Non negotiable offers at the expense of breaking contract

We have heard of companies firing people during recession or bad times, but does any one has heard of company firing people during good times? I had seen few cases in my previous organization related to this. A person with 6 years of IT experience joined the company with great aspirations. He was acting as a team leader and was very good in handling his work. He also made few revolutionary changes for the betterment of the application. After around 1 year, he was given an onsite opportunity. He refused the opportunity owing to family reasons and also had some location constraints as the client was in Arab country. He was a permanent employee and according to contract he has to be given a notice before firing him, but the company gave him a non negotiable offer of either to go onsite or resign immediately and leave, irrespective of all the good work done by him. Also a condition was put if he resigns he has to vacate the flat immediately which was allotted to him on subsidized rate by the company. The person resigned finally and was extremely disappointed, but didn't knew what to do. This incident shows that companies do not consider anything when it comes to their profit, irrespective of external conditions good or bad.