The Role of Seniority in Employment Law
The concept of seniority has a high level of importance in employment law. For example, if there is a conflict between a bona fide seniority system and an agreement to settle a discrimination claim, in all likelihood, the seniority system will take precedence. However, nothing in the law requires an employer to use seniority in making workplace decisions.
Source of Seniority Systems
At least in the private sector, most seniority systems are the result of collective bargaining. That is, a union and an employer agree to set up a seniority system. If there is no union, there is usually no seniority system.
Even if an employer sets up a seniority system without a union being involved, you need to remember that employee manuals aren't worth the paper they are printed on. Seniority systems set up by employers in employee manuals probably aren't binding on the theory, under the employment at will doctrine, can always change the policy unilaterally.
There is, otherwise, nothing in the law requiring an employer to use seniority as the basis for setting up work schedules, or making any other decisions in the workplace.
Benefits and Costs of Seniority Systems
An employer is well advised to use seniority as a basis for decision-making because it is usually, but not always, an objective and non-discriminatory way to make decisions. In other words, a seniority system may help an employer avoid bad feelings and workplace conflicts because of employee perceptions that the employer is making arbitrary or discriminatory decisions.
The primary disadvantage of a seniority system is it's inflexibility. A seniority system may also prevent an employer from placing its best people in slots where they would be most effective.
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