The New Testament Church of God v Rev Stewart

The Court of Appeal dismissed the appellant church's challenge to the Employment Tribunal's finding that Rev. Stewart was an employee within the meaning of section 230 of the Employment Rights Act 1996 in respect of his pastorate at Harrow. The tribunal's decision that there was an intention to create legal relations and that the relationship amounted to a contract of service was upheld on the facts: factors supporting that conclusion included payment through the national office with tax and national insurance deductions, regular reporting to the national office, disciplinary procedures and the degree of integration and control in administrative matters. The court held that Percy v Church of Scotland changed the analytical approach courts should adopt but did not displace earlier authorities; religious beliefs as protected by Article 9 ECHR are a material consideration but do not create a presumption against contractual relations.

The respondent, Rev. Sylvester Stewart, claimed unfair dismissal after his pastorate at the New Testament Church of God (NTCG) Harrow was terminated in June 2005 following suspension and an internal trial board finding. He sought reinstatement and compensation. At first instance the Employment Tribunal (Chairman Ms Manley) decided, on a preliminary point, that Rev. Stewart was an employee for the purposes of the Employment Rights Act 1996 and directed the unfair dismissal claim to proceed. The Employment Appeal Tribunal dismissed the appellant church's appeal. The church appealed to the Court of Appeal.

The issues before the Court of Appeal were framed as:

• whether the facts could support a contract of employment under section 230 of the 1996 Act in respect of the pastorate at Harrow;
• whether the tribunal had correctly found an intention to create legal relations; and
• what weight should be given to the church's religious beliefs and practices, including the relevance of Article 9 of the European Convention on Human Rights and the Human Rights Act 1998.

The Court of Appeal analysed the tribunal's detailed findings of fact about the structure of the NTCG, the role of the national office, the payment mechanism (a Ministers' Stipend Account and payroll through Northampton), reporting obligations, disciplinary procedures and the respondent's substantial pastoral and administrative duties at Harrow. The court reviewed earlier authorities (including Parfitt, Davies and Coker) and considered the House of Lords decision in Percy. It concluded that Percy required tribunals not to approach these issues with a presumption that ministers of religion cannot be parties to a contract but to conduct a careful, fact-sensitive inquiry. The court also considered Article 9 and the Human Rights Act: religious beliefs and organisational practices are material to the question of intention to create legal relations and may, in some cases, preclude the implication of a contract, but they do not automatically do so.

Applying those principles to the tribunal's findings, the Court of Appeal held that the tribunal was entitled to find an intention to create legal relations and that the relationship in respect of the Harrow pastorate was a contract of employment. The appeal was dismissed.

Appeal dismissed. The Court of Appeal held that on the tribunal's factual findings there was an intention to create legal relations and the arrangement in respect of the Harrow pastorate amounted to a contract of employment: relevant factors included payment via the national office with statutory deductions, reporting obligations, disciplinary procedures, integration into the organisation and a sufficient degree of control. The court further held that Percy requires a fact-sensitive inquiry and that Article 9 ECHR is a material consideration but does not create a presumption against contractual relations.

Appeal from the Employment Appeal Tribunal (UKEAT029306DA) which had dismissed the appellant's appeal against the Employment Tribunal (Watford, Chairman Ms Manley) decision dated 30 March 2006. The Employment Tribunal had held that Rev. Stewart was an employee for the purposes of the Employment Rights Act 1996. The EAT dismissed the church's appeal and this Court of Appeal dismissed the subsequent appeal on 19 October 2007 (neutral citation [2007] EWCA Civ 1004).