Petrofac Offshore Management Ltd v Wilson (Contract of Employment : Wrongful dismissal) [2011] UKEAT 013_11_2009

EAT
Petrofac Offshore Management Ltd v Wilson (Contract of Employment : Wrongful dismissal)
[2011] UKEAT 013_11_2009 · 2011-09-20
[1]This is an appeal against a finding by an Employment Tribunal sitting at Aberdeen, chaired by Employment Judge Hosie, that the Claimant, the Respondent before us, was wrongfully dismissed and a consequent award of £8,889 by way of damages.[2]The Appellant company provides skilled crew to work on North Sea oil rigs. The Claimant was employed by it for many years until his dismissal with effect from 3 August 2010, in the following circumstances.[3]At all material times the Claimant worked on the Gryphon Alpha platform, operated by Maersk. The Health and Safety Executive required Maersk to be able to demonstrate the competence of all crew members working on the rig. It sought to give effect to that requirement by insisting that its contractors put in place a system called the Competent Person Profile (“CPP”) system. Under that system employees would have to complete paperwork designed to demonstrate their competence in the relevant areas. Accordingly, the Appellant in 2007 introduced a formal contractual obligation on all its employees to “participate in the CPP process if it is in use on their off-shore asset.” That obligation was stated in terms in its employee handbook, a copy of which was sent to all employees and which it is common ground had contractual effect.[4]The Claimant resented the introduction of the CPP process. He believed – we dare say entirely correctly – that there was no question about his personal competence, and he believed that it was unnecessary that he should have to demonstrate it by a lot of formal paperwork which proved nothing. He did not in any event think that the CPP was a good process, even if such a process were necessary at all. He described it as “not fit for purpose”. His attitude was apparently shared by several of the Appellant’s more senior and experienced employees on the Maersk platform, but in the end all of them except him were willing to engage in the process.[5]On 18 May 2010 the Gryphon Barge Master wrote to the Appellant to notify that the Claimant was not prepared to participate in the CPP. As he put it, he “… was adamant that he will not progress any CPP work at all, as he considers the CPP to be ineffective and it is not capable of demonstrating his true competence.” The Claimant had already told the Appellant’s operations manager, Mr Hardy, the same thing.[6]The Appellant felt obliged to initiate the disciplinary procedure. There was a disciplinary investigation meeting on 7 June. The Claimant maintained his position. Mr Hardy explained why, however competent the Claimant might in fact be, it was necessary to engage with the CPP process in order that that competence could be formally demonstrated. He was told that failure to participate would put his employment at risk, because he would be failing to comply with a reasonable instruction. It is convenient to note at this point that the Appellant’s handbook included a non‑exhaustive list of the types of conduct which might constitute gross misconduct and these included failing or refusing to obey a reasonable instruction issued by a supervisor or manager.[7]Following the meeting the Claimant was written to, setting dates for review meetings on 22 June and 27 July, by which time he should have completed 30 per cent and 60 per cent of the CPP process, and he was told that if he did not cooperate he was liable to dismissal.[8]The Claimant did not attend the review meeting on 22 June and made no effort to engage in the process. He was given a final written warning and told that he must meet the 60 per cent target by 27 July. The warning said in terms that if he did not do so “further disciplinary action will be taken up to and including dismissal.” He made no effort to comply with that either.[9]On 3 August there was a disciplinary meeting at which the Claimant was summarily dismissed. The following extracts from the notes of the meeting, set out at paragraph 33 of the Tribunal’s Reasons, give a flavour of the parties’ positions. “33. As Mr Wilson had still made no effort to progress his CPP, Petrofac convened a further Disciplinary Meeting on 3 August. Minutes of the meeting were produced (JI18). We were satisfied that they were reasonably accurate. The following are excerpts:- “BH — Don we have received a report from the Gryphon on 27 th July that has detailed your CPP is still at 17%, which means you have not achieved the objective as detailed in the letter of 13 th July requiring you to get to 60% before 27 th July. Are there any extenuating circumstances why you can not achieve this? DW — Because it’s a load of rubbish and it doesn’t display my competence. BH — It is part of your terms and conditions and a reasonable request that has been repeated many times by Client OIM, Client Barge Master, Petrofac Competence Adviser, myself and your employer (in writing). DW — I can’t see it in my T & Cs. BH — It’s in the Handbook and it’s a reasonable request. Based on that, we are releasing you on the grounds of gross misconduct, for failing to carry out a reasonable instruction by management. DW — Does that mean you are sacking me? BH — Further to discussion with POM, your employer, they have decided to release you from the Company effective today and shall not be paid any notice as its(sic) on the grounds of gross misconduct. DW — See you in court…………”[10]The Claimant was dismissed with immediate effect and the dismissal was confirmed by letter of the following day. The Claimant appealed, but unsuccessfully.[11]The Claimant commenced proceeding in the Employment Tribunal for unfair dismissal and wrongful dismissal. The claim for unfair dismissal was subsequently dropped, and the case proceeded accordingly for, in effect, the Claimant’s three-month notice entitlement. It came on for hearing in Aberdeen on 17 January 2011. The Appellant was represented by Mr Burnside of Paull & Williamsons. The Claimant appeared in person. He accepted before the Tribunal that he was in breach of contract, but he submitted that the breach did not constitute gross misconduct such as to justify summary dismissal.[12]The Tribunal’s decision was not unanimous. The Employment Judge took the straightforward view that the Appellant had deliberately - ‘wilfully’ was his term – refused to comply with a reasonable management instruction and that that constituted gross misconduct such that the Appellant was entitled to dismiss him summarily. The members took a different view, their reasons, as they appear in the written Reasons of the Tribunal, appear to be threefold. First, they believed that under the terms of the Appellant’s disciplinary procedures set out in the employee handbook, once it had embarked on the process of carrying out a disciplinary investigation and had given a final written warning, it was committed to giving notice of any eventual dismissal. Secondly, to quote from paragraph 57 of the Reasons:
“… The members were of the view that Mr Wilson should have been advised that if he did not comply with the CPP system he would be guilty of gross misconduct and would be dismissed summarily. He never was. This should have been spelled out to him in writing as the consequences were so different.”
Thirdly, at paragraph 58, the members are recorded as being of the view:
“[…] that Petrofac ‘could not have it both ways’. There was a ‘change of tack’ on its part after it had issued a final written warning. That ‘change of tack’, the members believed, was because Petrofac did not want to pay Mr Wilson in lieu of notice. It was the most cost effective way for Petrofac to dismiss him.”
[13]The Appellant has appealed against that decision. It is again represented by Mr Burnside and the Claimant has again appeared in person.[14]In our view the decision of the majority cannot be upheld and the minority view of the Employment Judge was plainly correct. We will take in turn the three points which we have identified.[15]So far as the first point is concerned, it depends on a misreading of the disciplinary procedure. The handbook does indeed provide, in the usual way, for a process under which an employee can be dismissed with notice in the case of misconduct or substandard performance, persisting after warnings. But it also explicitly and separately provides for “gross misconduct and summary dismissal”, making it clear that if, after a similar disciplinary process:
“… the company is satisfied that gross misconduct has occurred, the result will normally be summary dismissal, i.e. dismissal without notice or pay in lieu of notice.”
It is clear that it was the latter course which the Appellant followed in this case. It would indeed be remarkable if by committing itself to a careful disciplinary process and a final written warning, giving the Claimant every opportunity to reconsider his position, the Appellant should be taken to have disentitled itself from summarily dismissing him if he persisted in his refusal to comply with a reasonable management instruction.[16]As for the second point, we are bound to say that it is hard to see that there was any obligation as a matter of fairness to tell the Claimant in writing not only that he would be dismissed if he did not comply with the instruction in question but also that such dismissal would be without notice. The distinction between the two would hardly be likely to be a material consideration in the Appellant’s decision how to act. The important thing would be that he was losing his job. However, any employee, if he had thought about the point at all, would have appreciated that any dismissal at the end of the chain of events, might be without notice, since the handbook told him in terms that refusal to comply with a management instruction would be treated as gross misconduct and that dismissal for gross misconduct would be summary. We would add that in any event the majority’s approach seems to confuse wrongful and unfair dismissal. So far as the former is concerned, the only question is whether the employee has indeed committed a sufficiently serious breach of contract to justify his dismissal.[17]As to the third of the points relied on by the majority, it seems to us really to be an amalgamation of the two previous points that we have considered. We can see no “change of tack” on the part of the Appellant. It might or might not have been entitled to dismiss the Claimant, summarily or otherwise, at an earlier stage, but it chose to take the course it did, giving him every opportunity to reconsider, no doubt because it valued him as a senior and competent employee. But when he persisted in his attitude it finally had to exercise its unquestionable legal rights. We see no inconsistency in that approach. The fact that it was cheaper to dismiss him without notice than with notice is no doubt true and may or may not have entered into their consideration, but it is not a material point. If they were entitled to dismiss him summarily, they were entitled to dismiss him summarily, and that is the end of the matter.[18]Before us Mr Wilson has simply repeated, with evident sincerity, that he did not wish as a matter of principle to take part in a process which he regarded as not fit for purpose. But the fact is that it was for his managers to make the judgment as to the utility of the process, and in any event in the particular circumstances of this case they were largely in the hands of their own client, Maersk. There could be no doubt that this was a reasonable instruction. Even if Mr Wilson’s views about its utility are right, there was no prejudice to him in going through the process, whatever he happened to think of it.[19]At the end of the day this is a straightforward case where the Claimant persistently and deliberately, after clear warning, refused to comply with a reasonable management instruction. Gross misconduct may seem a harsh label for a man who is, as we repeat, entirely sincere in his views, but it is nevertheless a correct label in the circumstances of the case. The appeal must accordingly be allowed and the finding of wrongful dismissal and the award of damages must be set aside.