In Sharpe v The Bishop of Worcester  EWCA Civ 399 the Court of Appeal had to decide whether a Church of England rector, who had brought claims in relation to unfair dismissal and whistleblowing, was an employee or a worker or neither.
Reverend Sharpe was rector of the parish of Teme Valley South in the diocese of Worcester from 8 January 2005 until 7 September 2009, when he resigned. He claimed that he had been unfairly dismissed, having made a number of protected disclosures, and that he had suffered detrimental treatment as a result of making those disclosures. He pursued claims against both the Worcester Diocesan Board of Finance (DBF) and the Bishop of Worcester. To bring his claims he needed to show that he was an employee for the purpose of his unfair dismissal claim and/or a worker for the purpose of his whistleblowing claim.
Employment tribunal decision
The employment tribunal (ET) found that there was no contract, whether express or implied, between the parties. The ET considered the nature of the reverend’s duties, the relationship between the parties and the fact that the reverend’s relationship with the bishop was governed by ecclesiastical law, and heard evidence from an expert in the field, a Professor McClean. It also considered the criteria for identifying a contract of employment set out in the case of Ready Mixed Concrete (Southeast) Limited v Minister of Pensions and National Insurance  2 QB 497, such as mutuality of obligation and control. The ET concluded that the reverend did not meet the test for being an employee or worker and it therefore dismissed his claim.
Mr Sharpe appealed the ET's finding to the EAT, on the basis that the ET had failed to apply the relevant case law and there were errors in its analysis. The EAT took into account a judgment that had been handed down by the Supreme Court in another case, Preston v President of the Methodist Conference  2 AC 163, after the ET's decision, and disagreed with the ET's approach. It stated that there was a “requirement for a full analysis of all the relevant documentation” in order to determine the issue, in accordance with the Preston case. It set aside the ET's decision and remitted the matter to a fresh ET to decide the matter in accordance with its recommendations.
Court of Appeal decision
The bishop appealed the EAT’s decision to the Court of Appeal. The Court of Appeal unanimously found that there was no basis for setting aside the employment judge’s findings and disagreed with the EAT’s decision. In doing so, it commented that this case raised questions about the interface between two parallel systems of justice, being ecclesiastical and secular, and noted that the office of rector is governed by a regime that is a part of ecclesiastical law and is not the result of a contractual arrangement. Whilst it recognised the importance of the preceding case law in this area, it found that the arrangements in the present case indicated that there was no intention to create a contract and that there was no contract.
In particular, it noted that the rector was not directly appointed by the bishop, the source of his duties and responsibilities came from elsewhere and the bishop had no power to dismiss him or initiate disciplinary proceedings. It also commented that it would be “impossible to think of a professional person in an employment situation who would have the same level of security of tenure and independence of action”.
The case law in relation to the employment status of ministers is a developing area. It is clear that the criteria set out in the Ready Mixed Concrete case remain relevant but the unique nature and circumstances of religious appointments adds further complexity to this area. Reverend Sharpe’s case has helped to provide some further guidance on the correct approach for determining the issue of whether a church minister might be an employee, particularly in the context of appointments in the Church of England.
There are numerous roles within churches and religious organisations that may not have traditionally been considered to create employment relationships but organisations should be careful not to make assumptions about the legal status of such roles, in case they are inadvertently breaching an individual’s employment rights. Such rights could include the right to paid holiday, sick pay and the right not to be unfairly dismissed.
The case also serves as a useful reminder that ‘office holder’ or other non-employee roles will not be immune from challenge simply because of the lack of an express contract of employment.