'Last in first out' lives on as part of redundancy selection criteria

9 June 2009

Email article : Print article : More articles like this

The Court of Appeal have confirmed that the continued use of last in first out (LIFO) as part of a selection criteria for redundancy is still lawful and not necessarily age discrimination.

In the case of Rolls Royce Plc v UNITE the Court upheld the collectively agreed selection criteria which applied at Rolls Royce's sites. This means that employers can continue to use LIFO as part of a redundancy selection matrix and must continue to do so where contracts or agreements with the Unions require you to do so.

The key points that come out of the decision are:

using length of service as a criterion is potentially indirectly discriminatory against younger workers (who are less likely to have the same length of service);
however, where length of service is used as part of a criteria and is not "plainly dominant" or "necessarily determinative" of the outcome of the application of the combined criteria, its use is a proportionate means of achieving a legitimate aim (and is therefore lawful);
the legitimate aim is the reward of loyalty, the overall desirability of achieving a stable workforce, and the reward for long service;
the use of length of service as part of a redundancy criteria is a "benefit" which means that the less stringent test in the age regulations applies, meaning an employer only needs to demonstrate that it reasonably appears to fulfil a business need (which is relatively easy to do and will be the need to have a loyal and stable workforce).

What is also clear from the wording used in the judgment is that the outcome would have been different if LIFO had been the sole criteria used for selection. Whilst this decision does not quite give us absolute certainty on this, it certainly strongly supports any individual in arguing that the use by an employer of LIFO as a sole criterion means that their dismissal is unfair and age discrimination.

If LIFO is part of the criteria you use, you need to consider the weight which it is given. The stronger or more determinative it is, the greater the risk. If it is in practice one of a number of factors, this decision provides support to you for continuing to use it.

About the author

This article was put together by the FPB's legal advisers, Mace & Jones Solicitors. For more information see www.maceandjones.co.uk.

Email:
eNewsletter archive

'Last in first out' lives on as part of redundancy selection criteria

Related articles