Is your minister an employee?

President of the Methodist Conference and Preston

The Supreme Court published its decision this week in the case of President of the Methodist Conference and Preston. Mrs Preston was a Superintendent Minister of the Methodist Church and as a minister, she received a stipend and a manse, was entitled to holiday pay, sick pay and membership of a pension scheme. She received payslips with an 'employee reference number' which showed deduction of tax and NIC. After a breakdown in local relationships she resigned and brought a claim for unfair dismissal.

At first instance, the Employment Tribunal ruled that she was not an employee of the Methodist church. However, the EAT and the Court of Appeal followed the approach adopted in recent years in cases involving the Church of Scotland and the New Testament Church of God and recognised that a contractual relationship did exist between Mrs Preston and the church. She was found to be an employee but the Methodist Church appealed to the Supreme Court.

The majority of the Supreme Court (4:1) decided that she was not an employee for the purposes of the Employment Rights Act and therefore could not pursue a claim of unfair dismissal. The leading judgement was given by Lord Sumption who made clear the ruling was based on the particular facts. The key points to highlight from Lord Sumption’s judgment are:

• there should be no presumption that ministers could not be employees due to an absence of intention to create legal relations between the parties and the question of whether a minister of religion serves under a contract of employment can no longer be answered simply by classifying the minister’s occupation by office or employment, spiritual or secular;
• the question of whether there is a contract of employment in place, should focus on what were the intentions of the parties, with an examination of the rules and practices of the particular church and any special arrangements made with the particular minister. Lord Sumption confirmed however that the spiritual purpose of the functions of a minister of religion should be taken into consideration.

Methodist ministers have no written contracts of employment and their relationship with the Church is governed by its constitution which suggested to the Supreme Court that unless some special arrangements are made with a particular minister, the rights and duties of minister arise entirely from their status in the constitution and not from any contract. The Supreme Court found that the requirement for Mrs Preston to ‘work’ at a particular Church was not a contractual arrangement but a part of the minister’s fundamental life-long relationship into which she entered on ordination. That relationship was governed by the Deed of Union and standing orders and therefore no contractual relationship existed. It is worth noting that Methodist ministers, unlike employers, are regarded as holding this position for life or until terminated only in limited circumstances by the Church. A minister can only resign with the consent of the Church. Once accepted as a minister, the minister's duties are determined by the Church. These arrangements were seen by the Court as inconsistent with the intention to create a contract.

So what does this mean for other denominations?

Whilst it gives a definitive view on the arrangements for Methodist ministers, this is not a ruling that can give congregational church’s confidence that their ministers will not be employees. In each case the whole factual matrix will be considered. The ruling could however have been much clearer as to the precise reason for the absence of a contractual relationship. The decision therefore does not provide clear guidance to other denominations in coming to a definitive view on their arrangements. It is clear that each case will turn on its own facts.

It is also noteable that an argument at the Court of Appeal that the imposition of an employment relationship would infringe the right of Methodists to manifest their religious beliefs was given very short shrift, with the Judge commenting on the 'moral poverty' of the argument.

For more information

We are confident that with our sector knowledge, understanding of different religious denominations and legal expertise, we can advise as to how this decision may impact on your arrangements with Ministers. If you think you could benefit from speaking with us, contact Matthew Wort, matthew.wort@anthonycollins.com or Douglas Mullen, douglas.mullen@anthonycollins.com or call 0121 212 7494.