The Rolls-Royce plc v Unite the Union court ruling was a significant case in 2018, with the Employment Appeal Tribunal (EAT) deciding that the company's consultation process was inadequate.
The EAT found that Rolls-Royce had failed to provide sufficient information to its employees about the proposed changes, which included the closure of a factory.
This lack of information led to a failure to consult properly with the union, Unite, and ultimately resulted in a successful claim for unfair dismissal against the company.
The case highlighted the importance of proper consultation in redundancy situations.
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Court's Decision
The court's decision in Rolls-Royce plc v Unite the Union was a complex one, with multiple layers of analysis and interpretation.
The High Court agreed with the union, concluding that the parties had agreed a scheme that allowed Rolls-Royce to succeed in a defence to an age discrimination claim under regulation three.
The High Court found that the legitimate aim was the advancement of an employment policy which achieves a peaceable process of selection agreed with the recognised Union.
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In any event, the High Court said that this agreement fell within regulation 32, which deals with the award of benefits.
The Court of Appeal also dismissed the appeal, saying that the company could not show that the criterion was not "a proportionate means of achieving a legitimate aim".
The Court of Appeal concluded that the length of service criterion was a proportionate means of achieving a legitimate aim, with the aim being to reward loyalty and achieve a stable workforce.
The Court of Appeal found that the length of service criterion was only one of a substantial number of criteria for measuring employee suitability for redundancy, and was by no means determinative.
The Court of Appeal also stated that the length of service criterion was capable of constituting a "benefit" within regulation 32.
The High Court and the Court of Appeal both interpreted the phrase "reasonably appears" to the employer as requiring an objective assessment of whether the use of the length of service criterion fulfills a business need.
This objective assessment was found to be met, as the use of the length of service criterion was seen as a way to encourage loyalty and reward experience.
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The courts also considered the union's arguments emphasizing the importance of collective bargaining and the acceptance of the criterion by employees, finding these persuasive in supporting the criterion's legitimacy.
Ultimately, the courts found that the length of service criterion was a proportionate means of achieving a legitimate aim, and that it fell within the scope of regulation 32.
Analysis and Ruling
The court's reasoning and analysis were crucial in determining the outcome of the case. The court undertook a detailed statutory construction exercise of the Employment Equality (Age) Regulations 2006 and the underlying EU Directive 2000/78/EC.
The court identified that the length of service criterion constitutes indirect age discrimination under regulation 3(1)(b) and that it confers a "benefit" within the meaning of regulation 32(1). This was a key finding in the case.
The court emphasized that the test of justification requires that the length of service criterion be a proportionate means of achieving a legitimate aim, such as rewarding loyalty and experience or promoting industrial harmony. This is a critical consideration in assessing the lawfulness of the criterion.
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The court acknowledged the procedural difficulties in adjudicating this issue under Part 8 proceedings without the factual matrix typically available to Employment Tribunals. However, it concluded that the construction and interpretation of the statutory instrument was a matter of public importance and within the court’s proper function.
The court found that the length of service criterion is one among multiple criteria in the redundancy selection process and is not determinative alone, which supports its proportionality. This suggests that the criterion is not the sole deciding factor in redundancy decisions.
The court also noted the collective agreements were negotiated with the union representing a majority of employees, which lends weight to their fairness and legitimacy. This is an important consideration in assessing the lawfulness of the criterion.
While the company expressed doubts about whether it could justify the criterion, the court held objectively that the criterion is a proportionate means of achieving a legitimate aim. This is a key finding in the case.
The court stressed that the employer’s current doubts do not negate the objective justification and that the court’s role is to interpret the law rather than to conduct a full factual inquiry, which remains available at the Employment Tribunal stage. This highlights the court's role in interpreting the law.
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The court also considered the union’s arguments emphasizing the importance of collective bargaining and the acceptance of the criterion by employees, finding these persuasive in supporting the criterion’s legitimacy. This is an important consideration in assessing the lawfulness of the criterion.
On regulation 32(2), the court interpreted "reasonably appears" to the employer as requiring an objective assessment of whether the use of the length of service criterion fulfills a business need, such as encouraging loyalty and rewarding experience. This is a key finding in the case.
The court concluded that it does fulfill a business need, supporting the criterion's legitimacy. This is an important consideration in assessing the lawfulness of the criterion.
The court's final decision is to dismiss the appeal, affirming the lawfulness of the length of service criterion under the Regulations. This outcome confirms that the inclusion of length of service as a criterion in redundancy selection matrices negotiated through collective agreements does not, in itself, constitute unlawful indirect age discrimination.
The ruling clarifies the interpretation of "benefit" under regulation 32 and affirms the court’s jurisdiction to hear such issues under Part 8 proceedings despite the absence of individual employees as parties. This highlights the court's role in interpreting the law.
The decision leaves open the possibility for individual employees to challenge redundancy processes in Employment Tribunals, ensuring procedural fairness at the individual claim level. This is an important consideration in assessing the lawfulness of the criterion.
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Case Details
The Rolls-Royce plc v Unite the Union case involved a dispute over the company's decision to close its manufacturing plant in Barnoldswick, Lancashire.
The plant, which was established in 1946, was one of the company's oldest and most historic sites.
The closure was announced in 2019, with the company citing a need to reduce costs and improve efficiency.
The union, Unite, opposed the closure and argued that it would lead to significant job losses and economic disruption in the local area.
The company had previously made commitments to maintain the plant's operations, but ultimately decided to close it.
The closure of the plant was a significant blow to the local community, which had relied on the company for employment and economic activity for many years.
The dispute highlighted the tension between the company's need to reduce costs and the union's desire to protect jobs and maintain the plant's operations.
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Outcome and Implications
The court's final decision in Rolls-Royce plc v Unite the Union was to dismiss the appeal. This means that the company's practice of considering length of service in redundancy decisions is not, in itself, unlawful indirect age discrimination.
The court confirmed that length of service can be a legitimate criterion in redundancy selection matrices, provided it can be objectively justified as a proportionate means of achieving a legitimate aim such as rewarding loyalty and experience. This is a key takeaway from the ruling.
The decision clarifies the interpretation of "benefit" under regulation 32, which is an important aspect of the Employment Equality (Age) Regulations 2006. This clarification will likely have implications for future cases involving age discrimination.
Individual employees can still challenge redundancy processes in Employment Tribunals, ensuring procedural fairness at the individual claim level. This means that employees who feel they have been unfairly affected by a redundancy decision can still take their case to court.
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