The Court of Appeal has ruled that using a length of service (for example the last in first out principle) criterion in a redundancy selection matrix is lawful. In the case of Rolls-Royce Plc v Unite the Union  EWCA Civ 387, the Court of Appeal declared that whilst using the length of service criterion did constitute indirect discrimination, its use was objectively justified.
The Court held that the legitimate aim justifying the indirect discrimination was two fold:
• the maintenance of a stable workforce during a redundancy exercise; and
• rewarding loyalty.
It held that the means of achieving that legitimate aim were proportionate, because the length of service criterion was one of many criteria within the matrix and its use was consistent with principles of fairness.
This decision should provide some re-assurance that the use of length of service as a criterion will not automatically fall foul of legislation on age discrimination. However, the use of length of service is only likely to be viewed as a proportionate means of achieving a legitimate aim if it is one of a number of criteria used as part of a selection matrix. The use of length of service as the sole criterion, such as the last in first out principle, would be very ill advised.