Unfairly barred from contracting? Petrofac just paid the price

It must be nearly Christmas, as a court has found in favour of an unfair dismissal claim from a would-be contractor who was effectively stopped from contracting.

That’s the key takeaway of Mr M Moore v Petrofac Facilities Management Ltd, writes Naseerah Mussa, consultant at employment law firm Chartergates.

What is Moore v Petrofac Facilities Management all about?

Matthew Moore, a former condition monitoring specialist at Petrofac, won the unfair dismissal claim after an employment tribunal determined that the energy sector services provider unreasonably blocked his attempts to take on freelance work.

That unreasonable blockage by Petrofac, which designs, builds and operates energy facilities, ultimately led to Mr Moore’s forced resignation, an employment tribunal (ET) in Scotland ruled.

‘Basic,’ but still running into the many thousands of pounds

Moore was awarded a “basic award” --  some £17,040.

But that £17k is in addition to an unknown compensatory amount which will be determined (potentially at a remedy hearing if the two parties cannot agree between themselves).

In this interesting case, there were a significant number of claims put forward. However, the key claims are addressed below. 

Moore V Petrofac: The facts and what happened at tribunal

Mr Moore’s initial breach of contract claim related to his attempted uptake of freelance consultancy work. 

On December 21st 2022, Petrofac employee Mr Moore emailed the company following an end-of-year review, with a request to undertake freelance consultancy work.   

Petrofac denied Mr Moore’s initial request for this external, “secondary employment” in January 2023.

‘Data Science, AI, and Machine Learning? That’s the same as what you do for us’

The refusal was based on Petrofac’s argument that Moore’s proposed provision of consultancy services in Data Science, Artificial Intelligence (AI) and Machine Learning, overlapped with his duties at the company.   

The email stated that the view of Petrofac was that the freelance work was a conflict of interest, set to interfere with the performance of Mr Moore’s role. He was told that the proposed freelance role relating to AI, Data Science and Machine Learning was “the same role as you’re currently fulfilling.”

Disagreement, declaration, and (an alleged lack of) detailed information

Mr Moore did not agree with this emailed conclusion from his employer and asked for a further review.  The company agreed to a Microsoft Teams meeting, and Mr Moore followed this up with an email reiterating his disagreements with the decision.  

On January 23rd 2023, the Petrofac compliance team advised Mr Moore that he had to complete a “conflict of interest declaration” using an internal tool. 

The declaration was completed by Mr Moore and following the submission, the company accepted that there may not be a conflict of interest.

However, Petrofac outlined that they could not make a full assessment as Mr Moore did not provide “detailed information” from the proposal regarding the potential clients who would be interested in, or take up, his freelance services. 

Which three pieces of prospective client-information did Petrofac want from Moore?

Petrofac explained that their employee would need to disclose three aspects for the approval of his line manager. The three were:

-         name of client;

-         type of work; and

-         potential timescale.

It was stated by Petrofac that without details of the client, duration, and the work, it would be unable to assess fully if a conflict of interest existed.

Furthermore, the company stipulated that “no work” should be undertaken by Mr Moore in a freelance capacity until it had been approved. 

The single case of 17 unrelated freelancing requests that got refused

In some cases that Mr Moore came forward with, the requests to freelance were for companies in industries that Petrofac did not have an interest in.

For example, 17 of the requests in March 2023 related to water companies. 

For each request, Mr Moore had to inform his line manager of the information relating to the freelance consultancy work. And for each of those individual requests, a decision would be made.

Unnecessary conditions on contractor hopefuls = no choice but to resign

The ET judge concluded that Petrofac breached the contract it held with Mr Moore by blocking his requests to engage in secondary freelance consultancy work – which included imposing unnecessary conditions on his proposals, which left him with no choice but to resign from Petrofac. 

He was, in effect, forced out.

Furthermore, the tribunal found that Mr Moore’s role at Petrofac (as the company’s “Global Subject Matter Expert”) did not include Data Science, AI or Machine Learning. Nor were any of these three areas listed in his job description. 

Where the ET did and didn’t find in Moore’s favour

By unanimous decision, the tribunal found that Mr Moore’s external contracting work request was unreasonably refused by Petrofac, and there was no risk of any conflict of interest. 

Yet in front of the ET, Mr Moore also alleged that there was a breach of contract due to a salary reduction, whereby in April 2020, he suffered a 10% pay cut which the company cited was necessary due to the then-ongoing pandemic.

Mr Moore continued to accept the pay cut up until he resigned.

The tribunal, therefore, by unanimous decision, rejected his contractual breach claim. 

He also brought complaints that he had been subject to detriments and automatically unfairly dismissed by reason of making “protected disclosures.” 

The tribunal rejected claims from Mr Moore that he was fired for such “whistleblowing.” The ET also concluded that it was not in the public interest to pursue this point of the claim.

What Moore vs Petrofac means for other would-be contractors

Published on November 18th 2024 after it was handed down by Employment Judge Nicol Hosie, this ruling underscores the unreasonable stance taken by Petrofac.

The ET found that the company unreasonably withholding its consent for him to carry out the freelance work resulted in Mr Moore, an employee of 20 years, resigning. Put another way, it was due to the unfair restrictions that had been imposed on him concerning the uptake of freelance work that he had “no option other than to resign”.  

Employment Judge Hosie’s ruling also serves as an important reminder for those wishing to take up side gigs, or freelance consultancy work, to ensure that they are aware of the contractual obligations between themselves and their employers. 

Further implications, including for employers

Equally, unless an at least £17k payout and a record of unfair dismissal in their name sounds appealing, employers must not unreasonably withhold employee requests to take up secondary work, notably work that is external and of a freelance, contract nature.

Away from this ruling but informed by it, our hope for 2025 is that organisations heed this warning, not least because making the jump to contracting, quite apart from having to operate and then succeed as a freelance contractor, can often be challenge enough.