Caterham redundancies and the unlikely connection between employment and libel law

Published 19 August 2014 | Authored by: Nicholas Goodfellow
It is rare for the areas of employment and libel law to become interlinked, but in the world of sport, one should perhaps expect the unexpected. It is an old adage in sport that attack is the best means of defence. That is the approach that the Caterham F1 team (“the Team”) seems to have taken, when faced with the announcement that over 40 of its former staff who were made redundant (“the Affected Staff”), plan to sue for unfair dismissal.

The statement by the Affected Staff

A recent statement released on behalf of some or all of the Affected Staff stated inter alia that1:
 
The summary dismissal of employees from Caterham was done without warning or consultation and will result in significant compensation claims against the team.
 
Caterham has also reneged on promises that the employees would at least be paid in July. Lawyers for the group will take immediate action…"
 

Caterham’s response

The response from the Team was prompt and emphatic, the very next day describing the statement by the Affected Staff as a gross misrepresentation of the facts2
 
The Team’s statement explains that it is taking legal action for the damages suffered by the Team as a result.  The Team takes issue with two aspects of the statement by the Affected Staff:
  1. the claim that the staff had been released by the Caterham F1 team, as opposed to a different entity, which is said to employ the staff; and
  2. the claim that the staff were not paid in July.

 

Both statements are said by the Team to be incorrect.  On the payment issue, the Team states that:
 
Every individual currently employed by Caterham F1 Team was paid their July salary in full on 25th July, one week before it is formally due on the last day of the month, in this case 31st July…
 

Potential legal action

This author does not know what precise form the legal action referred to will take, but presumes for present purposes that it will be alleging that the statement by the Affected Staff is libelous.
 
As to that, it may be observed that it is hard to see how the precise identity of the employing entity would lower the Team in the estimation of right thinking members of society generally…(as required in establishing libel).  Surely this is merely a technical point. 
 
Having said that, if the statement by the Staff was incorrect in this respect, it was perhaps unfortunate not to draw that distinction.
 

Non-payment statement

The statement that the Team did not pay the Affected Staff in July could be more of an issue. 
 
It is likely to be fairly easy to discern whether such a statement was true or not.  The unequivocal nature of the statement by the Team suggests that there is no doubt it was not. 
 
If untrue, it is perfectly conceivable that it could be concluded that such a statement was defamatory.  Employers are generally expected to pay their staff what they are due.
 
If a person has been libeled without any lawful justification or excuse, the law presumes that some damage will flow in the ordinary course of events from the mere invasion of his right to his reputation, and such damage is known as 'general damage'. Thus, a claimant in a libel action is not required to prove his reputation, nor to prove that he has suffered any actual loss or damage3.
 
This is where the real sting in action by the Team against the Affected Staff could lie.  Proving actual damage would probably be very hard indeed.
 

A tactical advantage moving forward

This writer does not know whether the claims made by the Affected Staff based on their redundancies have strong merit, or not.  But it may be that any strength in those claims may now have to be balanced against the action which the Team intends to bring based on the press statement.   
 
It may well be that the balance of truth lies somewhere in between what has been stated on both sides, as is often the case in legal disputes.  Only time will tell, as these issues get addressed in detail. 
 
But it could be that the Team has gained a tactical advantage by going on the attack when placed in a defensive position.  It has certainly acted quickly.  Maybe we should not be surprised given that sport with which we are concerned is F1.





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About the Author

Nicholas Goodfellow

Nicholas Goodfellow

Nick specialises in commercial and employment litigation. Nick is a keen sportsman, and has acted in a variety of sports related disputes. Nick has acted for a racehorse trainer claiming unpaid fees and defending allegations of professional negligence, and for a senior executive of a leading football club.

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