Since the introduction of the Employment Equality (Age) Regulations 2006, there has been a great deal of confusion about the continued use of ‘last in first out’ in redundancy selection criteria.  This was because it was believed that it could be discriminatory on the grounds of age as younger workers were likely to be adversely affected in favour of older workers who were more likely to have built up long service with an employer. 

A test case of Rolls Royce -v- Unite the Union, dealing with these points, has recently been decided by the High Court. 

Rolls Royce had implemented a redundancy selection criteria in which employees were assessed in various areas including achievement of objectives and expertise.  They were also awarded a point for each year of continuous service.  Those with the least points overall were selected for redundancy.  The Union wished to continue the scheme but Rolls Royce felt it should be changed as it favoured longer serving employees over younger colleagues. 

Sir Thomas Morrison, in the High Court, decided that although awarding points for each year of service did amount to indirect age discrimination, it was a proportionate means of protecting older workers in a declining labour market.  Length of service can therefore still be used in redundancy selection criteria. 

Simon Thomas, Partner specialising in Employment Law, comments, “This decision will be welcomed by employers as it confirms for the first time that ‘last in, first out’ is not excluded by the 2006 Regulations. 

He advises:  “To be on the safe side, employers should still exercise caution in using ‘last in first out’ if they are making redundancies.  It would be best practice to use length of service in conjunction with a good mix of other criteria that are not dependant on age e.g. performance, appraisal results, sickness absence records etc.  It is important for employers to maximise the flexibility of the redundancy selection criteria to enable them to determine what meets their business needs.”

Any employers or employees who may be affected by potential redundancies or would like advice on these matters should contact Simon Thomas