from the general prohibition on age discrimination.

Two collective agreements, one for staff and the other for works employees were entered into between Rolls Royce plc and a trade union. Both agreements related to redundancy and provided for a redundancy selection policy which involved a points-based system under which employees were evaluated in a range of categories, including expertise and versatility. Under this system, each employee could also receive one point for every year of continuous service. It was disputed whether granting credit for length of service complied with the Age Regulations.

The High Court concluded that although this criterion was age discriminatory, it could be objectively justified. The collective agreements were a compromise between the parties which would enable them to carry out redundancies ‘peaceably' and fairly. The length of service criterion respected loyalty and experience and protected older members of the workforce from being made redundant at a time when finding alternative employment could be more difficult. It was held that where a redundancy policy was agreed with a trade union and length of service was only used as part of a broader measure of performance as in the present case, the inclusion of a length of service criterion in the collective agreements was therefore lawful.

In any event, the High Court also found that the granting of credit for length of service in a redundancy selection policy could be regarded as being a ‘benefit' under the Age Regulations and, as such, the policy potentially came within the benefit exemption from the general prohibition on age discrimination.