The Supreme Court has overturned the decisions of the EAT and Court of Appeal and held that a Methodist minister was not an employee and so could not bring an unfair dismissal claim.

In the case of Methodist Conference v Preston the claimant was a superintendent minister to a group of congregations in Cornwall. She was entitled to accommodation, holiday and sick pay, a pension and a stipend (a form of salary commonly provided to members of the clergy, whose role cannot be measured by task). Various problems occurred and she was told that her appointment would be ‘curtailed’. She resigned and claimed unfair constructive dismissal.

In order to succeed in an unfair dismissal claim she firstly had to show that she was an employee, i.e. she had worked under a contract of employment, either express or implied. Under basic principles of contract law, one element of an employment contract is the intention of both parties to create legal relations. The Tribunal in the first instance had held that the spiritual character of the arrangement meant that there was no intention to create legal relations, so no employment contract.

On appeal, the EAT and the Court of Appeal had disagreed, holding that she was in fact an employee. However the majority of the Supreme Court held that although tribunals should no longer presume that there will be no intention to create legal relations in the appointment of a minister, upon considering the internal arrangements of the Methodist Church there was no such intention and so no contract. The majority agreed that as the relationship between a Methodist minister and the Church is governed by its constitution, which described the ministry as a vocation by which candidates submit themselves to the discipline of the Church for life, she was not an employee.

Most employers facing claims from individuals asserting employee status will have entered into some form of contract with them, and the Tribunal will look at the substance of the relationship as well as the terms of the arrangement in deciding whether they are an employee, worker or self-employed. For more information on employee status and atypical workers see the Employment buddy guidance note.