AGE NO OBJECT

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 High Court said that length of service in a redundancy selection policy was a justifiable criterion for redundancy selection.

Basic facts

The union had negotiated two (very similar) collective agreements on redundancy with the company – one for staff and the other for works employees – many years before the introduction of the age regulations.

The union had always been opposed to any compulsory redundancies but accepted that there could be circumstances that required a framework "to enable peaceable restructuring, and fair selection of affected employees”

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, Rolls Royce argued that using length of service would unlawfully discriminate against younger workers 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 the treatment.

It also states 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, again, 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 this fulfils a genuine business need. Regulation 32(2) requires employers to justify the impact of an age related award to employees whose length of service exceeds five years.

High Court decision

The High Court agreed with the union. It said that it was in the interests of both parties that the redundancy exercise was carried out fairly and “peaceably” and that this, in itself, was a legitimate business aim.

In its view “the criterion of length of service respects the loyalty and experience of the older workforce and protects the older employees from being put onto the labour market at a time when they are particularly likely to find alternative employment hard to find”.

It concluded, therefore, 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.

The High Court judge said it was “significant that Parliament contemplated that a length of service criterion might reasonably appear to an employer to encourage loyalty or reward experience. Where there is an agreed redundancy scheme, negotiated with a recognised Trade Union, which uses a length of service requirement as part of a wider scheme of measured performance, it is probable in my judgment that such would be regarded as reasonably fulfilling a business need”.

Rolls Royce was therefore wrong to argue that the length of service criterion in the collective agreements was unlawful under the age regulations, but was given leave to appeal.