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Caterham Redundancies and the Unlikely Connection between Employment and Libel Law

This article was first written for and published by LawInSport. Click here to view the original.


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 that:
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 facts.
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 damage.
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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