Showing their age

Rolls Royce plc v Unite the Union

It is unlawful to directly or indirectly discriminate against someone because of their age, unless the employer can justify it. In Rolls Royce plc v Unite the Union, the Court of Appeal said that length of service in a redundancy selection policy was a justifiable criterion for redundancy selection.

Basic facts

The union had negotiated two collective agreements on redundancy with the company many years before the introduction of the age regulations. As part of the selection process, every employee was scored under five criteria and also received one point per year of continuous service. Points were deducted for unauthorised absences and those with the fewest points were selected for redundancy.

With the introduction of the age regulations in 2006, Rolls Royce argued that using length of service would unlawfully discriminate against younger workers under regulation 3, but Unite disagreed and both parties asked the High Court to adjudicate.

Relevant law

Regulation 3 states that it is direct age discrimination for an employer to treat someone less favourably than someone else because of their age unless they can justify it. Also that it is indirectly discriminatory to apply a provision, criterion or practice which seems to apply to everyone equally, but which actually disadvantages people of a certain age group, which the employer cannot justify.

Regulation 32 states that it is not unlawful for one worker to be put at a disadvantage in comparison to another worker “in relation to the award of any benefit” that is based on length of service, as long as it “reasonably” appears to the employer this fulfils a genuine business need.

High Court decision

The High Court agreed with the union. It concluded that the parties had agreed a scheme that allowed Rolls Royce to succeed in a defence to an age discrimination claim under regulation three, as “the legitimate aim is the advancement of an employment policy which achieves a peaceable process of selection agreed with the recognised Union”.

In any event, the High Court said that this agreement fell within regulation 32. Contrary to what the employers had argued, there was no reason to interpret the phrase “award of any benefit” narrowly and it was certainly a benefit to remain in employment when other people lost their jobs.

Court of appeal decision

The Court of Appeal dismissed the appeal, saying that the company could not show that the criterion was not "a proportionate means of achieving a legitimate aim".

Viewed objectively, the Court concluded that the length of service criterion was a proportionate means of achieving a legitimate aim. The aim was to reward loyalty and achieve a stable workforce, both perfectly legitimate business aims.

It was proportionate because “the length of service criterion is only one of a substantial number of criteria for measuring employee suitability for redundancy, and that it is by no means determinative. Equally …the length of service criterion is entirely consistent with the overarching concept of fairness”.

Although it was not strictly necessary to consider regulation 32, the Court said that the key word in the legislation was "reasonably". And, in its view, a length of service criterion of more than five years did “reasonably” fulfil a business need of the company - having a loyal and stable workforce.

Although not part of the actual judgement, the Court also stated that the length of service criterion was capable of constituting a "benefit" within regulation 32. “To count a point for every year of service in a redundancy selection process is plainly capable of constituting a benefit, without any violence to the word's meaning, and in the absence of any statutory definition which inhibits the word from otherwise having its wide dictionary definition”.