Petrofac Offshore Management Ltd v Wilson

An employee’s persistent and deliberate refusal to comply with a reasonable management instruction may amount to gross misconduct justifying summary dismissal, even where the refusal is based on a sincere belief that the instruction is unnecessary or ineffective.

A careful disciplinary process, including a final written warning, does not ordinarily prevent an employer from dismissing summarily if the employee continues the serious breach. In a wrongful-dismissal claim, the central question is whether the employee committed a sufficiently serious breach of contract. Considerations relevant to fairness or the employer’s financial motive do not alter that contractual question.

The employer required offshore employees to participate in a Competent Person Profile process, pursuant to a contractual provision in its employee handbook. The employee repeatedly refused to participate, despite explanations, warnings and a final written warning. He was summarily dismissed for gross misconduct.

He brought proceedings for wrongful dismissal, claiming three months’ notice pay. The Employment Tribunal’s lay majority found that he should have been dismissed with notice and awarded damages. The Employment Judge dissented, holding that the deliberate refusal to obey a reasonable instruction justified summary dismissal. The central issue before the Employment Appeal Tribunal was whether the refusal constituted a sufficiently serious contractual breach.

1. Appeal allowed. The finding of wrongful dismissal and the award of damages were set aside.
2. The handbook distinguished ordinary misconduct and substandard performance from gross misconduct and summary dismissal. Its disciplinary procedure did not deprive the employer of the right to dismiss without notice after a final written warning. It would be remarkable if giving an employee a careful process and an opportunity to reconsider disentitled the employer from summarily dismissing him when he persisted in refusing a reasonable instruction.
3. There was no separate requirement, as a matter of fairness, to warn expressly in writing that dismissal would be without notice. The handbook stated that refusal to obey a reasonable management instruction could constitute gross misconduct and that gross misconduct would normally result in summary dismissal.
4. The Tribunal majority had confused wrongful dismissal with unfair dismissal. In a wrongful-dismissal claim, the question was whether the employee had committed a sufficiently serious breach of contract to justify dismissal without notice.
5. The instruction was reasonable. The managers were entitled to assess the utility of the certification process, and the employer was substantially required to operate it by its client’s requirements. The employee’s sincere disagreement with the process did not excuse his refusal, particularly where participation caused him no prejudice.
6. Persistent and deliberate refusal, after clear warnings, to comply with the reasonable instruction properly constituted gross misconduct and justified summary dismissal. The possibility that dismissal without notice was cheaper, or that the employer could have acted earlier, was immaterial.

• Employment Tribunal, Aberdeen: By a majority of the lay members, the employee was found wrongfully dismissed and awarded £8,889, representing three months’ notice pay. The Employment Judge dissented.
• Employment Appeal Tribunal: The appeal was allowed. The majority decision and award were set aside.