Percy v Church of Scotland Board of National Mission (Scotland)

This appeal concerned whether a Church of Scotland associate minister was "employed" within the meaning of section 82(1) of the Sex Discrimination Act 1975 (ie under a contract of service or "a contract personally to execute any work or labour") and, if so, whether jurisdiction to hear her sex discrimination claim was ousted by the Church of Scotland Act 1921 (article IV in the Schedule) as a "matter spiritual". The majority held that the applicant had entered into a contract with the Board of National Mission to provide services as an associate minister on specified terms and that this contract fell within the definition of "employment" in section 82(1). Article IV / section 3 of the 1921 Act did not bar civil tribunals from deciding civil claims of unlawful discrimination arising from such a contract. The case therefore turned on objective construction of the written terms, the parties' legal relationships and the distinction between office-holder status and a contractual obligation to execute work.

Key statutory provisions considered included section 82(1) and section 63(1) of the Sex Discrimination Act 1975 and section 3 and the Declaratory Articles (article IV) of the Church of Scotland Act 1921. The court also analysed relevant domestic authorities on ministers and office-holders and the scope of the Equal Treatment Directive 76/207/EEC (and principles of interpretation such as Marleasing) in relation to national law.

Background and procedural posture:

• The appellant, Ms Helen Percy, was ordained and in 1994 appointed as an associate minister by the Church of Scotland Board of National Mission to serve in a linked charge. In 1997 she was suspended pending disciplinary proceedings and ultimately demitted status as a minister. She brought complaints to an employment tribunal alleging unfair dismissal and unlawful sex discrimination; the tribunal declined jurisdiction on the ground that the issues were "matters spiritual" within the exclusive jurisdiction of the Church. On appeal the Employment Appeal Tribunal and the First Division of the Court of Session dismissed her discrimination claim (the Court of Session report: 2001 SC 757). The House of Lords heard the appeal.

Nature of the claim and issues:

• (i) The claim: a complaint of unlawful sex discrimination under Part II of the Sex Discrimination Act 1975, founded on alleged differential treatment compared with male ministers.
• (ii) Issues before the House: (a) whether the relationship between Ms Percy and the Board of National Mission amounted to "employment" under section 82(1) (a contract personally to execute work or labour) rather than being purely the holding of an ecclesiastical office; and (b) whether, even if employment existed, the Church of Scotland Act 1921 (article IV) excluded the jurisdiction of civil employment tribunals because the complaint touched on matters spiritual.

Court's reasoning and disposition:

• The majority (Lords Nicholls, Hope, Scott and Baroness Hale) concluded that the documentary terms (advertisement, terms and conditions, written offer and acceptance, and the Board's letter of 1 July 1997 referring to "your employment") showed an objectively intended legally binding contract under which Ms Percy agreed to perform work and services in return for stipend, manse and expenses. The fact that the post was an ecclesiastical office did not preclude such a contract.
• On the jurisdiction point the majority held that article IV reserved to the Church matters strictly spiritual, but a civil claim for unlawful discrimination founded on contractual rights is a civil matter within the scope of section 3 of the 1921 Act and within the tribunal's competence. The existence of an ecclesiastical disciplinary process did not immunise the Church from civil remedies for discrimination arising out of employment relations.
• Lord Hoffmann (dissenting on the contract issue) and some reasoning in the earlier domestic authorities had emphasised the traditional presumption that ministers hold an office rather than entering contractual employment; he would have dismissed the appeal. The majority rejected a broad presumption against contractual intent where clear contractual indicia are present.

Disposition: the House allowed the appeal and remitted the discrimination claim to an employment tribunal for determination.

Appeal allowed. The majority held that Ms Percy had entered into a contract with the Church of Scotland Board of National Mission personally to execute work within section 82(1) of the Sex Discrimination Act 1975, and that the Church of Scotland Act 1921 did not exclude the jurisdiction of employment tribunals to hear civil claims of unlawful discrimination arising from such a contract; the matter was remitted to an employment tribunal for determination.

Employment tribunal: application dismissed for want of jurisdiction (1998). Employment Appeal Tribunal: appeal dismissed (March 1999). First Division, Court of Session: appeal dismissed, reported at 2001 SC 757. House of Lords: appeal allowed [2005] UKHL 73.