Background The time-out procedure is a critically important communication interaction for the preservation of patient safety in the surgical setting. While previous research has examined influences shaping the time-out procedure, limited information exists on how actual time-out communication is performed by multidisciplinary surgical team members in the clinical environment. Methods An institutional ethnographic study was undertaken. The study was conducted over three hospital sites in Melbourne, Australia. In total, 125 healthcare professionals from the disciplines of surgery, anaesthesia and nursing participated in the study. Data were generated through 350 h of observation, two focus groups and 20 semi-structured interviews. An institutional ethnographic analysis was undertaken. Results Analysis revealed healthcare professionals adapted the content, timing and number of team members involved in the time-out procedure to meet the demands of the theatre environment. Habitually, the time-out procedure was partially completed, conducted after surgery had commenced and involved only a few members of the surgical team. Communication was restricted and stifled by asynchronous workflows, time restrictions, a hierarchical culture and disinclination by surgeons and anaesthetists to volunteer information and openly communicate with each other and nurses. Healthcare professionals became normalised to performing an abbreviated time-out procedure. Conclusions Patient safety was relegated in importance as productivity, professional and hierarchical discourses configured the communication practices of surgical team members to limit active, open and direct communication. Examining how the time-out procedure was conducted in the clinical environment enables possibilities to emerge for facilitating compliance with hospital and WHO guidelines.