Beware of LIFO!
July 30, 2008
Recently I wrote about an age discrimination case relating to a redundancy that was quite complex. Another age issue relating to redundancies is the ‘last in, first out’ (LIFO) option that many companies resort to when handling this situation.
There have been many cases concerning the LIFO option, the outcomes of which have often been contradictory, however it was until recently widely felt that this is a safe choice when making redundancies. Now though, it must be remembered that the youngest employees are much more likely to be dismissed due to this reason, because they have had less time in employment to build up a longer length of service. Companies will probably only be at risk of a discrimination claim if it is clear that the profile of the workforce means that most LIFO victims will be younger workers, however LIFO should be applied with caution.
Another reason to only use LIFO if there is absolutely no other option is that when you are losing a proportion of the workforce, you ideally wish to keep the most effective and promising employees, and these may be the last ones in. Clearly, the most appropriate way to handle redundancies is to look at what is needed strategically, find a fair way of measuring this with more than one measurable, and apply the formula properly. This will leave the company with the best workforce to carry the business forward, and will also give the fairest treatment to those losing their employment, which will in turn mean that the ones left behind will have more faith in the employer going forward.
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