The employer appealed. The Court of Appeal based its decision upon construing the contract according to its terms. The Court held that the contract in the Sears case was clear. By their agreement the parties expressly accepted that the value of the superannuation benefit to Mr Sears was to be included as part of the remuneration package. In terms of those contractual arrangements, remuneration must be distinguished from salary.
Remuneration includes two components, base salary and benefits.
A superannuation benefit was therefore not considered to be a deduction from salary. The Court of Appeal held that the Employment Courts decision was wrong in two respects. First, contrary to the clear terms of the contract of employment, it treated the superannuation benefit as a deduction from salary. Secondly, the Employment Court wrongly perceived the payment made by the Audit Office into the Fund as relating to the funding of past employees presently receiving benefits from the Scheme. In fact the employers payment was a notional employer contribution paid to the Crown Receipts Account.