Sharpe v Worcester Diocesan Board of Finance Ltd

There is no presumption that an ordained minister cannot work under a contract. The spiritual nature of the duties and the fact that the minister holds an ecclesiastical office do not prevent a contract of employment or a worker’s contract from arising.

The question is fact-specific. The tribunal must examine objectively the manner of engagement, the particular rules and practices of the church, the relevant documents and any special arrangements made with the minister. It must not ask whether it was necessary to imply a contract. A statutory or ecclesiastical framework, standard terms, limited day-to-day supervision or a fixed stipend does not by itself exclude contractual status. A qualified right to appoint a substitute, exercisable only where the minister is unable to perform the duties and subject to approval, does not necessarily defeat personal service.

The claimant was an ordained Church of England minister appointed as Rector of the Teme Valley South Benefice from 2005 to 2009. He brought claims alleging detriment for making protected disclosures and constructive unfair dismissal against the Worcester Diocesan Board of Finance Ltd and the Bishop of Worcester.

Following a pre-hearing review, the Employment Tribunal held that there was no contract with either respondent and that the claimant was not a worker under sections 43K and 230 of the Employment Rights Act 1996. The tribunal therefore held that it had no jurisdiction. The claimant appealed, principally arguing that the tribunal had failed to analyse whether he had an express contract with the Bishop and had applied the wrong approach to worker status.

1. Appeal allowed and case remitted. The matter was remitted to a fresh Employment Tribunal for rehearing in accordance with the legal principles set out in the judgment.
2. Following Percy and Preston, the correct question was whether the arrangements governing the claimant’s service were characteristic of a contract and, if so, whether it was a contract of employment. The tribunal erred by asking whether it was necessary to imply a contract. Necessity was not the test.
3. The fresh tribunal had to examine the manner in which the claimant was engaged, the rules and practices of the Church of England, the Bishop’s Papers, the Canons and Measures, and the particular arrangements made with the claimant. Appointment to an ecclesiastical office, ceremonial institution and induction, standard or non-negotiable terms, and payment under statutory authority did not preclude a contract.
4. The Employment Tribunal also erred in treating the fact that the Bishop did not pay the stipend or initiate disciplinary proceedings as an insuperable objection to his being the contracting party. Fragmentation of functions within a church does not prevent a well-founded contractual claim. The identity of the contracting party had to be determined after the required factual analysis.
5. For a contract of service, the classic Ready Mixed Concrete test remained applicable. Control was only one factor and had reduced significance for skilled professional work. The relevant question was whether residual powers of control and discipline existed, not how frequently they were exercised in practice.
6. The interpretation of section 43K(1)(a) of the Employment Rights Act 1996 required a broad, protective approach. The words concerning the terms on which an individual was engaged did not necessarily imply a contract. The claimant’s case under that provision required fresh factual consideration.
7. The tribunal’s finding that the claimant had an unfettered right to delegate was inconsistent with Canon C24(8), which permitted substitution only where he was unable to perform his duties and only by a priest licensed or approved by the Bishop. That qualified and exceptional right did not defeat the requirement of personal service under section 230(3)(b).
8. The tribunal also erred in admitting and relying on expert opinion which trespassed upon the legal and factual issues for it to decide. At a preliminary hearing before the rehearing, the admissibility and proper scope of any independent expert evidence were to be addressed.

• Employment Tribunal: Following a pre-hearing review, held that the claimant was neither an employee nor a worker and that it had no jurisdiction.
• Employment Appeal Tribunal: Allowed the appeal and remitted the case to a fresh tribunal for rehearing.