Total Mauritius Limited v Abdurrahman

In employment law, a breach of an employee’s duty not to compete ordinarily starts as faute grave, but the classification remains fact-sensitive. A long and unblemished record is relevant, yet it cannot by itself reduce disloyal competition to faute sérieuse. The court must weigh the employee’s service against the role held, access to the relevant market, the closeness and seriousness of the competition, non-disclosure, prospective financial benefit, and conduct during the disciplinary process. Where the combined circumstances make the breach fundamental, the dismissal is for faute grave. On the accepted statutory framework, that removes entitlement to wages in lieu of notice and severance allowance, including under sections 32(1)(b) and 35(1) of the Labour Act 1975.

A senior employee responsible for developing LPG sales held half the shares in a family company. That company, without disclosure to the employer, sought to sell compatible regulators to the employer’s principal distributor. The Industrial Court dismissed his claim for wages in lieu of notice and severance allowance. The Supreme Court upheld the dismissal as justified but treated the misconduct as faute sérieuse and awarded compensation at the normal rate. The Privy Council had to decide whether that categorisation was open on the facts and whether the employee’s long unblemished service displaced faute grave.

1. Disposition. Lord Wilson delivered the judgment of the Board. The appeal was allowed, the Supreme Court’s order was set aside, and the orders of the President of the Industrial Court were restored, including the order for costs. The respondent was ordered to pay the appellant’s costs before both appellate courts.

2. Statutory framework. The Board accepted that the distinction between faute sérieuse and faute grave was legally material, although it was not expressly stated in the Labour Act 1975. It noted that section 34 provided for severance allowance, section 36 governed its amount, and section 36(7) provided for the punitive rate where termination was unjustified. Section 35(1) excluded severance allowance where dismissal was pursuant to section 32(1)(b), which permitted dismissal for misconduct where the employer could not in good faith take another course. The Board identified, but did not resolve, the resulting difficulty concerning the statutory basis of the intermediate category of faute sérieuse.

3. Applicable principles. An employee’s duty not to compete with the employer arises from the obligation to perform employment obligations loyally and in good faith. The starting point is that a breach is faute grave, although some breaches may fall short of that level. The decision in Harel Frères Ltd v Jeebodhun 1981 MR 189 showed that long service is relevant but does not by itself negative faute grave. The approach in Soriété de Gérance de Mon Loisir v Ootim 1991 MR 64 likewise required strong combined mitigating factors where the misconduct was serious.

4. Assessment of misconduct. The Supreme Court had relied only on the employee’s more than 27 years of unblemished service. It was required to set that factor against the full circumstances informing blameworthiness, including:

   • the employee’s senior role and responsibility for developing LPG sales;
   • his particular knowledge of that market;
   • his undisclosed 50% shareholding in a family company competing in the same area;
   • the approach to the employer’s principal distributor and the offer of the same compatible regulators;
   • his likely financial benefit and apparent failure to assure the disciplinary committee that the competing activity would cease.

5. Those circumstances made the breach of the duty of non-competition fundamental. Even against the long unblemished record, it could not reasonably be categorised as anything other than faute grave. It was materially more serious than the misconduct considered in Mandary v State Informatics Ltd 2013 SCJ 396, which had been categorised as faute grave.

• Privy Council: In [2015] UKPC 45, the Board allowed the appeal, set aside the Supreme Court’s order and restored the Industrial Court President’s orders.
• Supreme Court of Mauritius: Allowed the employee’s appeal from the Industrial Court, upheld the dismissal as justified, but categorised the misconduct as faute sérieuse and ordered payment of wages in lieu of notice and severance allowance at the normal rate.
• Industrial Court: On 11 March 2011, dismissed the employee’s claim for wages in lieu of notice and severance allowance at the punitive rate.