Creer v P and O Lines of Australia Pty Ltd

The High Court of Australia considered the appeal in *Creer v P and O Lines of Australia Pty Ltd*. The dispute concerned the plaintiff's entitlement to certain payments under a contract of employment, specifically whether a payment made by the employer was a bonus or a payment in lieu of notice. The plaintiff had been dismissed from his employment and sought to recover what he contended was a contractual entitlement.

The central legal issue before the Court was the proper characterisation of a payment made by the employer to the employee upon termination of employment. The Court had to determine whether this payment constituted a bonus, which would not be recoverable in the circumstances, or a payment in lieu of notice, which would be a contractual entitlement. This required an interpretation of the employment contract and the surrounding circumstances of the payment.

The Court analysed the terms of the employment agreement and the conduct of the parties. It was held that the payment in question was not a bonus, as it was not discretionary and was made upon termination of employment. Instead, the Court found that the payment was made in accordance with the terms of the contract, which provided for payment in lieu of notice. The legal principle applied was that the nature of a payment is determined by the contractual terms and the circumstances in which it is made, rather than by the label the parties might choose to attach to it.

The appeal was allowed, and the plaintiff was entitled to the payment as a sum due under the contract.