Companies can take employees’ length of service in to consideration when choosing who should be made redundant, the Court of Appeal said today, in a ruling that will protect older workers in the current downturn.

Clarifying the fate of several hundred Rolls Royce workers facing redundancy, three judges said that how long they had worked at the engine maker was an acceptable factor to consider – even though it gave older staff an advantage over younger colleagues.

The issue has perplexed employers since new laws banning workplace discrimination on the basis of age were introduced in 2006.

Many businesses, including Rolls Royce, were concerned that using length of service as a criteria in redundancy selections would fall foul of age laws because it automatically puts younger workers in a weaker position.

But today the Court of Appeal, the UK’s second highest court, ruled that length of service can be used as one of a range of determining factors in redundancy selections.

Naomi Feinstein, an employment partner at Lovells, said the ruling would be a relief to employers, many of whom use length of service as a criteria for redundancy.

But Ms Feinstein added that the Court stressed that length of service was acceptable when used as one of a range of criteria and that businesses could not use today’s ruling as a licence to choose redundancies on that factor alone.

The decision will also benefit older workers who will now have an extra layer of protection against lay-offs. Unite, the trade union that represented the Rolls Royce workers, said older employees deserve this additional protection because if laid off, they were less likely to find new jobs in the current market.

At Rolls Royce, managers scored each worker under threat of redundancy against five categories – achievement, self-motivation, expertise, versatility and personal contribution.

The scores would then be used to select redundancies with lower scorers facing redundancy first.

But at the end of the assessment, workers were given an additional point for each year they had worked at Rolls Royce, the controversial criterion that led to today’s court case. Similar systems are used in many companies.

Rachel Dineley, a partner at Beachcroft, said: “This case is a win for many older employees but is no way an endorsement of the old fashioned ‘last in first out’ approach. On most cases such a policy would remain extremely difficult to justify.”

Derek Simpson, joint general secretary of Unite, 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.

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