Age Discrimination, Redundancy Payments and Length of Service
| Author | Malcolm Sargeant |
| DOI | http://doi.org/10.1111/j.1468-2230.2009.00760.x |
| Date | 01 July 2009 |
| Published date | 01 July 2009 |
CASES
Age Discrimination, Redundancy Payments and Length
of Service
Malcolm Sargeant
n
This note discusses three cases which have considered objective justi¢cationfor the apparent con-
tradiction between rewarding age and length of service in redundancy payments and the need
not to discriminate on the grounds of age.It considers the relevance of cases from the European
Court of Justice about whether there can be a general exception to the need to justify using the
criterion of length of service, or seniority, in equal paycase s.
Length of service has traditionally been a contributory factorin the selection pro-
cess for redu ndancy. Indeed it has often been the decidi ng factor with the use of
such policies as ‘Last in First out’ (LIFO). The arguments in favour of the use of
such a criterion, by trade unions at least,i nclude the fact that it is an objective test
and diminishes employer discretion in the selection process. It also provides
greater protection for older workers who, despite the adoption of the Employ-
ment Equality (Age) Regulations 200 6 (theAge Regulations),
1
will generally¢nd
it much more di⁄cult to obtain work than their younger colleagues. There is,
however, an apparent contradiction between the ability to take length of service
into account as a criterion in selection for redundancy and a desire to end discri-
mination upon the basis of age. Use of this criterion will tend to favour longer
serving employees and, therefore, older employees at the expense of younger
ones.The same can be said of redundancy payments schemes which provide extra
money to those with longer service.
A number of cases have dealt with the issues arising from this apparent contra-
diction.These cases concerned redundancy schemes which were all much more
generous than the State scheme but which were claimed to discriminate against
individuals, on the grounds of age, in particular circumstances. The essential point
in all the cases is whether redundancy schemes which are related to length of ser-
vice can be objectively justi¢ed as having a legitimate aim and proportionate
means of achieving that aim.
Rolls Royce vUni te the Un ion
2
(Rolls Royce ) considered two collective agree-
ments which had an agreed matrix to be used to choose who should be selected
for redundancy. There were ¢ve criteria against which an individual could score
between 4 and 24points. In additionthere was a lengthof service criterion which
awarded 1 point foreach year of continuous service.Thus older employees would
n
Professor of Labour Law, Middlesex University Business School.
1 Employment Equality (Age) Regulations 2006 SI 2006/1031.
2RollsRoyce plcvUnite the Union [2008] EWHC 2420 (QB).
r2009 The Author.Journal Compilation r200 9 The Modern LawReview Limited.
Published by BlackwellPublishing, 9600 Garsington Road,Oxford OX4 2DQ,UK and 350 Main Street, Malden, MA 02148, USA
(2009) 7 2(4) 628^6 47
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