Employee Status for Ministers of Religion?

The traditional position that Ministers of religion could not be “employees” for the purposes of employment protection legislation such as the recent Employment Rights Act 1996 (“ERA”) had been affirmed in cases such as Davies and Presbyterian Church of Wales 1986, The President of the Methodist Conference v Parfitt CA 1984, and the Diocese of Southwark and Others v Coker 1998. In the latter case the view of the Employment Tribunal (“ET”) Chairman, when Dr Coker an assistant Curate made a complaint to the Croydon ET of unfair dismissal against the Church of England, was, allowing Dr Coker’s claim, that “the relationship between a Curate and his God is a matter separate from his relationship with his Church. I have great difficulty in seeing why the spiritual nature of his work should preclude the existence of a contract of employment”. Overruling the Employment Appeal Tribunal (“EAT”), and holding that Dr Coker was not an employee for Employment Law purposes, the Court of Appeal ruled that there was no binding contract between Dr Coker and the Bishop as there was no intention to create legal relations. Similarly, in October 1995 the Norwich ET ruled against the Reverend Kit Chalcraft, a Church of England Minister, who had been dismissed after announcing his intention to marry for a third time. The Reverend Chalcraft complained to the ET hoping for a Reinstatement Order; they decided that they had no jurisdiction to hear his complaint, and agreed with the Bishop, that Reverend Chalcraft was an office holder with a licence to minister, rather than an employee for the purposes of unfair dismissal, although Perkin v St George’s Charitable Foundation EAT 2005 affirms that “it is of course trite law that a person may be both an office holder and an employee”, as does the House of Lords in the case of Reverend Percy and The Church of Scotland 2005.

The more widely reported case of the Reverend Ray Owen, who unsuccessfully in the High Court in April 2000 sought to obtain a judicial review of the decision taken by his Bishop not to renew his appointment as Rector of Hanley in Stoke on Trent, is interesting, as it provides clues as to MEPs’ views about Ministers who seek recompense through the Courts for civil matters. There, the Reverend Owen presented a petition to the European Parliament following a decision from the High Court, that although the Bishop had not followed proper procedures set out in Reverend Owen’s contract it was clear that exactly the same decision would have been reached had the right procedures been followed. Although the European Parliament voted in favour of a resolution “urging all parties to this dispute to resolve their differences in the spirit of reconciliation and understanding which is the way of the Church, and which corresponds to the basic principles on which democracy is founded and preserved within the European Union”, they accepted that “members of the clergy should enjoy the same human rights as other citizens of the European Union” and they acknowledged that common and ecclesiastical law “fail to provide essential rights to the clergy to which they should be entitled, notably the right to a fair and public hearing by an independent and impartial tribunal in cases of dispute.” They further added that they accepted the arguments that it was not always appropriate “to afford certain types of workers – such as the clergy and elected representatives – the same fora for redress as other economically dependent workers.” They noted that no breach of EU law had taken place.

Two new important cases dawning in the Courts and ETs, presaged possible changes in the traditional position that Church clergy should be regarded as servants of God rather than of man. In the first of those cases, in December 2005, the House of Lords, decided that the relationship between the Church of Scotland and The Reverend Helen Percy, constituted “employment” for the purposes of the Sex Discrimination Act 1975 (“the SDA”). Although, the relationship was not considered in the context of unfair dismissal, the House of Lords held that the relationship did constitute “employment” for the purposes of s 82 (1) of the SDA, which gives a wider meaning to “employment” than applies to unfair dismissal questions under the ERA. “Employment” under the SDA is defined as “employment under a contract of service or of apprenticeship or a contract personally to execute any work or labour” whereas, the more restrictive definition of “employee” under the ERA is: “an individual who has entered into or works under (or,  where the employment has ceased, worked under) a contract of employment” ERA s 230 (1). Reverend Percy’s case was that she suffered sex discrimination at the hands of the Church by, she claims, it effectively forcing her to resign after she was said to have had an affair with a married individual in her parish. She argued that the stance that the Church adopted and the action they took against her had not been the same as that taken against male ministers, who were known to have had extra marital relationships. Although Reverend Percy dropped her earlier claim for unfair dismissal, two of the five Law Lords suggested that the traditional position of Ministers not being regarded as employees for the purposes of unfair dismissal might need to be reconsidered; Lord Nicholls of Birkenhead stated that in his view “it is time to recognise that employment arrangements between a church and its ministers should not lightly be taken as intended to have no legal effect and, in consequence, its ministers denied [this] protection”.

A reconsideration of the traditional position occurred in October 2006 where it was held that a Minister of the New Testament Church of God based in Harrow, North West London, was an “employee” of that Church within the meaning of the ERA and could properly claim unfair dismissal. The Court of Appeal agreed with the Employment Appeal Tribunal and found also that Reverend Stewart was an “employee” for the purposes of unfair dismissal. The relevant facts are that Reverend Stewart was ordained and carried out duties as a Minister of the Church, and for his particular Church in Harrow, indeed Lord Justice Pill commented that “the duties as pastor at Harrow were found to be substantial, although a discretion in the manner of performance was present, as would be expected. The standards to be expected of a pastor, and guidelines as to what the pastor was expected to do, are set out in the minutes. There was an obligation to report regularly to the national office”. The duties of the Minister in question, that is his work in Harrow, were very particularly controlled by that Church. Although ETs have regularly held that whether tax and NI arrangements are not determinative of employment, a side issue in Stewart was that he was receiving payment through the Church’s payroll system on a PAYE basis. The Court carefully considered that Percy almost reversed the traditional thinking of the relationship of a Church with its Ministers and held that in Reverend Stewart’s case, the financial arrangements and duties of Reverend Stewart provided for sufficient mutuality of obligation for a contractual employee/employer relationship. They concluded that what follows from Percy as guidance for ETs is, that the presumption that for Ministers of religion there is no intention to create legal, contractual relations should be largely ignored, and the ET’s role is to fact find as to whether a contract existed and if that contract is or was a contract of employment. In Stewart, the Court of Appeal explored the application of Article 9 of the Human Rights Act with regard to the respect that must be given to the faith and doctrine of the particular church, but nevertheless found in Reverend Stewart’s favour holding that “if the relationship between church and minister has many of the characteristics of a contract of employment in terms of rights and obligations, these cannot be ignored simply because the duties are of a religious or pastoral nature”.

That said, each faith and relationship between Ministers and Churches will vary greatly and each case will be determined on its own facts. The case of Stewart highlights the need not to ignore the potential for a contractual relationship between Minister and Church, and the many characteristics of an employee relationship that that has, simply because the individual is engaged in providing services of a religious kind. Contrary to popular belief the decision in Stewart does not have the result that all Ministers of Religion are simply now employees. The decision was as a result of the particular facts of that case. Lord Justice Pill explained that the ruling “does not involve a general finding that ministers of religion are employees. Employment Tribunals should carefully analyse the particular facts, which will vary from church to church, and probably from religion to religion, before reaching a conclusion”.

Undeniably, many Ministers relationships with their Church are factually similar to that of employee and employer. The guidance is that for each relationship, the Church, and an ET, should look very carefully at the circumstances, for instance the arrangements for salary/stipends, the control which the individual has over their own work, the disciplinary procedures adopted by the Church and the organisation generally of the Church. One particular matter which ET’s will consider in detail for the purposes of finding whether or not a contract existed, is the consideration given by both parties. For most Ministers, the consideration from each side would seem apparent. In exchange for performing objectives set by the Church many Ministers will receive remuneration and accommodation. However, for the Brothers and Sisters of Religious Orders, who take vows of poverty, and adopt a way of life when they become a member of their particular Order, the consideration provided by each side then is not so similar to that of an employee and employer relationship. That said, the position of those members of Religious Orders who accept positions within schools and other institutions particularly where they are remunerated by a Local Authority or other body is likely to be that of an employee. What is not known is how far case law will change the employment rights of Ministers in general, and of those Religious Order members if at all for them. How far also will the ET and the Courts go in ascribing certain ways of life as contractual relationships of employment? Witham Weld which with Pothecary and Barratt was a predecessor firm of PWW, acted in the interesting unreported case of Reverend Father M and the Governors of a Catholic Missionary Institute in 1983, where a Roman Catholic Priest and member of a Catholic religious order who worked as a Maintenance Manager of the Institute but whose salary was paid to his Order, successfully made a complaint of unfair dismissal to the ET against the Institute. The ET held on the particular facts of that case, being the existence of a job description, the references made by the Institute to Father M’s “employment”, and generally as a result of the “control of the Institute and his working hours and duties [as] defined by the respondents”, that Father Magill was an employee. The Tribunal “did not consider that the applicant’s acquiescing in the payment of most of his remuneration to the [Order] negated the employee relationship”. The position for Roman Catholic Diocesan Priests may raise difficulties. Although sometimes their salaries should they chose to take one maybe capped say at £10,000 and most receive much less than that, similar to other Ministers such salaries could be interpreted as being consideration for services that they provide on behalf of the Church Trustees to their parishioners, and again it is not impossible that the relationship between a Priest and their Diocese could be interpreted as a contract of employment.

For the Methodist Church, the above recent cases will be of interest, although the 1984 case of The President of the Methodist Conference v Parfitt, where Pothecary & Barratt represented the Church, may be of more interest as it concerns specifically the Methodist Church, although it does pre date the important Percy case. In Parfitt, the Court of Appeal, when upholding the Methodist Conferences’ appeal against decisions by the ET and EAT for Mr Parfitt, correctly explored whether he had a contract at all with the Church and whether that contract if found could properly be said to be a contract of service, and whether the doctrinal standards of the Church could give rise to a binding contract. Although the case is arguably historic the Court conclusion that Ministers set out to serve God, and that it could not be held that at the point of ordination or any point thereafter that the Minister is entering or has entered into any kind of contract to serve God or the Church, and therefore no employee/employer relationship arose, is not over ruled in Stewart. With regard to the characteristics of a contract of service, Lord Justice Dillion explained that “it is not practicable to lay down a hard and fast list of what is required to constitute a contract of service . . . . . . None the less the Courts have repeatedly recognised what is and what is not a contract of service and I have no hesitation in concluding that the relationship between a church and a minister of religion is not apt in the absence of clear indications of a contrary intention in the document, to be regulated by a contract of service.” The Court also took the view that no doubt binding contracts between the Methodist Church and its Ministers existed for instance the compulsory superannuation scheme, but decided that those did not form any part of a contract for service, either when on entry into full connexion or on appointment to a particular circuit. Lord Justice Dillion also took the view that no doubt contracts of service exist between the Methodist Church and individuals such as “secretaries or caretakers”, however he claimed that because of Mr Parfitt’s “spiritual position and functions as a Minister” he was in a “very different position” from those persons employed by the Church or any Circuit under a contract of service. The Parfitt case, although particular to the Methodist Church, must be read in light of the more recent cases of Percy and Stewart – it remains to be see what effect those decisions will have on Methodist Ministers, and indeed other Church ministers. Since the cases, particularly that of Stewart, have been reported in the mainstream press, Churches, might see an increasing number of Ministers making ET applications. It will be then for an ET to fact find and apply law such as Parfitt, Percy and Stewart to the particular set of circumstances before them.

Possibly for reasons of natural justice some Churches, particularly the Church of England, are moving towards accepting that Ministers are and should be granted the employment protections afforded to employees. Although Section 23 of the Employment Relations Act 1999 refers only to rights under the ERA, the Employment Relations Act 2002, the ERA 1999, and does not cover the discrimination legislation, unless that legislation has been made under s 2 (2) of the European Communities Act 1972, such as the SDA, the Church of England are nevertheless largely recommending that the Government use the power it has under section 23 to grant employment rights to clergy. A meeting of the Church of England General Synod in February 2005 debated the issue and “welcomed the recommendation that Employment Rights under the Employment Relations Act 1999 Section 23 be granted to all clergy.” Furthermore, in April 2007 the second Church Estates Commissioner Sir Stuart Bell confirmed that legislation has been drafted as to terms and conditions of service for ministers but that legislation will not be ready before 2009.

Some Ministers of religion, and their unions, argue that the absence of employment law rights mean that more draconian treatment is exercised when disciplining, and that often the lack of an independent body or forum results in disputes simply not being heard or thoroughly investigated. If Ministers’ positions are terminated they often lose their job, their licence to work, their home, which they argue is a harsher outcome than that experienced by other employees unfairly dismissed. Some are of the view however, that for Ministers of the Christian faith, the understanding when they join the Ministry is that they will follow in the footsteps of the Apostles, leaving behind them worldly matters, including civil protections such as employment law rights. To seek financial or other recompense for what they view to be a wrong doing against them and seeking to argue that a binding, contractual, commercial relationship exists between them and their Church or their God almost contradicts the basis upon which they join or should join their Church.

If more decisions in favour of Ministers are made, then other matters such as Ministers rights under the Working Time Regulations, rights not to work on Sundays under Section 23 of the Employment Relations Act 1999 and whether the necessary continuity of employment, required for unfair dismissal claims, can include time spent in other parishes and Churches, will all no doubt be aired.

11 July 2008