Court of Appeal Upholds Landmark Ruling on Age Discrimination Against Rolls Royce

LONDON - Unite the Union, Britain’s biggest union, has today (14 May 2009) succeeded in securing a landmark judgment from the Court of Appeal against Rolls Royce in one of the first cases on age discrimination to be considered by the higher courts.

The Court of Appeal handed down its landmark judgment upholding Unite’s resistance to an appeal by Rolls Royce against the decision of the High Court which declared that the use of length of service as one of a number of redundancy selection criteria was not age discrimination.

For many years Rolls Royce operated a redundancy selection procedure in agreement with Unite, the recognised union at the company, which included length of service as one of six criteria with one point awarded for each year of service. Despite objections by Unite, Rolls Royce made an application to the High Court seeking a Declaration that the use of length of service as one of the redundancy selection criteria discriminated against younger members of the workforce who had less opportunity to accrue length of service and was therefore unlawful under the Age Regulations.

Rolls Royce’s application was disputed by Unite through its solicitors Thompsons on the basis that length of service was an objective and generally accurate measure of the loyalty and expertise of employees. Unite further asserted that the older and longer serving members of the workforce required a degree of additional protection in a redundancy selection exercise since they were likely to find it more difficult to secure alternative employment if made redundant. Finally, Unite pointed out that the collectively agreed criteria, including length of service, had the jointly agreed objectives of the achievement of redundancies in a fair, transparent and peaceable manner.

The High Court rejected Rolls Royce’s application in October 2008 and Rolls Royce appealed to the Court of Appeal. The Court of Appeal rejection of Rolls Royce’s appeal makes it clear that it is lawful for employers to use length of service as one of a number of criteria when selecting employees for redundancy.

Unite’s joint general secretary, Derek Simpson said: “We are delighted with this decision. The ruling sets a precedent , where other factors are equal, for protecting older workers from the effects of redundancy. It has always been clear to Unite that loyalty seen in length of service should be recognised when an employer takes the drastic step of making redundancy dismissals.”

“We look forward to using this decision to help defend our members’ rights in many other companies as well as Rolls Royce.”

Paul Evans of Thompsons Solicitors commented: “In the current economic climate this is a timely judgment from the Court of Appeal. Employers should take note and realise that they should not seek to renegotiate or go back on longstanding agreements with trade unions about how redundancies should be dealt with.”

Notes to Editors

The High Court’s Decision

The High Court, Sir Thomas Morison (former President of the Employment Appeal Tribunal) presiding, rejected Rolls Royce’s application.

The High Court found, in summary, that:

1. The award of points for length of service was a “benefit” to employees such that the less onerous “justification” test under Regulation 32 applied.

2. That the length of service criterion fulfilled a “business need” of Rolls Royce in rewarding and encouraging loyalty and experience of its workforce and in achieving redundancies in a fair, transparent and peaceable manner.

3. That, even if the more demanding test of justification in Regulation 3 had applied, the length of service criterion would still have satisfied that test in that it was a “proportionate means of achieving a legitimate aim.” The Judgment stated:

“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 employment hard to find.”

The Court of Appeal’s Decision

Rolls Royce appealed against all aspects of the High Court’s decision.

The Court first delivered a lengthy Judgment on the appropriateness of Rolls Royce seeking a Declaration that its procedures were unlawful before the redundancy exercise had been carried out. The Court decided, with some considerable hesitation, that it was appropriate given that the point in issue between the parties involved the “construction and interpretation of material emanating from Parliament … deriving from the European Directive on Age Discrimination” and, as such, was a “matter of public importance … likely to affect a large number of people both employed by the company and beyond” (Judgment, paragraphs 54 to 56).

Having determined that Rolls Royce were entitled to seek the Declaration, the Court then went on to consider the substantive points raised by Rolls Royce in support of its assertion that the length of service criterion did not constitute a “benefit” to employees and that it was unlawful under the Age Regulations. Unite maintained its resistance to both assertions (both having been rejected by the High Court).

The Court of Appeal dismissed Rolls Royce’s appeal and upheld the submissions made by Unite on behalf of the workforce.

Source: Unite the Union

Press enquiries:- Ciaran Naidoo, Unite Press Office +44-(0)7768-931-315 / +44-(0)207-420-8931 Stephanie Lennon, Thompsons Solicitors +44-(0)121-212-6812