Sharpe v Worcester Diocesan Board of Finance Ltd

The Court of Appeal allowed the appellant's appeal and reinstated the employment tribunal's original order. The central legal questions were whether the rector, Reverend Sharpe, had a contract (express or implied) with the Bishop of Worcester and, if so, whether that contract was an employment contract within section 230 of the Employment Rights Act 1996 or a "worker" relationship for the purpose of the whistleblowing provisions in section 43K(1). The tribunal's factual findings that there was no contract between the Bishop and Reverend Sharpe were held to be open on the evidence and not legally erroneous.

Key legal principles applied:

• Ordination to a benefice gives rise to an office whose duties and incidents are governed largely by ecclesiastical law; that background is highly material when construing whether the parties intended contractual relations.
• The Ready Mixed Concrete indicia (control, mutuality of obligation and other factors) remain central to identifying employment relationships.
• Section 43K(1)(a) requires, on its proper construction, that the terms on which a person is engaged to do work presuppose a contract; accordingly, the extended definition does not capture purely non-contractual office-holders in relation to the person sued.
• Expert evidence on ecclesiastical law was admissible and the employment judge was entitled to act on it with appropriate caution.

This appeal concerned a Church of England rector's claims (unfair dismissal and detriment for protected disclosures) against the Bishop of Worcester. The Employment Tribunal (McCarry J) found there was no contract between the rector and the Bishop and dismissed the claims. The Employment Appeal Tribunal (Cox J) allowed an appeal and remitted the matter for further findings, criticising the tribunal's treatment of documentary materials (the "Bishop's Papers") and the admissibility/use of expert evidence.

Nature of the claim/application: Reverend Sharpe claimed unfair dismissal and protection as a whistleblower (protected disclosures) and sought remedies under the Employment Rights Act 1996 (notably the definitions in section 230 and the extended worker definition in section 43K(1)).

Issues framed by the Court of Appeal:

• Whether the Employment Tribunal erred in finding no express or implied contract between the Bishop and Reverend Sharpe;
• if there were a contract, whether it was a contract of employment within section 230;
• whether Reverend Sharpe could be a "worker" for the Bishop under section 43K(1) absent a contract;
• whether the tribunal properly admitted and used expert evidence from Professor McClean on ecclesiastical practice and law.

Reasoning and conclusions: The Court reviewed the factual findings of the Employment Tribunal and the relevant authorities (including Ready Mixed Concrete, Percy, Coker and Preston). It held that:

1. the Employment Tribunal's factual conclusions (no express or implied contract with the Bishop) were open on the evidence and not vitiated by legal error;
2. even if a contractual analysis were entertained, the features of the appointment and the legal framework governing incumbents (appointment by a patron, institution/induction, stipend arrangements, limited episcopal disciplinary and termination powers, duties defined by canons and measures) were contra-indicative of a contractual employment relationship with the Bishop;
3. section 43K(1)(a) should be read to require terms of engagement referable to a contract with the person sued and therefore does not extend protection to non-contractual office-holders in relation to that person;
4. the admission and cautious use of Professor McClean's expert evidence was within the tribunal's discretion.

The Court therefore allowed the appeal and reinstated the Employment Tribunal's order.

Appeal allowed. The Court concluded that the Employment Tribunal's findings that there was no express or implied contract between Reverend Sharpe and the Bishop were open on the evidence and not legally wrong; on that basis sections 230 and 43K(1) of the Employment Rights Act 1996 could not establish employee or worker status in respect of claims against the Bishop. The tribunal was also entitled to admit and weigh the expert ecclesiastical evidence with caution.

Employment Tribunal (Employment Judge McCarry) dismissed the claims (judgment dated 15 February 2012); Employment Appeal Tribunal (Cox J) set aside parts of that decision and remitted for further findings (judgment dated 28 November 2013, UKEAT/0243/12/DM); Court of Appeal ([2015] EWCA Civ 399) allowed the appeal and reinstated the Employment Tribunal's order.