Age Discrimination, LIFO and Redundancy - The First Test
In this article, Stephen Finn, our employment lawyer, discusses some of the, perhaps unexpected, consequences of last year's Age Discrimination Legislation, including the impact they have had on some previously widely accepted practices.
Age Discrimination has been in the air for some years now. The Regulations that came into force on the 1st October 2006 were not therefore a surprise.
However the impact they have had, both before and after the 1st October, has raised a few eyebrows. There is another law, the law of unintended consequences, which, although it has never been enacted by a British Parliament, has affected many of the laws produced by that body. It has not had a greater effect on any law, I think, than the Employment Equality (Age) Regulations 2006.
Before the Regulations came into force, anecdotal evidence suggested that there was a mass cull of employees aged fifty and over. On the face of it these are exactly the people the law was brought in to protect - but they lost their jobs because of the impending regulations.
Even following the introduction of the Regulations, it appears that it is, again, the older employee who can find himself in a worse position than before.
In mid October 2006, a few days after the new law came into force, HR Advantage was approached by a small company with less than ten employees which needed to make one or two of its employees redundant. An audit was taken. One of the employees had special skills which the company needed; but the others all did the same job. The remaining six could not be distinguished on their efficiency, their skills, or their disciplinary record. The only two objective criteria which were of assistance in deciding which of the employees should be selected for redundancy were length of service and attendance record.
Prior to 1st October 2006, indeed for just about all the time that unfair dismissal has been a feature of employment law, employees have frequently been selected for redundancy on the basis of Last In First Out, or LIFO. It is an easily understood method. It is, admittedly, arbitrary; but it fits in with the British psyche. We all understand how a queue works and the fact that if you are the last one to join it you might not get onto the next bus.
Mark Shortell, of HR Advantage, believed, though, that LIFO was potentially discriminatory under the Age Regulations. Simply put, the older you are the more likely you are to have longer service. Selecting people who have less service is more likely to discriminate against younger people. Discrimination against younger people on grounds of age is just as bad as discriminating against older people.
HR Advantage's clients were therefore advised to select using attendance records. This meant that an employee who had been in post for three months only was retained at the expense of an employee who had been there for fifteen months.
The aggrieved employee made an application to the Tribunal. The employee and HR Advantage were facing what could turn out to be a test case. Would the Tribunal say that the employer was wrong to use attendance only as the criteria? Was HR Advantage's interpretation of the Regulations and the effect of their, perhaps unintended, consequences correct?
In fact the Tribunal held that the selection criterion used was perfectly reasonable and reasonably applied. There was no unfair dismissal. A good result for the employer - perhaps not so good for those of us over the age of fifty!
If you have questions about applying the Employment Equality (Age) Regulations in your organisation, in whatever situation, then please give us a call on 01494 451681.
