The Supreme Court has ordered oil company Esso Bermuda to compensate Alan Doughty Jr. for wrongfully dismissing him at the end of 1997.

And in his ruling Chief Justice Austin Ward has pointed out that Bermuda law does not require redundancy pay of employers.

Mr. Doughty sued Coral Petroleum Co. Ltd. (trading as Esso Bermuda) for damages amounting to $69,896.43, representing nine months salary in lieu of notice.

Mr. Doughty also sought, and obtained, a court declaration that he is a vested participant in the company pension plan, an order with respect to certain pension deductions, and, the reimbursement of $976.32 out-of-pocket expenses, interests and costs.

Esso Bermuda, which imports and wholesales petroleum products, is an affiliate of Esso Standard Oil SA Ltd. and/or the Exxon Corp., a multi-national organisation.

Mr. Doughty was operations manager for nearly ten years from April 1988 and had duties which included the ordering and storage of bulk fuel for the company, whose annual sales in Bermuda were estimated at $70 million.

For the final year and a half of his employment, he was also vice president and a director.

In October 1997, he was offered a newly-created position, terminal manager, as the company decided to eliminate the title of operations manager.

In declining the offer, Mr. Doughty wrote to the company that his experience with the required functions of the new position meant that too many duties were required.

And in evidence he stated the new job carried more administrative functions, had a lower reporting level and less responsibility and required more time and attention for the same salary. He regarded it as a demotion.

Last December, Esso terminated Mr. Doughty's employment, denying pension benefits because he was four months short of the ten year requirement. He was offered two weeks salary per year of credited service, two weeks pay in lieu of notice and a payment in lieu of owed vacation.

Further, Mr. Doughty was advised that his medical coverage would end at the end of the month and company life insurance coverage would end 30 days after his last day of employment.

Country manager Juan Alberto Herreramoro concluded by letter: "We wish you and your family well and thank you for your contributions to Esso Bermuda.'' That same day, Mr. Doughty refused to accept a refund of his contributions in the Retirement, Disability and Survivor Benefit Plan of $26,522.22.

Five days later, he refused a cheque for $24,258.99 in full settlement of all claims he had against the company other than the claims under the Retirement, Disability and Survivor Benefit Plan.

At 50 years old, Mr. Doughty began this January with his own office as an oil and engineering consultant in the areas of safety design and environmental remediation, earning $23,236.06 by June, and $35,751.06 by October.

In his ruling, the Chief Justice said Mr. Doughty was wrongfully dismissed, and his refusal of the new job of terminal operator was not unreasonable.

The Chief Justice said Mr. Doughty should have been given seven months notice, bringing his termination date after more than ten years with the firm, and making him eligible for continued participation in the Retirement, Disability and Survivor Benefit Plan.

"Thus,'' declared Chief Justice Ward, "the plaintiff is entitled to a deferred annuity or pension or, should he choose, a refund of his contributions and credited interest from the annuity fund.

"The offer of payment of two weeks salary in lieu of notice plus 18 weeks' salary in accordance with the Bermuda Employers Council (BEC) guidelines plus vacation pay, fell short of what the plaintiff was entitled to.

"There is no law in Bermuda requiring employers to make severance payments to faithful employees when, for whatever reason, their jobs cease to exist.'' He said the BEC guidelines (of two weeks per year compensation) were for employers, and therefore not surprisingly, were not generous to employees.

He said, "A multiplier of three rather than two would not have fallen far short of what the justice of the case requires.'' And on the pension issue, Chief Justice Ward wrote on Friday: "The value of a pension should not be underestimated and a long-time faithful employee should not be fired without just cause only months before his pension rights have become vested.'' He concluded: "The plaintiff's net salary for the period of seven months would have been $54,363.89. During that period, he earned from his consultancies $23,236.06, a difference of $31,127.83 which must be paid by the defendant (Esso).

"In addition, he is entitled to be reimbursed $976.32 out-of-pocket expenses.

The plaintiff continues to enjoy the use of a motor car brought with company funds and for which it is agreed that he must repay $15,000.

"I enter judgment for the plaintiff in the sum of $17,104.15 with interest and costs (or such other sum as may be found due after settling the account and for which purpose there is liberty to apply).

"I have already made the declaration that the plaintiff is a vested participant in the Retirement, Disability and Survivor Benefit Plan and the defendant shall pay into the funds its contributions on behalf of the plaintiff for the required period of notice.'' Mr. Doughty was represented in court by lawyer Andrew Martin of Mello, Hollis, Jones & Martin. Esso Bermuda was represented by lawyer Mark Diel of Diel & Myers.

COURTS CTS