The Employment Law Firm Pinsent Masons recently polled 200 business and found that 37% were considering redundancies in the next six months, but 84% of them were unaware of the correct length time required to consult with employees.
28% of respondents were not aware that failure to consult employees could result in a penalty against the company, forcing it to pay up to 90 days’ salary for every affected employee.
These figures indicate that a number of businesses are leaving themselves exposed to claims if the redundancy process is not carried out properly. After the recent Budget, it was announced that redundancy pay would increase to £380 per week.
A recent judgement in the Court of Appeal ruled that using length of service as one of the criteria in redundancy selection is justified and is not unlawful age discrimination.
In the case of Rolls-Royce v Unite the Union, the court found that awarding points for years of service is not unlawful age discrimination against younger people, and may be considered a benefit for those with longer service. This upholds the earlier High Court ruling in October 2008.

The dispute arose when agreed redundancy criteria were renegotiated during redundancy talks. Rolls-Royce wished to stop using length of service as one of the criteria as they were worried about age discrimination against their young employees, while the union wanted to keep it as they said it protected older employees.
The court also agreed with Unite’s argument that even if the criteria resulted in indirect discrimination, this could be justified as a proportionate means of achieving a legitimate business aim.

Employers will welcome the decision because a successful appeal would have meant reworking many selection criteria to exclude length of service.