COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE EMPLOYMENT APPEAL TRIBUNAL
Strand, London, WC2A 2LL
B e f o r e :
LADY JUSTICE ARDEN
LORD JUSTICE LAWRENCE COLLINS
| The New Testament Church of God
|- and -
|Rev. Sylvester Stewart
Daniel Barnett (instructed by Messrs Stone King) for the Respondent
Hearing dates : 27 & 28 June 2007
Crown Copyright ©
Lord Justice Pill :
"(1) In this Act 'employee' means an individual who has entered into or works under (or, where the employment has ceased, worked under) a contract of employment.
(2) In this Act 'contract of employment' means a contract of service or apprenticeship, whether express or implied, and (if it is express) whether oral or in writing".
The appellant relies on earlier authorities; on behalf of the respondent it is submitted that the decision of the House of Lords in Percy v Church of Scotland Board of National Mission  UKHL 73 involves a sea change and resolves the issue in the respondent's favour. Before considering the authorities, and because of its relevance to the outcome of the appeal, it is necessary to consider the structure under which the appellant operates and the respondent's position and duties within that structure. The appellant submits that the circumstances did not permit a finding that a contract of employment existed. First, the circumstances were not capable of giving rise to a contract and, secondly, if there was a contract, it was not a contract of employment.
"4.1 The NTCG is a Christian church, the aim of which is the propagation of the gospel according to the acts and teachings of the Church of God based in USA. It is represented in 170 countries. In some of those countries the church is known as the Church of God and in others, including the UK, it is known as the New Testament Church of God. In the UK it is a company limited by guarantee and a registered charity. It has around 108 churches in the United Kingdom. Within the UK there are 295 ordained ministers but only about 88 of them are based in churches where they receive payment for any services that they render, sometimes referred to as a "salary" and sometimes a "stipend". A number of different titles attach to these ministers and that depends upon the level of credentials they have achieved. The NTCG's affiliation to the Church of God means that it is that institution which determines and awards the various levels of ordination.
4.2 The Church of God in USA has a general assembly and the Minutes of that assembly set out the background and rules as to how affiliate churches in the international community should be run. The Claimant has been a member of the NTCG for most of his life. He worked as a driving instructor between 1971 and 1999 and during that time was involved in different levels in the church in Harrow. There are a number of levels of ordination held by ministers within the Church of God and NTCG. The Claimant first became an "Exhorter", then a "licensed minister" and finally, in 1984 became an "ordained minister". He is also able to use the title "Bishop". Over this period, he was involved in carrying out duties as a minister of religion at the Harrow NTCG".
[In reciting the findings of the Employment Tribunal, I have retained the nomenclature there used; the respondent as "Claimant" and the appellant as "Respondent"].
6. "4.4 The Claimant did [in 1999] cease working as a driving instructor and [began] to receive a salary paid through the payroll at Northampton. He also was entitled to join a pension scheme which had been arranged by the NTCG. There was therefore an agreement, which was not reduced in writing, between the Claimant and those representing the Respondent that he would perform certain work including administrative tasks and spiritual duties and that he would receive payment for it and be accountable, in part at least, to the national office. The Respondent did not supply a contract of employment or anything analogous to it. Their position was and is that the ministers of religion who carry out work for the church, including those at the Northampton office (Bishops McLeod and Brown) are not employees."
"The money collected from the local churches, including that from Harrow amounting to the sum to cover their minister's salary and "on costs", is paid into that account. The relevant minister is then paid from that account after tax and National Insurance have been deducted. If the local branch does not send in sufficient funds, the Respondent may give one month's grace but no more than that. In the case of the Harrow church there has always been sufficient funds to pay the Claimant but there have been other churches where payment has been suspended or the minister has himself acknowledged that there is insufficient funding to cover his payment."
"4.8 The way in which the Claimant carried out his work is that he was expected to address any spiritual needs of his local church and its members. Although there were no fixed hours, he was expected and carried out a number of services including two services on Sundays and a prayer meeting and a service on Mondays. He also ran matters such as choir practice and youth club, visited members in hospital or prison, provided pastoral care such as debt counselling and dealt with a number of administrative matters, in particular the completion of the forms referred to. With respect to the local church, he collected monthly mortgage payments and took it to the bank. He also officiated at weddings and other such functions."
"7.2 In my view there was an agreement between the Claimant and the Respondent that he should carry out work of a spiritual and administrative nature at the NTCG church in Harrow. Whilst he was free to arrange much of the work as he saw fit, he was also required to do so within the rules of the Church of God and in accordance with the procedures of the Respondent through its national office. Bearing in mind that there had been a previous incident where the Claimant was reprimanded and then told that he would be supervised, it is clear to me that both parties were under the impression that there was a connection between them which amounted to a legal agreement. Furthermore, the facts which led to this claim suggest that the Respondent does understand itself to be able to regulate and discipline its ministers. I accept that there was an intention to create legal relations, though the precise nature of those legal relations may not have been clear to all at the time of the agreement.
7.3 Once I have formed the view that there was an intention to create legal relations I must then look at other matters to consider whether, in this case, there was a contract of service. I am satisfied that there was a degree of control exercised over the Claimant by the Respondent, particularly in administrative matters such as reporting to the national office. I am also satisfied that ministers were central to the running of the organisation and therefore well integrated into it. For tax and national insurance purposes and in relation to disciplinary matters the Claimant was treated in a similar way to an employee. As for mutuality of obligation, there was clearly sufficient work for the Claimant to carry out and the expected level of services as reflected in the forms he was required to complete and return to the national office, supports the view that there was such an obligation on both parties. Whilst I accept that the Claimant exercised a high degree of autonomy and his salary was dependent in part on funds raised through his own local church, I am bound to consider matters as a whole and do find that this was indeed a contract of service. For these reasons, I find that the Tribunal has jurisdiction to hear the Claimant's claims which will proceed to a Hearing."
"The Church of God recognizes the local church as the foundation of all ministry activities and will renew efforts to acknowledge, affirm, strengthen, and support the central importance of the ministry of the local church."
"The Church of God believes that from within the priesthood of all believers God specifically selects, calls, anoints, and commissions certain individuals for extraordinary service and leadership and that this special (clergy) calling is of God's sovereign will, characterized by individuals with spiritual passion, love for the lost, total involvement, lifelong sacrifice, and servant leadership rather than by those seeking position or personal honor."
Under the heading Laity, it is stated:
"The Church of God will further emphasize the doctrinal position of the priesthood of all believers and will encourage laity to assume a rightful Biblical role as full partners in ministry throughout every area of the church."
Consistent with that approach, it is stated, under the heading Applicants for Ministry:
"All applicants for the Ministry should be actively engaged, either in evangelical or pastoral work, before being recommended for the Ministry."
"In applying for advancement to ordination in the Church of God, I reaffirm my personal belief in the doctrine contained in the Declaration of Faith and elsewhere in the current Supplement to the Minutes of the General Assembly of the Church of God. I believe that the practical commitments of the Church of God are biblical exhortations of the life of holiness. I reaffirm my personal belief in, and practice of, the tithing system as recommended by the General Assembly. I have prayerfully considered the above questions and statements and I have answered them honestly and conscientiously, to the best of my understanding and ability. I hereby pledge allegiance to the Church of God and dedicate my ministry to the gospel of Jesus Christ."
Members of a local church are entitled to "express themselves regarding their desire for pastor of their choice" before an appointment is made.
"the spiritual nature of the work to be done by a person and the spiritual discipline to which that person is subject may not necessarily, in an appropriate context, exclude a contractual relationship under which work which is of a spiritual nature is to be done for others by a person who is subject to spiritual discipline. On any view the spiritual nature of the work and the spiritual discipline under which it is performed must be very relevant considerations when it has to be decided whether or not there is a contractual relationship."
However, Dillon LJ concluded, at page 183H:
"Nonetheless the courts have repeatedly recognised what is and what is not a contract of service and I have no hesitation in concluding that the relationship between a church and a minister of religion is not apt, in the absence of clear indications of a contrary intention in the document, to be regulated by a contract of service."
"I consider that the starting point of any consideration of the relationship between the Methodist Church and its ministers must be an examination of the faith and doctrine to which they subscribe and they seek to further. The concept of a minister as a person called by God, a servant of God and the pastor of His local church members seems to me to be central to the relationship. [Waterhouse J cited earlier authorities] . . . I am unable to accept that either party to the present proceedings intended to create a contractual relationship."
Sir John Donaldson MR agreed with both judgments.
"My Lords, it is possible for a man to be employed as a servant or as an independent contractor to carry out duties which are exclusively spiritual. But in the present case the applicant cannot point to any contract between himself and the church. The book of rules does not contain terms of employment capable of being offered and accepted in the course of a religious ceremony. The duties owed by the pastor to the church are not contractual or enforceable. A pastor is called and accepts the call. He does not devote his working life but his whole life to the church and his religion. His duties are defined and his activities are dictated not by contract but by conscience. He is the servant of God. If his manner of serving God is not acceptable to the church, then his pastorate can be brought to an end by the church in accordance with the rules. The law will ensure that a pastor is not deprived of his salaried pastorate save in accordance with the provisions of the book of rules but an industrial tribunal cannot determine whether a reasonable church would sever the link between minister and congregation."
"The simple reason, in my view, for the absence of a contract between the church and a minister of religion is the lack of an intention to create a contractual relationship."
Mummery LJ added, at page 148B:
"It is difficult to see why an ordained priest, licensed by his bishop to assist the incumbent in his cure of souls, is under contract with the bishop, by whom he is licensed, or with the incumbent he is assisting, or with anyone else, in the absence of a clear intention to create a contract."
Mummery LJ went on to consider the possible candidates as employer; the diocese, the church commissioners and the bishop and rejected each possibility. He stated that "there was no intention that he should have a contract, let alone a contract of service, with anyone for the discharge of the functions of his priestly office." In his concurring judgment, Staughton LJ, agreed, at page 150G, with Mummery LJ's conclusion that "in general the duties of a minister of religion are inconsistent with an intention to create contractual relations."
"The context in which these issues normally arise today is statutory protection for employees. Given this context, in my view it is time to recognise that employment arrangements between a church and its ministers should not lightly be taken as intended to have no legal effect and, in consequence, its ministers denied this protection."
At paragraph 28, Lord Nicholls referred to Coker and stated:
"Then the fragmentation of functions within such an 'umbrella' organisation may make it difficult to pin the role of employer on any particular board or committee. But this internal fragmentation ought not to stand in the way of otherwise well-founded claims."
Lord Nicholls concluded, at paragraph 42, that Ms Percy was employed by the Board of National Mission under a contract personally to execute work within the meaning of Section 82(1) of the 1975 Act.
"That in itself is sufficient to distinguish those authorities. In any event, all of these cases depend upon their own particular facts. But in so far as those authorities may be explained by a presumed lack of intent to create legal relations between the clergy and their Church, I cannot accept that there is any general presumption to that effect. The nature of many professions' duties these days is such that they must serve higher principles and values than those determined by their employers. But usually there is no conflict between them, because their employers have engaged them in order that they should serve those very principles and values. I find it difficult to discern any difference in principle between the duties of the clergy appointed to minister to our spiritual needs, of the doctors appointed to minister to our bodily needs, and of the judges appointed to administer the law, in this respect."
I do, respectfully, comment on that paragraph later in this judgment.
"A further strand in the authorities, most notably in the judgment of Mummery LJ in Diocese of Southwark v Coker  ICR 140, concerns the absence of an intention to create legal relations. There are indeed many arrangements or happenings in church matters where, viewed objectively on ordinary principles, the parties cannot be taken to have intended to enter into a legally-binding contract. The matters relied upon by Mr Parfitt in President of the Methodist Conference v Parfitt  IRLR 141 are a good example of this. The nature of the lifelong relationship between the Methodist Church and a minister, the fact that he could not unilaterally resign from the ministry, the nature of his stipend, and so forth, all these matters made it impossible to suppose that any legally-binding contract came into being between a newly-ordained minister and the Methodist Church when he was received into full connection. Similarly with the church's book of rules relied on by the Reverend Colin Davies in Davies v Presbyterian Church of Wales  IRLR 194. Then the rebuttable presumption enunciated by the Lord President in the present case, following Mummery LJ's statements of principle in Diocese of Southwark v Coker  ICR 140, 147, may have a place. Without more, the nature of the mutual obligations, their breadth and looseness, and the circumstances in which they were undertaken, point away from a legally binding relationship."
"24. But this principle should not be carried too far. It cannot be carried into arrangements which on their face are to be expected to give rise to legally-binding obligations. The offer and acceptance of a church post for a specific period, with specific provision for the appointee's duties and remuneration and travelling expenses and holidays and accommodation, seems to me to fall firmly within this latter category.
25. Further, in this regard there seems to be no cogent reason today to draw a distinction between a post whose duties are primarily religious and a post within the church where this is not so. In President of the Methodist Conference v Parfitt  IRLR 141, 144 Dillon LJ noted that a binding contract of service can be made between a minister and his church. This was echoed by Lord Templeman in your Lordships' House in Davies v Presbyterian Church of Wales  IRLR 194, 196. Lord Templeman said it is possible for a man to be employed as a servant or as an independent contractor to carry out duties which are exclusively spiritual."
I have already cited the general proposition then stated by Lord Nicholls at paragraph 26.
"1. Everyone has the right to freedom of thought, conscience and religion, this right includes freedom to change his religion or belief and freedom, either alone or in community with others and in public or private, to manifest his religion or belief, in worship, teaching, practice and observance.
2. Freedom to manifest one's religion or beliefs shall be subject only to such limitations as are prescribed by law and are necessary in a democratic society in the interests of public safety, for the protection of public order, health or morals, or for the protection of the rights and freedoms of others."
"If a court's determination of any question arising under this Act might affect the exercise by a religious organisation (itself or its members collectively) of the Convention right to freedom of thought, conscience and religion, it must have particular regard to the importance of that right."
"As enshrined in Article 9, freedom of thought, conscience and religion is one of the foundations of a 'democratic society' within the meaning of the Convention. It is, in its religious dimension, one of the most vital elements that go to make up the identity of believers and of their conception of life, but it is also a precious asset for atheists, agnostics, sceptics and the unconcerned. The pluralism indissociable from a democratic society, which has been dearly won over the centuries, depends on it.
While religious freedom is primarily a matter of individual conscience, it also implies, inter alia, freedom to 'manifest [one's] religion.' Bearing witness in words and deeds is bound up with the existence of religious conventions."
At paragraph 36, the court held that the sentence of the Greek court:
"Amounts to an interference with the exercise of Mr. Kokkinakis' right to 'freedom to manifest' [his religion or belief]."
Such interference was held to be contrary to Article 9 unless it was 'prescribed by law', directed at one or more of the legitimate aims in paragraph 2 of Article 9, and necessary in a democratic society for achieving them. The majority held that the measure complained of was 'prescribed by law' within the meaning of Article 9(2) and was in pursuit of a legitimate aim under the article, namely the protection of the rights and freedom of others. As to whether it was 'necessary in a democratic society', the majority held, at paragraph 48:
"Scrutiny of section of the Act 1363/1938 shows that the relevant criteria adopted by the Greek legislature are reconcilable with the foregoing if and in so far as they are designed only to punish improper proselytism, which the court does not have to define in the abstract in the present case."
"The Court notes, however, that in their reasoning the Greek courts established the applicant's liability by merely reproducing the wording of section 4 and did not sufficiently specify in what way the accused had attempted to convince his neighbour by improper means. None of the facts they set out warrants that finding.
That being so, it has not been shown that the applicant's conviction was justified in the circumstances of the case by a pressing social need. The contested measure therefore does not appear to have been proportionate to the legitimate aim pursued or, consequently, 'necessary in a democratic society ... for the protection of the rights and freedoms of others'."
"The basic principle in human rights is respect for human dignity and human freedom. Essential for that dignity and that freedom are the freedoms of thought, conscience and religion enshrined in Article 9(1). Accordingly, they are absolute. The Convention leaves no room whatsoever for interference by the State.
These absolute freedoms explicitly include freedom to change one's religion and beliefs. Whether or not somebody intends to change religion is no concern of the State's and, consequently, neither in principle should it be the State's concern if somebody attempts to induce another to change his religion.
15. There were good reasons for laying down in Article 9 that freedom of religion includes freedom to teach one's religion: many religious faiths count teaching the faith amongst the principal duties of believers. Admittedly, such teaching may gradually shade off into proselytising. It is true, furthermore, that proselytising creates a possible 'conflict' between two subjects of the right to freedom of religion: it sets the rights of those whose religious faith encourages or requires such activity against the rights of those targeted to maintain their beliefs.
In principle, however, it is not within the province of the State to interfere in this 'conflict' between proselytiser and proselytised. First, because - since respect for human dignity and human freedom implies that the State is bound to accept that in principle everybody is capable of determining his fate in the way that he deems best - there is no justification for the State to use its power 'to protect' the proselytised (it may be otherwise in very special situations in which the State has a particular duty of care, but such situations fall outside the present issue)."
Having stated that freedom of religion includes freedom to teach one's religion, Judge Martens added:
"To allow States to interfere in the 'conflict' implied in proselytising by making proselytising a criminal offence would not only run counter to the strict neutrality which the State is required to maintain in this field but also create the danger of discrimination when there is one dominant religion. The latter point is tellingly illustrated by the file that was before the Court."
"The starting point of any consideration of the relationship between the Methodist Church and its ministers must be an examination of the faith and doctrine to which they subscribe and they seek to further. The concept of a minister as a person called by God, a servant of God and the pastor of His local church members seems to me to be central to the relationship."
Lady Justice Arden :
Article 9 of the European Convention on Human Rights
" The Court recalls that religious communities traditionally and universally exist in the form of organised structures. They abide by rules which are often seen by followers as being of a divine origin. Religious ceremonies have their meaning and sacred value for the believers if they have been conducted by ministers empowered for that purpose in compliance with these rules. The personality of the religious ministers is undoubtedly of importance to every member of the community. Participation in the life of the community is thus a manifestation of one's religion, protected by Article 9 of the Convention. Where the organisation of the religious community is at issue, Article 9 must be interpreted in the light of Article 11 of the Convention which safeguards associative life against unjustified State interference. Seen in this perspective, the believer's right to freedom of religion encompasses the expectation that the community will be allowed to function peacefully free from arbitrary State intervention. Indeed, the autonomous existence of religious communities is indispensable for pluralism in a democratic society and is thus an issue at the very heart of the protection which Article 9 affords. It directly concerns not only the organisation of the community as such but also the effective enjoyment of the right to freedom of religion by all its active members. Were the organisational life of the community not protected by Article 9 of the Convention, all other aspects of the individual's freedom of religion would become vulnerable."
Lord Justice Lawrence Collins :