The ruling in the case of Rolls-Royce v Unite found giving staff points in this way, as Rolls-Royce did, was not necessarily unlawful age discrimination as it could be objectively justified. Rolls-Royce wanted to discontinue the practice, but the union argued in favour of it.
Rachel Dineley, head of the diversity and discrimination unit at law firm Beachcroft, said: "The court agreed with Unite and this case is a win for many older employees. In difficult economic times most employers wish to have maximum flexibility in determining who to retain and who to let go, but collective agreements may govern the matter.
"In light of this decision, employers who historically have included points for length of service in their redundancy selection process may encounter difficulty in abandoning the practice to allow a wider pool of choice for redundancies."
Age discrimination legislation currently permits employers to use length of service as a factor when rewarding employee benefits, provided more than five years of service is taken into account - and this does not apply only to tangible benefits such as pay and annual leave.
Dineley pointed out the ruling was not an endorsement of a ‘last in, first out' approach to redundancy. But she added: "While the decision gives clarity to the law, it still leaves plenty of scope for negotiation between employers and their workforce."
Tribunal rules length of service can be considered when deciding redundancies in Rolls-Royce case
The Court of Appeal has ruled that employers can award points to staff for years of service as a benefit, to consider when making redundancy decisions.
