COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM
Sir Thomas Morison, sitting as a deputy judge of the
High Court on 17th October 2008
Strand, London, WC2A 2LL
B e f o r e :
LORD JUSTICE WALL
LORD JUSTICE AIKENS
| ROLLS-ROYCE PLC
|- and -
|UNITE THE UNION
Peter Edwards (instructed by Messrs Rowley Ashworth - Solicitors) for the Respondents
Hearing date: 22nd January 2009
Crown Copyright ©
Lord Justice Wall :
A determination of the law on redundancy selection under the Employment Equality (Age) Regulations 2006 (the Regulations). The (company) requires the court to consider and determine whether the inclusion of length of service within a selection matrix for redundancy situation would be in breach of the Regulations and therefore unlawful.
(i) Is the retention of length of service as a criterion within a selection matrix for redundancy, as contained within the collective agreements relating to the Claimant's Derby and Hucknall sites, a proportionate means of achieving a legitimate aim within Regulation 3(1) of the Employment Equality (Age) Regulations 2006?
(ii) Can the service related selection criterion properly be classified as a "benefit" within Regulation 32(1) of those Regulations? If so, does the service related selection criterion "fulfil a business need of (the company's) undertaking" within Regulation 32(2) of the Regulations?
It will be immediately apparent that the questions which relate to achievement or fulfilment of legitimate aims or business needs are ones which, in the employment context, would normally and desirably be determined by 'an industrial jury' namely an Employment Tribunal or the Employment Appeal Tribunal (EAT). I sit as a single Judge without the benefit of the advice and wisdom which the lay Members of those Tribunals bring to questions of the sort being asked. Despite my misgivings, at the request of both counsel, I was pressed to proceed to a determination under Part 8 of the CPR. There are no issues of fact to be determined; there has been no oral evidence. I have been provided with witness statements on behalf of both parties which, essentially, set the scene for the resolution of their disputes. With considerable misgivings, I acceded to the request of both parties.
1. I remain uneasy about the procedure
2. This is clearly an important point for the parties.
10. The short argument in relation to Part 8 of the CPR is that if an Employment Tribunal (ET) had been asked to consider this point, it would have been interested to hear evidence from the union side as to whether such a provision could be described as a benefit for this purpose, and then, whatever the answer to that question, to consider whether the appropriate justification test had been met.
11. On a wider and possibly more important issue raised by this claim, the court has been asked to determine either whether a service criterion is, by its very nature, discriminatory in every case, or whether this provision in this collective agreement is discriminatory in its own context.
12. I would submit that if the court is being asked the first question it should decline to answer it. Despite the fact that the ACAS code is not positive about such criteria, it is important to note that the legislators have made potential discriminatory provisions like this lawful if they can be justified. If the court were being asked the first question the (company) would be asking it to say that a service criterion of this kind could never be justified. I would respectfully submit that the court should not be answering such a sweeping question in Part 8 proceedings.
13. Alternatively, if the court were being asked the second question, namely whether the provision in this case is discriminatory in context, it should refuse to deal with the application purely on the basis that the "context" in this situation includes the whole factual background to these agreements, the effect in this workplace of this criterion, the age breakdown of the workforce itself, the purpose of such a provision, the impact of such a provision in conjunction with the other redundancy selection criteria and a host of other questions which would assist an ET in assessing whether the provision was justified.
Should we hear the appeal? The case for the company
(1) there was a dispute between the parties;
(2) the dispute arose from specific facts which were already in existence;
(3) the dispute was still alive; and
(4) the determination would be of some practical consequence to the parties.
(a) the declaration would affect an issue of concern to a large number of employees: "The fact that declaratory relief will benefit a significant section of the public is clearly a matter which the court will take into account in deciding how to exercise its discretion" (Zamir & Woolf at 4.192);
(b) the declaration would guide the future conduct of the parties. Mr. Bowers relied on Dyson v The Attorney-General  1 Ch 158, in which this court had held that a declaration might be granted where it would "guide (their) action in the future" per Cozens Hardy MR at 166. Similar sentiments had been expressed by Fletcher Moulton LJ at  1 Ch 158 at 167.
(a) the company effectively risked a substantial penalty if it was found to have been acting in a discriminatory manner in that a series of successful age discrimination aims could be brought; and
(b) as in Dyson, the question raised affected a substantial number of people and therefore had wide implications.
the courts have always recognized that persons interested are or may be indirectly prejudiced by a declaration made by the court in their absence, and that, except in very special circumstances, all persons interested should be made parties before a declaration by its terms affecting their rights is made.
(i) the union had negotiated and entered into the collective agreements on behalf of those individual employees covered by the agreements at Derby and Hucknall (and union density is and was at all material times very high). All employees who were covered by the relevant collective agreements were subject to the same application of the length of service criterion contained within the collective agreements. As had been accepted orally by counsel for the union those employees would be covered by the agreements whether or not they were members of the union;
(ii) the union did not argue before Sir Thomas Morison that it should not be the sole Defendant, nor that individual employees should be Defendants.
(iii) although he did not set this out within a judgment (the matter having been listed before him as a Pre-Trial Review after having been adjourned to him by Master Leslie), Bean J. had also considered that the union should be the defendant and not individual employees. During the course of argument, junior counsel's note recorded Bean J as saying:
"It is clearly right that the tribunal cannot hear an action for a declaration and the High Court is the only place where questions of this kind can be resolved. In principle it needs to be (the company) seeking the declaration and I agree that (the union) should be Defendant. (The union) accepts that it is as good a defendant as any. The Court should take a pragmatic view";
(iv) the issue of whether or not the length of service criterion contained in the collective agreements was potentially indirectly discriminatory was exactly the same in each individual employee's case for the reasons already developed in oral argument. No individual employee could have any additional or different arguments as to that issue (although the impact on each may vary). Therefore, the issue could be (and had been) properly investigated and argued in a case involving the union alone as defendant;
(v) as the court was already aware, the union was protected by the company against any adverse financial consequences of these proceedings: in other words, the company had agreed to pay the union's costs;
(vi) individual employees would thus not be prejudiced by an order made in their absence, because it was difficult to envisage that there were additional arguments that could be made had they been joined to the claim.
(vii) it was clear that the union would welcome a determination of this important point and had not opposed the company's method of proceeding.
Should we hear the appeal? The case for the union.
Should we hear the appeal? Discussion
The use of CPR Part 8
Should be hear the appeal? General principles
It has always been a fundamental feature of our judicial system that the courts decide disputes between the parties before them; they do not pronounce on abstract questions of law when there is no dispute to be resolved.
Different considerations may arise in relation to what are called "friendly actions" and conceivably in relation to proceedings instituted specifically as a test case.
Having received this judgment in draft, counsel are agreed that this is a declaratory judgment, that it is not necessary to make a formal declaration, and that for substantive purposes this judgment is all that is needed.
My Lords, in my opinion, the House should decline to hear this appeal on the ground that there is no issue before us to be decided between the parties. I do not think that it would be a proper exercise of the authority which this House possesses to hear appeals if it occupies time in this case in deciding an academic question, the answer to which cannot affect the respondent in any way. If the House undertook to do so, it would not be deciding an existing list between the parties who are before it, but would merely be expressing its view on a legal conundrum which the appellants hope to get decided in their favour without in any way affecting the position between the parties.
What is sometimes called a "friendly action" is not necessarily open to this objection, either in the first court or on appeal, for the respective parties in such an action are arguing for different results and the winner gains something which he would not gain if he lost, but the objection here is that, if the appeal fails, the respondent gains nothing at all from his success.
22. Mr. Harrison explained that the appeal was being brought by the local authority as a 'test case' to obtain clear guidance urgently needed from this court concerning the interpretation of statutory provisions relating to the special guardianship procedures. The Appellant was a major local authority with a substantial case load of litigated child care cases. It had a legitimate interest in bringing proceedings to obtain clarification of provisions and procedures affecting an increasing number of cases.
23. Mr. Harrison submitted, accordingly, that a point of principle was involved. Due to the importance of the points which arose, therefore, Mr. Harrison invited us to rule on them.
24. Having heard further argument and considered the matter, we came to the conclusion that we would hear the appeal. We did so because we accepted that the points raised in this appeal are important and would be likely to arise again in any event. In practical terms, counsel on all sides had come to court prepared to argue the appeal. We accept, furthermore, that the local authority was taking a principled stance by implementing paragraph 4 of the judge's order whilst, at the same time, seeking permission to appeal against it. Having heard full argument, we reserved judgment.
We were therefore anxious to continue hearing the appeal if we possibly could, so as to comply with the entreaties of all the parties who appeared before us. To send them away empty-handed on an issue of such importance seemed to be not only churlish but also in breach of the overriding objective which illuminates all civil court practice today.
14. The contemporary practice of both the House of Lords and this court to permit interventions in private litigation when discrete points of statutory construction are causing great difficulty in a way that was not contemplated when Ainsbury v Millington was decided has created a new scenario within which to consider a point of this kind (compare Callery v Gray  EWCA Civ 1117,  1 WLR 2112, CA;  UKHL 28,  1 WLR 2000, HL, where there were many interveners in this private law litigation).
15. If it is in the public interest for this court to decide an important and difficult point of law arising out of the interpretation of a recent statute, when both the parties to the case and three interveners of the status of those who appeared before the court are anxious that the court should do so, it is in our judgment unnecessary for the court to resort to artificial devices on which to found its jurisdiction.
34. Thus the court was of the view (in Bowman v Fels) that, even though the litigation was private, if it was in the public interest to entertain the appeal, the court would be free to do so. This seems to me at bottom to be the correct approach. However, although as has been observed several times, the case involved public law duties, I do not read it as limiting the exception to each case, provided that the hearing of the appeal is in the public interest.
36. Finally, in Bowman v Fels the court paid tribute at  to the discussion of the problem by Professor Zuckerman in the 2003 edition of Civil Procedure at paragraphs 23.139 to 23.145. In the more recent second edition of Civil Procedure (2007) Professor Zuckerman said this at paragraph 23.148.
"In sum, the hearing of appeals that are no longer determinative of the rights of the parties will depend on whether the matter is of general public interest and whether entertaining an appeal is the most effective way of resolving the issue and promoting the overriding objective."
This consideration of the cases leads, in my opinion, to the conclusion that the court will not entertain an appeal between private parties in private litigation unless it is in the public interest to do so. Moreover, this is likely to be a very rare event, especially where the rights and duties to be considered are private and not public. Indeed, so far as I am aware, if we permitted this appeal to proceed, it would be the first case in which the court had ever considered such an appeal, since (as stated above) Bowman v Fels was a case involving an issue of public law.
37. All will depend upon the facts of the particular case and in what follows I do not intend to be too prescriptive. However, such cases are likely to have a number of characteristics in addition to the critical requirement that an academic appeal is in the public interest. They include the necessity that all sides of the argument will be fully and properly put: see e.g National Coal Board v Ridgeway, per Bingham LJ at page 604f and Bowman v Fels at  and . It seems to me that in the vast majority of such cases, this must involve counsel being instructed by solicitors instructed by those with a real interest in the outcome of the appeal. As Waller LJ observed in the course of the argument, it is far from satisfactory simply to have counsel (or other advocate) advancing such arguments as occur to him without the benefit of instructions from an interested party or group of some kind. Further, before giving permission the court will wish to consider what the other options are and how the proposed issues could otherwise be resolved without doing so by way of academic appeal.
Should we hear the appeal? Conclusion
The substantive appeal
(1) is the length of service criterion in the collective agreement indirectly discriminatory within regulation 3(1)(b)?
(2) what is meant by "benefit" in regulation 32?
(3) is the use of the length of service criterion a proportionate means of achieving a legitimate aim within regulation 3(1)?
(4) (depending, of course, to some extent on the meaning of the word "benefit" in regulation 32(1)) does it reasonably appear to the company that its use of the length of service criterion fulfils a business need of the company's undertaking (the proportionality point in relation to regulation 32)?
The collective agreements
To define the arrangements associated with a manpower rationalisation programme, which will enable manpower levels to be correctly balanced to workload and cost requirements.
As a first stage in a management rationalisation programme, and after consultation has taken place with the Unions, Management will accept suitable volunteers offering themselves for selection in order to minimise the number of compulsory job losses.
3. REDEPLOYMENT AND REDUNDANCY ROCEDURE
The stages for achieving the required manpower reduction will be as follows:
3.3. Volunteers will be sought, for redeployment or redundancy, from all staff employees and will be listed by Business Unit……
3.12 If the company concludes that it is unlikely sufficient volunteers will be found by the given date it will notify all employees, within an Occupation Group in the affected Business Unit that there is a risk of redundancy and that an assessment against the assessment matrix will be carried out.
3.13 Assessors must have significant knowledge of the work of the people they are required to assess to satisfy themselves that they can give a fair assessment. Normally the period of assessment should not be more than 2 years unless there are significant factors outside that period which the Assessors wish to consider.
3.17 All individuals who, as a result of the application of the matrix, are identified as "at high risk to redundancy" will be notified of this by letter (the "high risk" letter). Either at the time this letter is issued or subsequently, but prior to the appeal stage, individuals "at high risk" are entitled to informal face to face feedback on their scores. This will include their own detailed assessment rating, together with the highest and lowest scores given to anyone in the relevant Occupation Group in the relevant Business Unit and they will be consulted as to their individual position.
4. ASSESSMENT MATRIX
4.1 The matrix has been designed to ensure that the selection process is fair in general terms and fair to the individual. The matrix should be completed by at least two Assessors, one of whom should be in the Management Structure. At least one of the Assessors must have a good knowledge of the individuals concerned and the work they perform. The assessment should be made in the presence of the local experienced Human Resources Officer, to ensure validity and consistency.
4.4 Where two or more employees in a surplus Occupation Group have the same total assessment score, length of service with the Company will be the deciding factor and the longest serving employee will be retained.
4.5 Selection for redundancy on grounds of race, sex, disability, membership of a Trade Union, or carrying out Trade Union or Health and Safety duties is prohibited. Assessment of recognised Trade Union Representatives should be discussed with the local Human Resources Manager, in the first instance, who will ensure there is not adverse assessment due to Trade Union activities.
The review is an independent examination of the assessments to ensure that they are accurate and consistent. Accuracy will be checked in the areas of;
- the correct continuous years of service being allocated the correct number of points,
- the correct / recorded number of episodes of unauthorised absence in the defined period leading to the correct number of points being deducted,
- all points being given to an employee being correctly added to make their total score.
Consistency will be looked for / sought in all sampled employee matrix assessments, particularly where different Assessors appear to have used the scoring categories differently. More simply, they will be looking for Assessors who appear to be either "hard or soft" in their scoring, to ensure that fairness and consistency have been applied to all employees rated by such Assessors.
Any employee assessments that appear to have anomalies within the assessed scores for any or all of the five behavioural categories, will be subject to additional scrutiny or possible re-review by the original Assessors.
It is the aim of this Agreement to ensure that in the event of a redundancy, the Company's Business suffers the minimum disruption and maintains a workforce that is appropriate to meet its future operational needs, whilst compensating employees for the loss of employment in a manner reflecting their years of service.
There does not, however, appear to be anything else of relevance in the amended agreement.
The Council Directive 2000 / 78 / EC of 27 November 2000 (the Directive)
(1) In accordance with Article 6 of the Treaty on European Union, the European Union is founded on the principles of liberty, democracy, respect for human rights and fundamental freedoms, and the rule of law, principles which are common to all Member States and it respects fundamental rights, as guaranteed by the European Convention for the Protection of Human Rights and Fundamental Freedoms and as they result from the constitutional traditions common to the Member States, as general principles of Community.
(4) The right of all persons to equality before the law and protection against discrimination constitutes a universal right recognised by the Universal Declaration of Human Rights, the United Nations Convention on the Elimination of All Forms of Discrimination against Women, United Nations Covenants on Civil and Political Rights and on Economic, Social and Cultural Rights and by the European Convention for the Protection of Human Rights and Fundamental Freedoms, to which all Member States are signatories. Convention No 111 of the International Labour Organisation (ILO) prohibits discrimination in the field of employment and occupation
(5) It is important to respect such fundamental rights and freedoms. This Directive does not prejudice freedom of association, including the right to establish unions with others and to join unions to defend one's interests.
(11) Discrimination based on religion or belief, disability, age or sexual orientation may undermine the achievement of the objectives of the EC Treaty, in particular the attainment of a high level of employment and social protection, raising the standard of living and the quality of life, economic and social cohesion and solidarity, and the free movement of persons.
(29) Persons who have been subject to discrimination based on religion or belief, disability, age or sexual orientation should have adequate means of legal protection. To provide a more effective level of protection, associations or legal entities should also be empowered to engage in proceedings, as the Member States so determine, either on behalf or in support of any victim, without prejudice to national rules of procedure concerning representation and defence before the courts.
The purpose of this Directive is to lay down a general framework for combating discrimination on the grounds of religion or belief, disability, age or sexual orientation as regards employment and occupation, with a view to putting into effect in the Member States the principle of equal treatment.
Concept of discrimination
1. For the purposes of this Directive, the 'principle of equal treatment'shall mean that there shall be no direct or Indirect discrimination whatsoever on any of the grounds referred to in Article 1.
2. For the purposes of paragraph 1:
(a) direct discrimination shall be taken to occur where one person is treated less favourably than another is, has been or would be treated in a comparable situation, on any of the grounds referred to in Article 1;
(b) indirect discrimination shall be taken to occur where an apparently neutral provision, criterion or practice would put persons having a particular religion or belief, a particular disability, a particular age, or a particular sexual orientation at a particular disadvantage compared with other persons unless:
(i) that provision, criterion or practice is objectively justified by a legitimate aim and the means of achieving that aim are appropriate and necessary.
Justification of differences of treatment on grounds of age
1. Notwithstanding Article 2(2), Member States may provide that differences of treatment on grounds of age shall not constitute discrimination, if, within the context of national law, they are objectively and reasonably justified by a legitimate aim, including legitimate employment policy, labour market and vocational training objectives, and if the means of achieving that aim are appropriate and necessary. Such differences of treatment may include, among others:
(a) the setting of special conditions on access to employment and vocational training, employment and occupation, including dismissal and remuneration conditions, for young people, older workers and persons with caring responsibilities in order to promote their vocational integration or ensure their protection;
(b) the fixing of minimum conditions of age, professional experience or seniority in service for access to employment or to certain advantages linked to employment;
(c) the fixing of a maximum age for recruitment which based on the training requirements of the post in question or the need for a reasonable period of employment before.
Discrimination on grounds of age
3. (1) For the purposes of these Regulations, a person ("A") discriminates against another person ("B") if—
(a) on grounds of B's age, A treats B less favourably than he treats or would treat other persons, or
(b) A applies to B a provision, criterion or practice which he applies or would apply equally to persons not of the same age group as B, but—
(i) which puts or would put persons of the same age group as B at a particular disadvantage when compared with other persons, and
(ii) which puts B at that disadvantage,
and A cannot show the treatment or, as the case may be, provision, criterion or practice to be a proportionate means of achieving a legitimate aim.
(2) A comparison of B's case with that of another person under paragraph (1) must be such that the relevant circumstances in the one case are the same, or not materially different, in the other.
(3) In this regulation—
(a) "age group" means a group of persons defined by reference to age, whether by reference to a particular age or a range of ages; and
(b) the reference in paragraph (1)(a) to B's age includes B's apparent age.
DISCRIMINATION IN EMPLOYMENT AND VOCATIONAL TRAINING
Applicants and employees
7. — (1) It is unlawful for an employer, in relation to employment by him at an establishment in Great Britain, to discriminate against a person—
(a) in the arrangements he makes for the purpose of determining to whom he should offer employment;
(b) in the terms on which he offers that person employment; or
(c) by refusing to offer, or deliberately not offering, him employment.
(2) It is unlawful for an employer, in relation to a person whom he employs at an establishment in Great Britain, to discriminate against that person—
(a) in the terms of employment which he affords him;
(b) in the opportunities which he affords him for promotion, a transfer, training, or receiving any other benefit;
(c) by refusing to afford him, or deliberately not affording him, any such opportunity; or
(d) by dismissing him, or subjecting him to any other detriment.
GENERAL EXCEPTIONS FROM PARTS 2 AND 3
Exception for provision of certain benefits based on length of service
32. —(1) Subject to paragraph (2), nothing in Part 2 or 3 shall render it unlawful for a person ("A"), in relation to the award of any benefit by him, to put a worker ("B") at a disadvantage when compared with another worker ("C"), if and to the extent that the disadvantage suffered by B is because B's length of service is less than that of C.
(2) Where B's length of service exceeds 5 years, it must reasonably appear to A that the way in which he uses the criterion of length of service, in relation to the award in respect of which B is put at a disadvantage, fulfils a business need of his undertaking (for example, by encouraging the loyalty or motivation, or rewarding the experience, of some or all of his workers).
(3) In calculating a worker's length of service for these purposes, A shall calculate—
(a) the length of time the worker has been working for him doing work which he reasonably considers to be at or above a particular level (assessed by reference to the demands made on the worker, for example, in terms of effort, skills and decision making); or
(b) the length of time the worker has been working for him in total;
and on each occasion on which he decides to use the criterion of length of service in relation to the award of a benefit to workers, it is for him to decide which of these definitions to use to calculate their lengths of service…….
(7) In this regulation—
"benefit" does not include any benefit awarded to a worker by virtue of his ceasing to work for A.
Clearing the ground
Sir Thomas Morison's view
14. I start with Regulation 3. I agree with Mr Edwards of counsel, for the Union, that Rolls-Royce have defined the policy behind the Collective Agreements too narrowly. If employers were unconstrained by concepts of fairness to their staff, they would choose to retain those members of staff whom they considered to be best for the business. Subjective judgments would be made and people chosen on the basis, for example, that they would fit in to the new workforce. The concept of fairness introduced over 30 years ago limited, and to some extent prevented, the employers' unconstrained freedom of choice. Redundancy policies were developed, often in conjunction with recognised trade unions. The Collective Agreements relating to redundancy in this case represent a compromise negotiated between the Employers and Union. As they make clear, the Union is in principle opposed to compulsory redundancy. That is because the Union sees its role as the protector of the staff from the unconstrained powers of the employer to run his business as he will. The Union wishes to protect those whom they represent from being put onto the labour market.
15. The Collective Agreements represent a compromise between them. It is in both parties' interests that a redundancy exercise, if such is needed, is carried out in a way which is perceived as fair and can be executed "peaceably". In my Judgment, this is a legitimate business aim. It is an aspect of a "legitimate business policy" within the meaning of Article 6 of the Directive. The fact that the parties have achieved a peaceable transition following redundancy does not necessarily mean that Rolls-Royce have achieved their defined business aim, although it seems to me that length of service is likely to be a fair indicator of both loyalty and experience which might not be fully taken account of in the measurement process. Had the Court been concerned with a Scheme which was LIFO (last in first out) alone then that might be objectionable; but this is not such a case. It seems to me that the parties have adopted a scheme which enables the employer to succeed in a defence to an age discrimination claim under Regulation 3: the legitimate aim is the advancement of an employment policy which achieves a peaceable process of selection agreed with the recognised Union. The criterion of length of service respects the loyalty and experience of the older workforce and protects the older employees from being put onto the labour market at a time when they are particularly likely to find alternative employment hard to find.
16. But, in any event, it seems to me that this case falls squarely within Regulation 32. The 'award of any benefit' is not constrained as the employers suggest. The words are general. In a redundancy selection matrix it seems to me clear that to give points for long service does confer on the employee concerned a benefit. Just as it might lead to an increase in holiday entitlement, which Rolls-Royce would describe as the award of a benefit, so it might lead to the retention of employment which would otherwise be lost. To remain in employment whilst others lose their jobs would be properly described as a benefit. To have the benefit of long service is a normal use of language.
17. Regulation 32(2) simply requires the employer to justify the impact of an age related award only to those employees whose length of service exceeds 5 years. It seems to me significant that Parliament contemplated that a length of service criterion might reasonably appear to an employer to encourage loyalty or reward experience. Where there is an agreed redundancy scheme, negotiated with a recognised Trade Union, which uses a length of service requirement as part of a wider scheme of measured performance, it is probable in my judgment that such would be regarded as reasonably fulfilling a business need.
18. In my Judgment, therefore, Rolls-Royce are wrong in their contention that the length of service criterion in the Collective Agreements is unlawful as a result of the Age Regulations.
The attack on the judgment
The case for the action
(1) the length of service criterion was but one of many considerations involved in the overall fairness of the redundancy selection process; other provisions also took age and length of service into account. It was not being suggested that these were discriminatory;
(2) it was important that the length of service criterion was contained in a collective agreement between the company and the union: - see Loxley v BAE Systems  ICR 1347 at paragraph 42 of the decision of the EAT and the decision of the ECJ in Palacios de le Villa v Cortefiel Services SA  IRLR 989; the courts should as a matter of policy uphold such agreements;
(3) there was no evidence that use of the length of service criterion in the redundancy selection process was in any way detrimental to the company's business;
(4) the unchallenged evidence from the union was that younger employees understood why longer serving members received what had been described in evidence as "this benefit";
(5) regulation 32 provided both an exception to the application of parts 2 and 3 of the regulations and set a different, and arguably less onerous test. The word "benefit" in regulation 32 was not to be construed restrictively. It was properly to be interpreted as meaning "an advantage" – this accorded with its dictionary definition. The inclusion of the length of service criterion was thus plainly a "benefit" within regulation 32. It was moreover, wholly objective;
(6) the examples given in regulation 32(2) could equally be applied to the retention of the selection criteria based on length of service. Such provision were amongst the most effective to encourage / reward loyalty and reward experience;
(7) the court should give substantial weight to the evidence put in on the union's behalf. In particular, Mr. Stokes had said: -
"It is the case that certain age or service related contractual provisions will be highly valued by a union that has obtained benefits by collective bargaining. This is not because a Trade Union has any built in desire to benefit older workers. However (the union) like other Trade Unions does put a great deal of value on provisions that legitimately and proportionately reward loyal service or which give protection to older workers. Benefits of this kind are negotiated in the knowledge that all workers are likely to benefit from them at some future point."
"The other side of the coin is that a company that employs a service criterion in this way will also benefit those workers who have stuck with the employer the longest. The Age Regulations refer themselves to the reward of loyalty as being a business aim, providing (the company) in my view, with a ready justification for retaining the service criterion";
the court should thus hold that the inclusion of the length of service criterion was perhaps the most effective way of rewarding and encouraging loyalty;
(8) The length of service criterion was not a blunt tool. It was not a LIFO approach. It was one of a balanced set of criteria;
(9) this court should follow and apply Cadman;
(10) if the court was against the union on the meaning of the word "benefit" the service related criterion could, nonetheless, be justified on the basis that it was a "proportionate means of achieving a legitimate aim". As legitimate aims, the union relied on the encouragement / reward of loyalty; the protection of the oldest and thus most vulnerable members of the workforce; the reward of experience and the promotion of good industrial relations. Older employees inevitably found it more difficult to find other employment. The statutory redundancy scheme provides higher redundancy payments for those over 41, and for those with longer service. These provisions have not been changed by the regulations;
(11) the union also supported the reasons given by the judge.
Discussion and conclusion
LORD JUSTICE AIKENS:
Some more background.
Exercise of the Court's jurisdiction in this case to grant declaratory relief in the context of an action brought under CPR Part 8.
The substance of the appeal: the questions to be answered.
"…nothing in Part 2 or 3 of the Regulation shall render it unlawful for a person ("A"), in relation to the award of any benefit by him, to put a worker ("B") at a disadvantage when compared with another worker ("C"), if and to the extent that the disadvantage suffered by B is because B's length of service is less than that of C."
The construction of Regulation 32(1)
The effect of Regulation 32(2)
LADY JUSTICE ARDEN:
Article 2 of the directive and regulation 3 of the 2006 regulations
"it must reasonably appear to [the employer] that the way he uses the criterion of length of service, in relation to the award in respect of which [the employee] is put at a disadvantage, fulfils the business need of his undertaking (for example, by encouraging the loyalty or motivation, or rewarding experience, of some or all of his workers)."
Note 4  AC 435 at 501. Lord Diplock stated: “…for the court to have jurisdiction to declare any legal right it must be one which is claimed by one of the parties as enforceable against an adverse party to the litigation, either as a subsisting right or as one which may come into existence in the future conditionally on the happening of an event”. [Back] Note 16 See the decision of the ECJ in: R on the application of The Incorporated Trustees of the National Council of Ageing (Age Concern England) v Sec of State for Business, Enterprise and Regulatory Reform:  EUECJ C – 388/07, particularly at para 52. [Back]
Note 4  AC 435 at 501. Lord Diplock stated: “…for the court to have jurisdiction to declare any legal right it must be one which is claimed by one of the parties as enforceable against an adverse party to the litigation, either as a subsisting right or as one which may come into existence in the future conditionally on the happening of an event”. [Back]
Note 16 See the decision of the ECJ in: R on the application of The Incorporated Trustees of the National Council of Ageing (Age Concern England) v Sec of State for Business, Enterprise and Regulatory Reform:  EUECJ C – 388/07, particularly at para 52. [Back]