Be careful. This is unlikely to be valid if new workers taken on tend to be younger than older workers, as LIFO is then disproportionately affecting a particular sector of your workforce - ie younger workers - and is therefore discriminatory unless you can show that the application of LIFO is objectively justified.
Similarly, you risk trouble if you make some of your most recent recruits redundant, but hang on to others - unless you have additional criteria (also discussed in the consultation process) that justify the difference in treatment. For example, you might decide to make people redundant on a last-in-first-out basis, unless they have successfully completed a training programme.
LIFO is also likely to be discriminatory if it affects those in your workforce of a particular gender, race, sexual orientation, religious or philosophical belief or disability, unless it can be objectively justified.
You can select on the basis of performance, provided it is a genuine criterion. You would need to produce as much objective evidence as you could - for example, sales figures, productivity records, appraisals - to demonstrate that you are losing the people who make the least contribution to the business, rather than merely exercising favouritism. For example, you can't use ability to speak and understand English as a criterion unless it is essential to the job, and both native and non-native speakers would have to take the same tests.
