High Court rules long service is contractual benefit in redundancy selection

The High Court has ruled that taking length of service into account when setting redundancy selection criteria is not age discriminatory as it should be considered a contractual benefit.

In the case of Rolls Royce versus Unite the Union, the car firm sought to use Employment Equality Age Regulations to claim that its own redundancy selection policy was discriminatory. It wanted to remove the practice of awarding staff a point for each year of service when deciding who to choose for redundancy on a points-based system. The firm also awards points across five areas, including expertise and versatility.

But Unite wanted to keep this clause in the redundancy selection procedure, arguing that it protects older workers and, furthermore, that it is a contractual benefit.

The High Court agreed, and ruled that rewarding long service in a redundancy selection policy could be defined as a benefit, effectively rewarding long service and loyalty to the company. But it said it may not have reached this conclusion if the company was operating a simple ‘last in, first out’ basis.

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Derek Simpson, joint general secretary at Unite, said: “This landmark ruling sets a precedent for protecting older workers from the effects of redundancy. We believe that Rolls Royce [was] effectively trying to use age discrimination legislation to remove agreements which are designed to protect older workers.”

Rachel Dineley, head of the diversity and discrimination unit at law firm Beachcroft, said: “It is important to note that this is in no way an endorsement of the old fashioned ‘last in, first out’ approach. On the contrary, in most cases this would be very difficult to justify, even if the objective was to secure a redundancy exercise peaceably.”