Some recent high court thoughts on LIFO;
17 October 2008
Unite, Britain’s biggest union, has secured a landmark ruling from the High Court in one of the first cases on age discrimination to be considered by the courts.
The company sought to argue that taking long service into account when selecting workers for redundancy amounted to indirect age discrimination.
Rolls Royce claimed that part of a long-standing redundancy selection agreement was unlawful in the light of the 2006 Regulations outlawing certain types of age or service-related discrimination. This would have had the effect of automatically discounting long service in future rounds of redundancy.
The High Court flatly rejected that argument, accepting the Union’s case that the service element in the redundancy procedure was lawful as it was a contractual benefit that was effectively a reward for loyalty to the company. The Court also accepted that older workers typically have more difficulty finding new work after being made redundant, and that seeking to protect them in redundancy agreements was legitimate even under the 2006 Age Regulations.
Unite has been concerned that the Regulations are being used by some employers to remove service-related benefits for reasons that have nothing to do with concerns about discrimination.
Unite joint general secretary, Derek Simpson said: "This landmark ruling sets a precedent for protecting older workers from the effects of redundancy. We believe that Rolls Royce were effectively trying to use age discrimination legislation to remove agreements which are designed to protect older workers.
"When an economic downturn bites older workers often find it harder to find alternative employment when they are made redundant. This landmark ruling will give many older workers some extra protection during these difficult times.
"Unite have found that many companies have tried to use the Age Discrimination Regulations as an excuse to level down rights, especially in relation to redundancy. We look forward to using this decision to help defend our members rights in many other companies as well as Rolls Royce."
The Employment Equality (Age) Regulations 2006 outlaw direct and indirect discrimination on grounds of age. Service-related provisions in employment contracts can be indirectly discriminatory because longer serving workers usually tend to be older.
If a provision is a service-related benefit, it is possible to justify the less favourable treatment of shorter-serving workers if the provision is a means of achieving a “business aim”. Rolls Royce argued that its only business aim in applying the redundancy terms was to retain the best people for the future, but the Court accepted the Union’s argument that when it made the redundancy agreement the company agreed with the Union that there were other aims involved, including having a fair and transparent system which achieved a reduction in headcount “peaceably”.