Where an employee refuses to work, employers can terminate their employment save where the employee has a legitimate reason for doing so such as on the grounds of official strike action, a failure to make reasonable adjustments or health and safety grounds. Employers though are still obliged to follow a fair procedure if they are to dismiss the employee, so they may need to investigate the matter and will certainly need to carry out a disciplinary meeting and give the employee a right of appeal.
Footballers though are a unique employee with a capital value in the form of a potential future transfer fee to their employer club. If Manchester City did terminate Tevez's contract they may well seek to pursue him for the loss of that potential transfer fee. Chelsea did the same with Adrian Mutu when they terminated his contract in 2004 and were awarded over £14m in damages. However, the Mutu situation was slightly different in that he was banned from playing for any club. It remains to be seen what Manchester City will do. You can see further comment from Peter Holt on the BBC website here.