Earney v Australian Property Investment Strategic Pty Ltd

The case of Earney v Australian Property Investment Strategic Pty Ltd involved the plaintiff, who was employed as the Chief Financial Officer of the defendant, a property investment company. The plaintiff was entitled under the contract of employment to receive 12 months' salary if terminated following a change of control of the company. Following a change of control, the plaintiff was removed from the position and offered alternative positions within the company. The plaintiff disputed the adequacy of these alternatives and sought to be paid the 12 months' salary as well as other entitlements under the contract. The court was required to determine whether the defendant's conduct amounted to a repudiation of the employment contract, whether the plaintiff was entitled to payment in lieu of notice, and whether the plaintiff was entitled to other contractual entitlements.

The court examined the nature of the alternative positions offered to the plaintiff and whether they were of equivalent status and responsibility to the position of Chief Financial Officer. The court considered the authorities and held that the alternative positions did not meet the required standard. The court found that the defendant's conduct amounted to a repudiation of the employment contract, as the plaintiff was effectively demoted without justification. The court also found that the plaintiff was entitled to payment in lieu of notice and other contractual entitlements, including any outstanding salary and benefits. The court applied the principles set out in Whittaker v Unisys Australia Pty Ltd and distinguished the case of Easling v Mahoney Insurance Brokers.

The court ordered the defendant to pay the plaintiff the 12 months' salary as well as other entitlements arising under the employment contract, including payment in lieu of notice. The court also ordered the defendant to pay interest on the outstanding payments and the plaintiff's costs of the proceeding. The court's decision provides guidance for employers and employees in the context of change of control clauses in employment contracts and the consequences of a repudiation of the employment contract.