The use of large up-front fees and disproportionate deposits has already resulted in significant cost consequences for one care provider.
Mr Sharpe, an ordained minister in the Church of England, worked as a Rector in the Diocese of Worcester from 2005 to 2009. He brought claims that he had suffered detriment as a result of making public interest disclosures, and that he was then constructively and unfairly dismissed following a four-year campaign of hate in the parish of Teme Valley South. The acts which Mr Sharpe complained of predated the introduction of common tenure, from 31 January 2011, (see below) which meant that he had to be able to establish that he was either an employee or a worker (as defined) in order to bring his claims.
The Employment Judge in a pre-hearing review found that the Employment Tribunal (‘ET’) was not able to hear Mr Sharpe’s claims because he was neither an employee nor a worker. The Employment Appeal Tribunal allowed Mr Sharpe’s appeal. However, on further appeal the Court of Appeal found in favour of the Bishop of Worcester holding that there was no basis on which to disturb the ET’s original findings.
Court of Appeal decision
The Court of Appeal was mindful of the overall organisation of the Church of England (‘the Church’) and the particular facts of Mr Sharpe’s appointment to his office. It noted, among other things, that the Church is not a legal person and that its functions are carried out by a series of different legal persons and bodies. The appointment of a priest as rector to a vacant benefice involves nomination, institution, and induction in accordance with the Canons of the Church. There is no negotiation of the terms of stipend, housing etc. Clergy are given a very real freedom to go about their duties of pastoral care “in the way they see fit accordingly to their own judgment and conscience” and “a high measure of independence and security of tenure, the corollary being that there was no effective framework of accountability” (ET judgment, paras 78 and 86).
The Court of Appeal held that there was no basis for setting aside the Employment Judge’s findings of fact that the Rector had no express or implied contract and that, because of this, he was not an employee. Further, the Court of Appeal held that because the Rector did not have a contract, he could not be a ‘worker’ as defined.
Significance of the decision
This was not the “landmark decision” which Mr Sharpe’s trade union, Unite, were hoping could lead to all faith workers “finally being awarded basic employment rights”. The significance of this case for the Church is further limited because, from 31 January 2011, their clergy have been appointed under a new form of tenure known as ‘common tenure’, set out in the Ecclesiastical Offices (Terms of Service) Measure 2009 (‘the 2009 Measure’). Common tenure is a form of office and according to Section 9(6) of the 2009 Measure does not give rise to an employment relationship. However, such office holders have legal rights set out in the Ecclesiastical Offices (Terms of Service) Regulations 2009 (SI 2009/2108) enforceable in Employment Tribunals. These include rights to a written statement of particulars, 36 days’ annual leave, an uninterrupted rest period of 24 hours every seven days, maternity, paternity, parental and adoption leave, access to capability and grievance procedures, and a right not to be unfairly dismissed on capability (mainly medical) grounds.
This case will however continue to be significant for Church of England clergy who are removed from their role because of misconduct in that it will be a significant obstacle to their claiming unfair dismissal.
The wider importance of this decision is that the Court of Appeal has underscored the importance of the following principles:
- Each case about office holder/employee/worker status ultimately turns on its own facts.
- Where the parties do not enter into a written document which is said to record the whole of their legal relationship, all the facts of that relationship need to be carefully considered.
- There is no difference, in principle, between the approach that should be taken in contractual interpretation for spiritual and secular roles.
- A contract should not be implied unless the party seeking to establish such a contract shows that it is necessary to be implied.
- When considering the status of a minister it should not be presumed that the parties did not intend to enter into a legally binding contract.
- The most important indicators of a contract of employment are mutuality of obligation/an agreement to provide services in exchange for remuneration, sufficient control by the organisation, and that other factors are consistent with employment.
These principles are likely to remain relevant for many years to come in determining the status of an organisation’s personnel including spiritual leaders in other denominations and in other faiths. Further, this case serves as a reminder to all organisations of the importance of carefully considering what they want the nature of their relationships to be with those who work for/with them, ensuring that their documentation accurately reflects this, and adopting the most effective strategy for dealing with disputes that may arise. Getting these things right at the outset can avoid costly disputes later.
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Please contact Stephen Dalling.
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