The Spanish Supreme Court has ruled that an employer was not entitled to compensation for damage to its reputation and public image, after allegations that the owner of the business had harassed another employee were squarely rejected at Tribunal.

This case arose out of earlier proceedings in the Spanish Labour Courts in which Ms Lucia claimed that her ex-boss (and owner of the business), Mr Manuel, was a tyrant and a bully and had forced her “with menaces” to sign her resignation letter. She also claimed that one of the other managers had sexually harassed her. All of her claims were rejected at Tribunal, as there was insufficient evidence to support them. The Tribunal did not, however, go so far as to say the allegations were false.

Unhappy about the damage Ms Lucia’s allegations had caused to his personal and professional reputation, Mr Manuel issued proceedings against her in the civil courts claiming compensation for damage to his reputation/and that of his company. His claim was unsuccessful. The Supreme Court held that in this case the right to freedom of speech had to be protected over Mr Manuel’s right to protect his personal honour and the public image of his company, especially as the allegations of harassment had not been shown categorically to be false, but simply unproven. It pointed out that the allegations had been made in the protected context of a Tribunal claim, and were not insults for the sake of it.

In practice employers cannot stop employees making such allegations, even if they are subsequently unproven. The important point about this case is that unless the allegations turn out to be false (knowingly), there will be no remedy for employers or other employees who may have suffered damage to their reputations as a result. If, however, the allegations had proved to be false, or if the claim had been made maliciously, Mr Manuel could potentially have had a claim for costs against Ms Lucia in Tribunal.