A note on the Court of Appeal’s recent decision in Sharpe v Bishop of Worcester

Historically, ministers of religion were not seen as employees due to an absence of intention to create legal relations between the parties.  There were and continue to be many reasons for this approach.  For example, ministers carry out spiritual duties that are prescribed by ecclesiastical law rather than civil law.  There is also an argument that the English church should be autonomous and free from intervention by civil law, which is especially poignant this year on the 800th anniversary of the Magna Carta.

Then 10 years ago, in 2005, the House of Lords gave a ground-breaking decision in the case of Percy v Church of Scotland.  It found that ministers could be employees with normal employment law rights: they were not necessarily “employed by God”.  This case started a trend towards the Courts recognising employment rights for ministers and allowing them to benefit from the protection of employment legislation.

However, the Court of Appeal in this recent case precluded Reverend Sharpe from bringing claims of unfair dismissal and whistleblowing, as it held that the minister was neither an employee nor a worker.  

SHARPE V BISHOP OF WORCESTER: THE FACTS

The Reverend Mark Sharpe was an ordained minister of the Church of England.  In 2004, Reverend Sharpe was nominated by a patron for the post of Rector of the parish of Teme Valley South in the Diocese of Worcester.  The Bishop approved the appointment and conducted a ceremony of “installation” to formalise the appointment.  Reverend Sharpe received a set of Bishop’s Papers which provided spiritual guidance, in addition to guidance on matters such as when holiday should be taken. 

Reverend Sharpe worked as Rector in the Diocese of Worcester between 2005 and 2009.  As Rector, Mr Sharpe was the holder of a freehold office, which meant that he could occupy the post for life. However, relations between Reverend Sharpe and his parishioners deteriorated to the point that Reverend Sharpe resigned from his post, in September 2009, claiming constructive unfair dismissal and that he had suffered detrimental treatment as a result of making protected disclosures (whistleblowing).

THE COURT OF APPEAL’S LEGAL ANALYSIS

Reverend Sharpe was required to demonstrate to the Court that he fell within the relevant statutory definition of “employee” in respect of the constructive dismissal claim and “worker” in relation to his other claim of whistleblowing.  To determine this question the Court of Appeal focused on whether, on the facts, there was a contract of employment between the Reverend and the Bishop and if so whether the Reverend satisfied the statutory definition of “employee” and/or “worker”. 

The Court looked at a number of different factors such as whether there was a contract to work or provide services in exchange for remuneration, how much control the Bishop exercised over the Reverend’s day-to-day activities and whether any other factors of the relationship were consistent with an employment relationship.  The Court of Appeal pointed to the fact that the terms of his office were not individually negotiated or discussed when Reverend Sharpe was interviewed and that all incumbents have the same terms.  The deed of institution executed by the Bishop imposed no requirements but invested Reverend Sharpe with “rights and duties”.  These duties were set out in ecclesiastical legislation and were seen as aspirational rather than mandatory.  A stipend was paid under statutory authority but there was no provision for determining any particular sum.  As such, the stipend was paid at a fixed flat rate amount, usually fixed by the individual Diocese following recommendations from the Central Stipends Authority.  Further, the Bishop had no power to terminate the Reverend’s appointment and had negligible disciplinary powers against him. 

As to the parties’ intentions, it was found that at the time of his appointment Reverend Sharpe had not given any active consideration as to whether he was an office holder or an employee.

In light of these factors the Court of Appeal concluded that the office of Rector was governed by ecclesiastical law and was not the result of a contractual relationship between the Reverend and the Bishop.  As such, Reverend Sharpe was neither an employee nor a worker.  Therefore he was unable to bring his claims of constructive dismissal or whistleblowing.

THE ECCLESIASTICAL OFFICES (TERMS OF SERVICE) MEASURE 2009 (“THE MEASURE”)

It is important to note that the facts from which Sharpe arose occurred before this piece of legislation came into force.  This Measure is an important development in ecclesiastical law which allows Church of England clerics on common tenure the right not to be unfairly dismissed from office on grounds of their capability.  However, section 9(6) of the Measure makes it clear that this shall not be seen as creating an employment relationship.  As such, the Measure confers rights on Church of England clergy as if they were employed but not because they are employed, which is an important distinction.  Furthermore, HMRC’s guidance “PAYE Operation: Specific Employments: Clergy and Ministers of Religion” states that Church of England ministers are classified as “office holders”, lending weight to the argument that ministers are not considered to be employees or workers.

WHEN WILL A MINISTER BE CONSIDERED AN “EMPLOYEE”?   

Despite the Court of Appeal’s decision in Sharpe v Bishop of Worcester, the fact that a minister is an ecclesiastical office holder or “employed by God” does not in any way prevent a contract of employment from arising.  Churches are able to implement and enforce contracts of employment if there is an agreement for the minister to provide services in exchange for remuneration, if there is an element of control by the “employer” and that other factors of the relationship are consistent with that of an employment relationship. 

Ministers of religion are now in the same position as all other individuals who wish to prove their employment status.  They would need to point to a contract of employment which would need to be analysed in accordance with the factors outlined above.  The spiritual nature of the contract will be only one factor that is taken into account and will involve a careful analysis of the rules and practices of the Church in question.  With no defining judgment or decisive rule laid down by the Employment Tribunals or the Court of Appeal, the uncertainty surrounding the employment status of ministers of religion is likely to continue as each case will be fact specific and, possibly, Church specific.