Sharpe v The Bishop of Worcester

Reverend Sharpe was from his installation on 8 January 2005 until his resignation on 7 September 2009 the Rector of the parish of Teme Valley South in the diocese of Worcester. He claims that he was unfairly dismissed, that he was, to use the colloquial term, a “whistle blower” and that he suffered detrimental treatment as a result of making what are in law called “protected disclosures”. This appeal is not concerned with the substance of his claims but with whether, on the facts as found, he can meet a threshold test. To bring his claims, he must show that he falls within the relevant statutory definitions of “employee” (as respects his claim for unfair dismissal) and “worker” (as respects his other claims) in relation to the sole respondent in this appeal, the Bishop of Worcester.

This involves understanding the nature of Reverend Sharpe’s appointment. As rector, Reverend Sharpe was the holder of a freehold office: Kirton v Dear (1869) 5 CP 217 at 220. That means that (until the recent introduction of an age limit) he could occupy the office for life. In previous times he would also have had a freehold interest in the income of his office, but in the case of glebe land (that is, land forming part of the benefice) the income is now assigned to the diocesan board of finance to help meet clergy stipends in the diocese and other income may now be similarly so treated. There is no statutory definition of “office” but its essence was captured by Lord Atkin in McMillan v Guest [1942] AC 561 in the following words:

Without adopting the sentence as a complete definition one may treat the following expression of Rowlatt J. in Great Western Ry. Co. v. Bater, adopted by Lord Atkinson, as a generally sufficient statement of the meaning of the word: “an office or employment which was a subsisting, permanent, substantive position which had an existence independent of the person who filled it, which went on and was filled in succession by successive holders.”

There are two relevant provisions in the Employment Rights Act 1996 (“ERA”). The first is section 230 ERA, which defines “employee” and “worker”. The second provision, section 43K(1) ERA, extends the definition of “worker” for the purpose of “whistle-blowing” claims. The material parts of both definitions are set out in the annex to this judgment. The definitions in section 230 require a contract of employment or to perform work or provide services for a third party. I shall have to consider later whether section 43K(1) also requires a contract in all circumstances. The primary focus of this appeal is on the question whether there was a contract at all and if so whether it was a contract which fulfils the requirements of section 230 and section 43(K)(1) between the Bishop and Reverend Sharpe. (Earlier in the proceedings, there were other defendants, but we are not concerned with them). If Reverend Sharpe is unsuccessful on this issue he has further arguments based on section 43K(1). Reverend Sharpe contends (among other matters) that section 43(1)(a) does not require a contract between him and the Bishop. The Bishop contends that section 43K(1)(a) does require such a contract.

The Bishop was successful before Employment Tribunal (“ET”) (Employment Judge McCarry) (judgment dated 15 February 2012) which dismissed his claim on the basis that Reverend Sharpe failed to meet the threshold tests. However, the Bishop lost on appeal by Reverend Sharpe to the Employment Appeal Tribunal (“EAT”) (Cox J) (judgment dated 28 November 2013), which set aside an order of the ET. The EAT remitted the matter for further findings to the ET. An appeal from the EAT to this court lies only on a point of law. There is no lack of recent case law on ministers of religion generally. The cases on ministers of religion have given rise to exacting questions about the very nature of the employment relationship at the highest judicial levels (see paragraphs 60 to 68 below). That case law has to be applied correctly to the particular circumstances of this case.

I shall now set out a brief outline of the facts, though I will have to summarise them in more detail below. In summary, Reverend Sharpe applied for the post of Rector of Teme Valley South. The right to present (or nominate) a member of the clergy to this living was vested in Mr and Mrs Miles (though only Mrs Miles appears to have been involved on this occasion), but a person could not be nominated without the Bishop’s approval, which was given. The Bishop conducted a ceremony of “installation” to complete the formalities of the appointment. After that, Reverend Sharpe became responsible for looking after the spiritual needs of parishioners unless the Bishop chose to intervene. Following his appointment, Reverend Sharpe received a set of papers, called “the Bishop’s Papers”, assembled into book form with an introduction. The Bishop’s Papers dealt with a large number of matters, including when holidays should be taken and so on. The employment judge, however, held that there was no contract, express or implied, between the parties.

The main issues between the parties on this appeal fall into four categories which I will call: (1) the no-contract finding issue, (2) the no-employment contract issue, (3) the “worker” issue and (4) the Professor McClean issue. The main issues are as follows:

Professor McClean issue

Having carefully considered the submissions of the parties and for the reasons set out below, I conclude on this appeal as follows:

In those circumstances the further points of law argued on section 43K(1)(a) do not arise, and in view of the considerable length of this judgment I do not propose in the circumstances to deal with them. In the absence of a contract between the parties, neither section 43K(1)(a) or (b) can apply.

Since the events in question on this appeal, the legal position of rectors has changed. These events occurred before the Ecclesiastical Offices (Terms of Service) Measure 2009 and the Ecclesiastical Offices (Terms of Service) Regulations 2009, which came into force on 31 January 2011. One effect of these enactments is that incumbents to whom those enactments apply now hold office under the terms of service set out in those regulations and have been expressly given the right not to be unfairly dismissed from office on the grounds of “capability” (as defined), and this right is enforceable in employment tribunals. Section 9(6) of the 2009 Measure states that it does not create an employment relationship between office holders and any other person. So these enactments assume that an office holder will not be an employee. Transitional provisions were made. These changes mean that there may now be only a limited number of clergy to whom the same issues as arise on this appeal could apply in future. These changes are also relevant for a further reason. I need not go further into the detail of these enactments, but they may constitute a reason why a court would be reluctant to hold that Reverend Sharpe was an employee if that conclusion required a development of the existing law (see generally, Johnson v Unisys [2003] 1 AC 518).

I will next summarise the facts and the findings and conclusions of the employment judge and of the EAT. My summary of the facts is based on the facts as found by the employment judge. It is necessary to consider the facts as well as any written record because the parties did not enter into a written document which is said to record the whole of their legal relationship. Needless to say, it is necessary to consider the findings of fact with great care, as Mr John Bowers QC for Reverend Sharpe submits.

Leading counsel instructed for Reverend Sharpe on this appeal appeared for him before the EAT but not before the ET. Leading counsel for the Bishop appeared only on this appeal. Junior counsel for both parties appeared in the ET and EAT.

The Church of England (“the Church”) is not a legal person. Its functions are carried out by a series of different legal persons and bodies. The Church and its officers are governed by ecclesiastical law. Ecclesiastical law includes “the Canons of the Church of England”. Canon law, that is, the law of the canons and generally the divine law of the Church, is part of the law of the land. Legislation for the Church takes the form of Measures, which receive royal assent after approval by Parliament.

The Church consists of a number of geographical dioceses, each headed by a bishop. In the Worcester Diocese, there is also a suffragan or an assistant bishop, the Bishop of Dudley. He attended the interview with Reverend Sharpe before he was appointed. A priest cannot minister in a diocese without the consent of the bishop of the diocese.

There was detailed evidence about Reverend Sharpe’s appointment as rector and about the procedure for, and consequences of, the appointment of a rector, which I will next summarise. All these matters form part of the background to the parties’ relationship and therefore fall to be taken into account.

The office of rector or vicar (the differences are not material) in a particular parish is known as a benefice. It carries with it the freehold interest in the parsonage house. As already explained, a rector could not be removed from office in his lifetime. It was therefore said that the right to the office was freehold. However, since 1975 a rector has to retire when he reaches the age of seventy years (The Ecclesiastical Offices (Age Limit) Measure 1975). In addition, as I explain below, it is possible for him to be removed following disciplinary proceedings.

The appointment of a priest as rector to a vacant benefice is now governed by the Patronage (Benefices) Measure 1986 (“PBM”). The process involves: nomination, institution, and induction in accordance with the Canons. In the present case, the right to nominate a priest for appointment as Rector of Teme Valley South belongs to Mr and Mrs Miles as patrons of the parish. This right was known as an “advowson”, but since the PBM may now more commonly be called the right of patronage or to present to a benefice.

The patron must consult the parish, obtain the consent of two elected representatives of the parochial church council (“PCC”) and of the bishop before offering the living to a particular priest. There is often an interview at which the patron, the bishop’s representative and representatives of the PCC are all present.

The employment judge found that Mrs Miles offered the appointment to Mr Sharpe by letter dated 26 October 2004 (“the offer letter”). The offer letter stated that Mrs Miles was delighted to be able to write, as Patron, with the unanimous agreement of the parish representatives and the Bishop of Dudley, to offer Reverend Sharpe the post of rector of Teme Valley South, and that subject to clearance from the Criminal Records Bureau, and to her receiving a written acceptance from Reverend Sharpe, a date would be agreed when the Bishop of Worcester could come to Teme Valley South for his institution. Reverend Sharpe accepted the appointment, and the necessary clearances were no doubt obtained. She also presented Reverend Sharpe to the bishop by letter. By law, the appointment was not finalised until “institution” occurred, and Reverend Sharpe had been “inducted” or “installed” by the bishop. Also, by law, a bishop could not countermand an offer after it had been made or refuse to institute a rector, unless he lacked capacity. Before being admitted to office, the priest had to:

The deed of institution which the Bishop executed in favour of Reverend Sharpe imposed no requirements but invested Reverend Sharpe with the “rights and duties” of the benefice and committed to him the “cure of souls” of parishioners in the parish. (I assume that “pastoral care” would be an acceptable modern term for this). When the ceremony of induction was completed, Reverend Sharpe was then said to be “installed”. From 8 January 2005, his stipend was paid. (It appears that from this moment on it is appropriate to call him “the incumbent”).

Within the Church the arrangements were regarded as giving to clergy such as Reverend Sharpe “a high measure of independence and security of tenure, the corollary being that there was no effective framework of accountability” (ET judgment, paragraph 86). The office of rector can be terminated, other than on voluntary grounds, only in exceptional circumstances under various complex pieces of ecclesiastical law relating to, among other measures, disciplinary reasons under the Ecclesiastical Jurisdiction Measure 1963 (“the EJM”) or the Clergy Discipline Measure 2003 (“the CDM”) and other measures (ET judgment, paragraph 86). In summary,

Removal from office on disciplinary grounds requires in every case a process before a court or tribunal. There is no possibility of immediate or summary dismissal, whatever the misconduct and any attempt to do so could be challenged on judicial review. An incumbent may, however, be suspended by a Bishop from the exercise of his office pending disciplinary proceedings. The EJM established a Bishop's Disciplinary Tribunal in each diocese. The relevant procedure is either the EJM (now confined to doctrinal cases) or in personal misconduct cases the CDM. The CDM came into being on 1 January 2006. Under the EJM, a person wishing to make a complaint against a priest had to do so in writing to the Registrar of the diocese. Under the CDM, the written complaint must be to the Bishop. In either case, the complaint must include written particulars of the alleged misconduct and include written evidence in support of the complaint. (ET judgment, paragraph 87)

The employment judge found that the Bishop’s Disciplinary Tribunal could impose a penalty or defer one. Possible penalties included removal from office or suspension. However the bishop himself could not commence disciplinary proceedings and he could not impose a penalty without the consent of the priest in question (ET judgment paragraph 189).

Provisions for removal on the grounds of ill health were contained in the Incumbents (Vacation of Benefice) Measure 1977. The removal is possible where the relationship between the incumbent and the parishioners impedes the promotion of the Church and its mission in the parish. The employment judge held that the procedure was cumbersome and expensive and was used only rarely in practice.

Insofar as the actual intentions of the parties are relevant, Reverend Sharpe gave evidence that he did not fully appreciate the implications of the difference between an office holder and an employee. The employment judge found that he had not given the question any active consideration at the time of accepting his appointment.

The terms of the office were not individually negotiated. They were not discussed when Reverend Sharpe was interviewed. All incumbents have the same terms. Terms include terms as to housing and stipend.

Shortly after his appointment Reverend Sharpe received what the parties to these proceedings have called “the Bishop’s Papers”. The employment judge held that they contained information and advice on matters both spiritual and temporal. Section F contained details of stipends and other financial matters. The papers were specific to the Worcester diocese and were first drawn up in the mid-1990s (ET judgment, paragraph 32).

The duties of parish clergy are set out in ecclesiastical legislation, particularly in the Canons and the Ordinal (part of the Book of Common Prayer containing rules to be observed, and the form of service to be used, in the ordination of deacons and priests, and the consecration of bishops). Professor McClean gave evidence that the Canons were often “aspirational rather than mandatory”. Professor McClean gave evidence that, with the exception of the celebration of Holy Communion, incumbents were free to delegate duties to whomsoever they considered appropriate, including members of the laity (see ET judgment, paragraph 36). It was a matter for the incumbent alone which duties to perform, how to perform them and, with the exception of Sunday services, when to perform them. Delegation is relevant to any requirement to do work personally. The concept of service (see section 230(2)) has been interpreted to require this, and in addition it is expressly required by section 230 (3)(b).

The benefits and terms associated with the office of rector include a “stipend” which is paid under statutory authority but there is no provision for determining any particular sum. It is paid as a fixed flat rate amount, usually fixed by the individual diocese in light of recommendations from the central stipends authority. Each diocese has a discretion to fix the amount paid (ET judgment, paragraph 42). In the Worcester diocese, the rate is set by the Diocesan Resources Board, established by the Diocesan synod and the Worcester Diocesan Board of Finance (“WDBF”). There is no opportunity for an individual to negotiate the level of stipend. There is no scale rising with experience, service, or size of the parish (despite suggestions to the contrary in the Bishops’ Papers). Incumbents also receive various statutory fees, for example for weddings and funerals, but these are effectively assigned to the diocese and set off against the stipend.

The Church Commissioners are responsible for the payment of the stipend and national insurance contributions. The Church of England Pensions Board is responsible for the payment of pensions. Stipend and pension contributions are paid from monies provided by the diocesan board of finance. Rectors are entitled to apply for a car loan from the Church Commissioners.

There is no formal regulation of hours of work though the Bishop encourages parish clergy to take each week a regular day off. The Bishop’s Papers also contains guidelines as to the amount of holidays rectors should consider taking in each year but this is a flexible matter at the option of the individual incumbent, for which they do not need permission. No record or check is kept on what holiday is taken ( ET judgment, paragraph 52).

Statutory sick pay is available. When that has expired, a further 24 weeks of stipend is paid at half rate.

There is no formal procedure within the Church as a whole although some dioceses have their own procedures. The Worcester diocese had not adopted its own procedure.

Professor McClean’s evidence was that the oath of canonical obedience was largely symbolic and in practice had little effect. There was no sanction for disobeying a bishop or the oath of canonical obedience. The employment judge went into considerable detail on this issue but I need only deal with a limited number of the points that he made. The employment judge recorded that Reverend Sharpe considered the Bishop and Archdeacon to be in a position of supervisory authority over him and gave examples of requirements and instructions given to him by the Bishop or the Archdeacon. For example, according to Reverend Sharpe, the Bishop rang him about events at a funeral or memorial service. There was a dispute as to this episode (and the details of the episode are not relevant to this appeal) but the employment judge found that the Bishop gave Reverend Sharpe:

“…a jolly good roasting.” (ET judgment, paragraph 73.5)

But the employment judge found that there was no degree of compulsion or instruction in the correspondence, nor in the minutes of meetings (ET judgment, paragraph 75).

Professor McClean gave evidence that the powers of the Bishop in the Canons were in fact “toothless provisions” and that he had known bishops being reduced to “weeping” because they were unable to interfere in situations not to their liking, or to issue binding directions (ET Judgment, paragraph 77).

The employment judge concluded from all the evidence that:

From all the evidence I have heard, I accept that the Bishop is not in the practice of issuing instructions and the reason for that is because it is known to both him and the priests of his diocese that he has no right to do so in the sense of an employer or a line manager issuing an instruction that the subordinate is contractually obliged to obey. I appreciate that rectors may on occasions defer to their Bishops, accept their greater experience and/or wisdom or simply not wish to create tension by going against their wishes but there is no obligation upon them to do so. If rectors feel so inclined, there is no sanction against their taking their own line. So long as they stay within the confines of the doctrines of the Church and obey lawful instructions on the very limited issues recognised by the Canons in relation to services and do not overstep the boundaries of personal misconduct in their priestly office, it seems to me that the freedom of rectors to go about their cure of souls in the way they see fit according to their own judgment and conscience is a very real one. (ET judgment paragraph 78)

The employment judge was satisfied that there was no sanction against rectors taking their own line. So long as they stayed within the confines of the doctrines of the Church, obeyed lawful instructions on the very limited issues recognised by the Canons in relation to services and did not overstep the boundaries of personal misconduct in their priestly office, the employment judge considered that:

…the freedom of rectors to go about their cure of souls in the way they see fit accordingly to their own judgment and conscience is a very real one.” ( ET judgment, paragraph 78)

If the office of an incumbent was abolished as a result of pastoral reorganisation, this is, to all intents and purposes, a redundancy situation. Full compensation for loss of office, stipend and housing would be payable until retirement age if the priest was not appointed to another office, unless he unreasonably refuses to accept another appointment ( ET Judgment, paragraph 95).

As this section of my judgment shows, the conclusion of the employment judge that there was no contract, or no contract of employment, between the parties was the result of a detailed examination of the facts and the law. The employment judge considered the case law concerning the nature of an ordained minister’s spiritual duties with great care and at length. The most recent decision of the Supreme Court in Preston (formerly Moore) v President of the Methodist Conference [2013] 2 AC 163 was not available at the time of the employment judge’s decision and therefore could not be considered by him. The employment judge then considered whether there was a contract of employment. He directed himself as to the criteria for identifying a contract of employment set out in Ready Mixed Concrete (Southeast) Limited v Minister of Pensions and National Insurance [1968] 2 QB 497, which established that the key issues included control, mutuality of obligation and whether the individual could be said to be carrying on business on his or her own account. The employment judge reminded himself that it was an error to concentrate on the control “test” alone and as the authorities supplied by the parties made clear, he had to have regard to all the circumstances of a case.

The employment judge then considered whether there was a contract of services and whether Reverend Sharpe was a worker. He accepted that section 43K(1)(a) did not call for the worker to be in a contractual relationship at all but merely that he has to work in circumstances envisaged by that subsection. The employment judge noted that the status of worker under section 43K(1)(b) is afforded to someone who is not obliged to perform these services “personally”.

The judge set out the parties’ submissions. He noted that it was submitted on behalf of Reverend Sharpe that, where an office is performed for reward, there is in general also a contract, provided always that some essential ingredient of a contract (which would involve an intention to create legal relations) is not missing or prevents the finding of a contract. Reverend Sharpe relied on the process of application and interview. It was argued on his behalf that it was immaterial that the offer letter (see paragraph 18 above) did not identify specific terms. This was because “everyone knew, from custom of practice, what they were.” There was “in the form of the Bishop’s Papers, the equivalent of a staff handbook (now on a website), setting out the terms and conditions that were not statutory adjuncts to the office of rector.” (ET Judgment, paragraph 132).

The employment judge considered that the spiritual nature of the office was a factor to be taken into account but not determinative (ET Judgment, paragraph 167).

The employment judge concluded that there was no written contract between Reverend Sharpe and the Bishop (ET Judgment, paragraph 168). He rejected the argument that there was a sufficient offer and acceptance and that terms of appointment were known to the parties and expressly incorporated. He said

“For one thing, the appointment did not take effect as a matter of law until due ceremony was observed, and so any contract did not depend upon the will of the parties alone. More importantly, Mrs Miles may have been a party to an agreement that [Reverend Sharpe] be appointed to the office of rector at Teme Valley South but it does not follow that she entered into a contract governing the terms and conditions on which [Reverend Sharpe] was to undertake his duties there.” (ET Judgment, paragraph 168).

The employment judge also rejected the argument that Mrs Miles was acting as an agent for anyone else in making the offer.

The employment judge then set out particular differences between the facts of the previous cases and those of this case: -

173.1

In each of those cases, the claimants' relationships with their Churches depended upon negotiated terms whereas, save for the remuneration package, Mr Sharpe's relationship was defined by ecclesiastical law or, like hours of work and holidays, left, non-contractually, to Mr Sharpe's discretion with guidelines only as to its exercise. In hindsight, I realise that no one asked Mr Sharpe whether he knew the exact amount of the stipend in Worcester or simply that he knew the Central Stipend Authority's minimum recommendation but, in my opinion, it makes little difference. Either way, it was not a freely negotiated sum that played any part in the interview and appointment process. It was something Mr Sharpe accepted went with his office. In my judgment, there are very real difficulties in Mr Benson's attempt to show that the Bishops' Papers were incorporated into a contract. They were not within the contemplation of the parties at the time and they could not pass the "officious bystander" test that they were obviously part of any agreement. They mostly concerned spiritual matters that could not, objectively speaking, be taken to be sufficiently certain to be contractually binding, nor is it likely that they were intended to be. The terms of service section was but one of seven sections and substantial parts of it were guidelines only, lacking in contractual precision. I am not sure it is correct to describe a series of ad hoc policy documents, the applicability of some of which at least was in doubt, as a “Handbook.” The further step of finding that it was one that had been incorporated into a contract of employment in the way terms and conditions were expressly incorporated in the three cases referred to above is one I am not prepared to take on the evidence before me in Mr Sharpe's case. In my judgment, the Bishop's Papers cannot be taken to be contractual documents. On the other hand, all principal terms concerning what Mr Sharpe brought to the relationship concerning his duties, responsibilities and relationships with others in the Church, together with his discipline and machinery for termination of his office were defined by law. Leaving aside for the moment the question of the two named respondents individually, in a broad sense Mr Sharpe did have a legal relationship with the Church but it was of a kind imposed by the law itself, by reason of and consequent upon his appointment to office and not by reference to any intentions on his part or on the part of anyone on behalf of the Church. They had no ability to detract from the terms on which they were bound. Although they had a freedom to contract over and above those terms, Mr Sharpe confirmed to me himself that that did not happen expressly.

173.2.

In each of the cases above, the terms that bound the parties were the creature of the church concerned rather than the law. In Percy and Moore, there were specific terms, such as the 5-year appointment. The inference of the manner in which the terms and conditions were brought to the attention of the would-be appointees, particularly the offer accompanied by full details of the terms of appointment in Percy, is that those terms and conditions, which would have no other existence than by incorporation into the parties' relationship, were indeed intended by them to govern their relationship. Lord Nicholls’ observation that Ms Percy's post had no content other than that given to it by the terms and conditions agreed ad hoc between the parties was applicable to all three cases but it is not applicable to Mr Sharpe's case.

173.3.

In each of the other cases, there was a readily identifiable person or body with whom the contract was made. I will return below to the claimant's difficulty in that respect.

The employment judge held that there was no need to imply a contract because the terms of his appointment were incidents of his office anyway:

“…I believe that Mr Tattersall is correct that what remains unscathed [in Percy] is the observation that Dr Coker’s office, and consequently the claimant’s, and their relationships with the Church were defined by law and there was consequently no need or room for the implication of a contract between them. Mr Tattersall referred to Tilson and suggested that it was fatal to the claimant’s case that all concerned would have acted exactly as they did in the absence of a contract. That it would have been so, I have no doubt. I prefer those arguments to the one that suggests automatic incorporation of the terms of office, however defined into a consensual contractual relationship, an argument which I have rejected for the reasons given above.” (ET Judgment, paragraph 174)

The employment judge rejected the argument that the lack of a statutory remuneration package led to the implication of a contract. He held that the payment of money for the discharge of an office did not automatically imply a contract between the parties. The employment judge concluded that the case was not one where the intention to create legal relations was paramount.

“It was a case where there was no agreement freely negotiated between two parties. I am unable to identify the content of any agreement (other than the bare fact of [Reverend Sharpe’s] appointment to office) that was reached by two (or more) identifiable parties whose minds could be said to be ad idem on matters that require me to suppose they had an intention to create legal relations”. (ET Judgment, paragraph 176)

He found that Reverend Sharpe was content to rely upon traditional arrangements and could have no expectation of, and there was no intention to create, a legal relationship which was specific to him (judgment, paragraph 176).

The employment judge did not find that there could be a contractual relationship between Reverend Sharpe and the Bishop. The Bishop had not undertaken to pay any remuneration and had no control over the necessary funds. His powers to instruct or supervise Reverend Sharpe were not extensive and were defined by law. They did not arise from any consensual arrangement (ET Judgment, paragraph 178).

The employment judge considered whether there was fragmentation of responsibility within the Church. However, in his judgment, there was no person or body in so close a relationship with Reverend Sharpe of whom it could be said, in the terms of Lord Hope in Percy v Board of National Mission of the Church of Scotland [2006] 2 AC 28that they were “the body in whose name the matter at issue had been conducted” or who had in any way assumed contractual responsibility for the range of respective duties and responsibilities that were inherent in Reverend Sharpe’s position as rector. I would add that Lord Hope added (at [117]) that it would be that body that should be sued.

The employment judge concluded that there could likewise be no implied contract between Reverend Sharpe and the Bishop:

“I do not see that within the complex statutory structure of the Church it is possible to imply […] any relationship between a freehold rector in the Church such as the [Reverend Sharpe] and any identifiable person or body which could be said to be consensual and contractual.” (ET Judgment, paragraph 181)

The employment judge then turned to the question of whether the claimant was a “worker”. As regards section 43K(1)(a)(i) he held that he was not convinced that the claimant was “introduced or supplied” to do his work by a third person. That third person could not have been Mrs Miles. Reverend Sharpe had introduced himself to whomever it could be said he worked for. In any event the terms and conditions were not negotiated. He held that subsection (1)(a)(ii) referred to terms capable of legal enforcement. It was common ground that the purpose of the subsection was to protect agency or contract workers. Subsection (1)(b) did call for a contractual relationship. The employment judge did not consider that the words “for the purposes of that person’s business” would have been a barrier to Reverend Sharpe. But in this case, Reverend Sharpe had considerable autonomy so Teme Valley South was not “within the control or management” of any person with whom Reverend Sharpe might have contracted.

The employment judge went on to hold that he would not have concluded that any contract was a contract of employment for three reasons: (1) the lack of supervision and control by the Bishop; (2) Reverend Sharpe’s power to delegate, which meant that he was not agreeing to act personally, as required by section 230, and (3) although Reverend Sharpe invoked custom and practice, that supported the conclusion that there was no contract of employment between a rector and his bishop.

The first ground of appeal to the EAT was that in essence that the employment judge had failed to apply case law binding on him. The judge accepted Mr Bowers’ submission that the focus should have been on whether there was an express contract between Reverend Sharpe and the Bishop having regard to the rules and procedures of the Church and the particular arrangements made with Reverend Sharpe (EAT Judgment, paragraph 179).

The judge took the next three grounds of appeal together, namely (2) failing properly to analyse whether there was an offer of a contract, (3) errors in the analysis which led to the conclusion that there was no contract, and (4) errors in the failure to identify the Bishop as the appropriate contracting party. The judge held that the conclusion that Reverend Sharpe’s relationship with the Bishop was defined exclusively by ecclesiastical law led the judge into error in a number of respects as regards the existence of a contract. In particular, the EAT considered that the employment judge’s conclusion that the Bishop’s Papers could not be regarded as a contractual document “flies clearly in the face of the requirement for a full analysis of all the relevant documentation required by Preston.” (EAT Judgment, paragraph 196).

The judge also held that the Bishop’s Papers ought to have been examined. She pointed to the fact that the Bishop’s Papers dealt with hours of work, sabbatical leave, leave, resettlement grants, removal expenses, sick pay, stipend and so on.

The last ground of appeal was that the employment judge had erred in law in failing to identify the Bishop as the appropriate contracting party. The judge considered the key error to be that the limited powers defined by Canon law precluded any consensual, contractual arrangements. She considered that the fact that the stipend was payable by the Church Commissioners and that the Bishop could not instigate disciplinary proceedings fell comfortably within the caution expressed by Lord Nicholls as to the “fragmentation of functions” at paragraphs 27 and 28 of Percy. She did not consider other arguments as to perversity on the part of the employment judge, holding that the precise role of the Bishop required careful examination and analysis that would have to be remitted to the ET.

The judge went on to deal with the expert evidence of Professor McClean. She held that the employment judge was in error in failing to consider its admissibility (EAT Judgment paragraph 228). She considered that, despite his self-direction to exercise caution, the employment judge had in fact not drawn the line he had set for himself but instead accepted much of Professor McClean’s evidence uncritically. As to section 43K(1), the judge held that the correct approach was that laid down by the EAT in Croke v Hydro Aluminium Worcester Ltd [2007] ICR 1303 in the context of whistleblowing and that it is appropriate to interpret the provisions so far as one properly can do so to provide protection to the whistle blower, rather than deny it. She held that the employment judge had erroneously adopted a restrictive interpretation of the relevant provisions of section 43K(1). In particular she held that, properly construed, the words “terms on which he is or was engaged to do the work” do not imply the existence of a contract.

The judge decided that the employment judge was wrong to hold that Reverend Sharpe had an unfettered right to delegate. She held that Reverend Sharpe could only delegate if he was unable to discharge his duties and only to a priest licensed or approved by the Bishop. The judge concluded that the power did not detract from the personal obligation to carry out his work.

The judge held that the case should be remitted to the employment tribunal for the case to be reconsidered in accordance with her judgment.

Not long ago, no one entertained the idea that, at least in a church where individual churches are subject to an overarching organisation, a minister of religion could be an employee of the religious organisation for which he worked. Several reasons were given for this: that the duties of office were spiritual or that the minister held an office (and that holding of an office was exclusive of employment) or that there was a presumption that the parties did not intend to create legal relations or that the duties were prescribed by the special institutional framework of religious law. Slowly but surely, as a brief description of the major cases that follows will show, some of these reasons have been displaced. The law has developed and changed because it was difficult to justify the exclusion of ministers of religion from the benefit of modern employment protection legislation. I would go so far as to say that there is now no rule which applies only to ministers which does not also apply to other persons who claim to be employees although of course the facts to which the law has to be applied are very different. It is the same principles which have to be applied.

Originally the courts held that ministers of religion could not be employees because of the spiritual nature of the functions of the minister in the absence of clear indications to the contrary: President of the Methodist Conference v Parfitt [1984] QB 368.

Diocese of Southwark v Coker [1998] ICR 140, a decision of this court, concerned an assistant curate of a Church of England parish who acted under a written licence executed by the bishop. He did not hold an office. This court held that he too was not an employee: his functions were set out in the Ordinal in the Book of Common Prayer. The significance of that case for the purposes of this appeal is that this court considered the position of an incumbent. Mummery LJ expressed the view that there was a presumption against the creation of legal (that is, contractual) relations where there was a pre-existing legal framework and there would need to be clear evidence of an intention to create legal relations to displace this:

The legal implications of the appointment of an assistant curate must be considered in the context of that historic and special pre-existing legal framework of a church, of an ecclesiastical hierarchy established by law, of spiritual duties defined by public law rather than by private contract, and of ecclesiastical courts with jurisdiction over the discipline of clergy. In that context, the law requires clear evidence of an intention to create a contractual relationship in addition to the pre-existing legal framework. That intention is not present, either generally on the appointment of an assistant curate, or in the particular case of Dr. Coker. I would add that it has never been held, and it is not suggested by Mr. Hage in this case, that the incumbent of the parish, holding its church and its benefice, is under a contract with the bishop or with anyone else in respect of his cure of souls in the parish.

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. I respectfully agree with Parker J. in In re National Insurance Act 1911 [1912] 2 Ch. 563, 568 and 569 that the position of an assistant curate is:

“not the position of a person whose duties and rights are defined by contract at all. It appears to me that there can be no pretence in reality for arguing that the relation between him and his vicar, or between him and his bishop, or between him and anyone else, is the relation of employer and servant.”

In his judgment, Staughton LJ expressed the same view about the lack of intention to enter into legal relations because of the spiritual nature of the duties. The third member of the court, Waller LJ, agreed with both judgments.

In the next case, Percy v Board of National Mission of the Church of Scotland the House of Lords gave little weight to the presumption which this court had favoured in Coker. In that case the applicant claimed that she was a worker for the purposes of the Sex Discrimination Act 1975. She had a document showing her salary, right to accommodation and so forth in exchange for performing the services of an associate minister. The Inner House of the Court of Session took the view that she had not rebutted the presumption that there was no intention to create legal relations. The House reversed that decision and held that she was a worker for discrimination purposes. Lord Nicholls held that, in these days of statutory employee protection, “employment arrangements” between a church and its minister should not lightly be taken as intended to have no legal effect (paragraph 26). Lord Nicholls also held that the fragmentation of functions within a Church, such as the Church of England, under which different functions would be delegated to different organs of the institution, might make it difficult to pin the role of employer on any particular board or employee but “internal fragmentation ought not to stand in the way of otherwise well-founded claims” (paragraph 28). Lord Hoffmann dissented in the result but agreed that it was not helpful to say that there was no intention to create legal relations. The question was what legal relations it was intended to create. The applicant’s duties were not contractual but duties of her office. The other members of the House agreed with Lord Nicholls’ analysis. Lady Hale also specifically rejected the relevance of a presumption against an intention to create legal relations (paragraphs 148 and 151).

A further case then came before this court, New Testament Church of God v Stewart [2008] ICR 282 (Pill, Arden, Lawrence Collins LJJ) in which this court upheld the finding of the ET that the minister in that case was an employee. Pill LJ held that the effect of Percy was that it was no longer necessary for the fact-finding tribunal to approach the question of whether there was an employment contract on the basis that the parties should be presumed not to have intended to make a binding contract unless the contrary was shown. Lawrence Collins LJ and I agreed with Pill LJ on this point. Pill LJ noted that the House had not overruled any earlier case. This is important because it emphasises that each case ultimately turns on its facts.

Finally (so far as this summary of case law is concerned), the Supreme Court in Preston (formerly Moore) v President of the Methodist Conference [2013] 2 AC 163 held that the question whether a minister of religion was an employee depended on the terms of the parties’ agreement, but (by a majority) on the facts that the parties’ agreement in this case did not amount to an employment contract. Lord Sumption JSC, with whom Lord Wilson and Lord Carnwath JSC agreed, held that the question whether there was an express employment contract was not answered by simply asking whether there was an office or employment, spiritual or secular. Nor could it be answered by any presumption that there was no intention to create legal relations. It was an exercise in contractual interpretation like any other (see judgment, paragraph 10). Lord Sumption rejected the argument that, if there was no express employment contract, the court had to consider whether to imply one. “Necessity” he said “does not come into it”. (Judgment, paragraph 12). Lord Sumption examined all the surrounding evidence as to the arrangements governing the ministry in the Methodist Church and concluded that the parties’ exchange of letters had to be viewed in the context of the Church’s constitution, and when so viewed it was clear that the parties did not intend a contractual relationship. He added at the end of his judgment, without deciding the point, that he thought that, where Church property was held on trust, the right to stipend or possession of the manse and so on could be enforced through the trust. Lady Hale dissented on the basis of her interpretation of the arrangements and constitution of the Methodist Church.

Mr Bowers gave the court a short summary of the effect of these cases as follows:

I agree with the summary except for the submission that Coker has been implicitly overruled. I do not consider that that is correct. The reasoning about the presumption that a minister of religion does not intend to create legal relations when he enters what might otherwise be an employment contract with his religious organisation is no longer good law, but the decision itself has not been overruled or its essential reasoning further criticised.

Having set out the facts of this case at some length and explained the recent developments in the case law in this area, I can take the issues that I have identified more shortly.

The principal submission of Mr Thomas Linden QC, for the Bishop, is that the employment judge found that there was no contract, express or implied, between the Bishop and its incumbent: see ET judgment, paragraphs 168 and 174, both quoted above.

Mr Linden submits that the EAT was mistaken in thinking that the ET had not dealt with the question whether there was an express contract. It had clearly done so. It found that there was no negotiation of the terms as to stipend, housing and so on. I accept this submission.

The position of Reverend Sharpe before the ET was complicated by the fact that there was a concession at a case management conference that he was a worker. The ET allowed this concession to be withdrawn and there is no appeal against that. It was contended on his behalf at that stage that he was an employee of (among others) the Bishop and/or the WDBF.

At one stage, Mr Bowers’ case was that Mrs Miles engaged Reverend Sharpe by presenting him to the benefice as the Bishop’s agent with respect to the appointment. So her letters were written as an agent of the Bishop, just as a recruitment agency would find and source people. Mr Bowers did not in the event press this submission. There was a plain finding of the ET rejecting this argument on the facts.

Mr Bowers’ primary case on express contract before us was that the ET was wrong to hold that there was no express contract. He relies on the exchange of letters leading to appointment, alternatively the deed of institution. I have summarised those documents above. The argument that these documents constituted an express contract of any relevant kind is plainly unsustainable. As Mr Linden points out, there is nothing in its express terms to indicate that this was an employment contract. There was no error of law in interpreting those documents. Reverend Sharpe is clearly bound by the findings of fact of the ET. There is no doubt that the finding of fact that there was no express contract between Reverend Sharpe and the Bishop was plainly open to the ET.

Mr Linden submits that the employment judge also considered the question whether that was an implied contract. He found that there was no implied contract: see ET judgment, paragraph 174 (see paragraph 45 above). The ET concluded that there was no need for an implied contract because the duties to be performed by Reverend Sharpe were in any event incidents of his office as rector.

Mr Bowers submits that the ET’s conclusion on implied contract was wrong in law on the basis that:

Mr Bowers’ submission is based on Lord Sumption’s holding that “[n]ecessity does not come into it” in Preston (see paragraph 66 above). In effect, Mr Bowers submits that the well-established case law as to when to imply a contract did not apply. In my judgment, that is to misunderstand what Lord Sumption was there saying. The argument under consideration was whether, if there was no express employment contract, the court should imply one. By contrast, the employment judge was dealing with the well-established law that a contract should not be implied unless the party seeking to establish such a contract shows that it is necessarily to be implied (see Tilson v Alstom Transport [2011] IRLR 169 at [8] to [103]). As Bingham LJ put it in The Aramis [1989] 1 Lloyd’s Law Reports 213 at 224, it is not sufficient that the conduct relied on for implying a contract was no more consistent with an intention to contract that an intention not to contract. Bingham LJ continued:

It must, surely, be necessary to identify conduct referable to the contract contended for or, at the very least, conduct inconsistent with there being no contract made between the parties to the contract to the effect contended for.

Accordingly, the employment judge did not, when determining whether there was an implied contract between Reverend Sharpe and the Bishop, apply the wrong test or improperly reverse the onus of proof. I therefore reject Mr Bowers’ submission that the employment judge committed an error of law in ruling against Reverend Sharpe on this question.

Mr Bowers submits that the ET lost sight of the fact that “Reverend Sharpe’s primary case was that there was an express contract incorporating and/or evidenced by the Bishop’s Papers.” I will deal with that submission under the next issue.

I conclude that the employment judge found as a matter of fact that there was no contract, express or implied, between Reverend Sharpe and the Bishop, and that there is no basis for setting aside these findings.

In case this case should go further, or I am wrong on the first issue, I must next consider whether, on the assumption that there was a contract between Reverend Sharpe and the Bishop, it was one of “employment” for the purposes of section 230 ERA. For the detailed reasons given in paragraphs 82 to 110, I conclude that Reverend Sharpe was not an employee.

The starting point is to identify the most important indicia of an employment contract. This is commonly done by reference to the indicia set out in the well-known case of Ready Mixed Concrete (South East) Ltd v Minister of Pensions and National Insurance [1968] 2 QB 497, namely an agreement to provide services in exchange for remuneration, control by the “employer” and that other factors are consistent with an employment.

Mr Bowers makes the point that Reverend Sharpe performed services and received a wage (stipend). I have already set out the findings on that. Mr Bowers goes on to submit that it would therefore be most unusual for the court to find that there was no employment contract. I accept the force of that submission but it is of course not an invariable rule. It would therefore obviously be a strong point in his favour if Reverend Sharpe could show that the only way that he could enforce his right to stipend (or his housing or other benefits) is if he could bring proceedings against the Bishop. But I do not think that is made out.

Lord Sumption suggests a possible route to enforcement at the end of his judgment through the law of trusts (see paragraph 66 above). There was no argument before us to contradict that point. It is equally possible, in the case of the Church of England, where salaries are not negotiated, that the position can also be analysed in contract in this way: that there is an open or standing offer by the organs of the Church which provide the funds or other benefits or distribute them to arrange for the stipend to be paid or other benefits to be provided and that this offer is in law accepted by the incumbent when he takes office. Either way, it seems to me unlikely that the Bishop would be held to be responsible in law for the stipend in this case as there is no evidence of any promise by him either on his own account or as agent for another organ.

As the employment judge recognised, the fact that a person is bound by professional or ethical standards does not mean that he cannot be an employee. In those circumstances, however, the employer may exercise only a limited amount of control (Bates van Winkelhof v Clyde & Co LLP [2014] 1 WLR 2047).

Control goes to the question of whether there was a contract of employment. Mr Bowers submits that control identifies the Bishop as the employer. He submits that the oath of canonical obedience represents the highest degree of control by the Bishop. In White v Troutbeck SA [2013] IRLR 949, the court confirmed that the employment relationship was all about residual control. The absence of day-to-day control is not determinative. It is the cumulative effect of the totality of the agreement and all the circumstances of the relationship created by it. He accepts that the existence of the residual right of control is relevant. It is therefore enough in this case the residual control was left with the Bishop. There was no finding of a contract of employment here but that clearly relies on the approach to control: see paragraph 125 and 131.

As to control, Mr Bowers' central submission is based on the oath of canonical obedience. In response Mr Linden cites Calvert v Gardiner [2002] EWHC 1394 QBwhere one of the bases for saying that the Bishop was liable for a nuisance alleged to be caused by bell ringing was that the Bishop could stop the bell ringing by dismissing the Rector or under the oath of canonical obedience. Burton J dismissed the claim that the Bishop had power to discipline only in a limited way and that he had no power to give orders in relation to bell ringing. The canons authorised the vicar and the vicar alone to permit bell ringing.

I do not consider that Mr Bowers can get away from the findings made by the employment judge on this aspect of control. I have set them out already and will not repeat them. The powers of the Bishop in relation to appointment are slight. The powers of the Bishop to control what an incumbent does are exiguous. It is not an answer, as Mr Bowers at one point suggested, that there are employers who contract out disciplinary and termination processes. That may be so but the contractor would be liable to be directed by the employer. Moreover, it is not possible to avoid the force of the evidence of Professor McClean on the toothlessness of the enforceability of the oath of canonical obedience by reference to cases where a claimant has sought to make a bishop liable for nuisance caused by bell-ringing authorised by the parish priest: see, for example, Calvert v Gardiner [2002] EWHC 1394 (QB), cited by Mr Linden. This case has to be decided on the findings of fact in this case.

Following the Ready Mixed approach the next question is whether there was agreement on other terms which are indicative of an employment or otherwise. In this case, that point is advanced by Reverend Sharpe on this appeal through the Bishop’s Papers. Essentially the point is that the employment judge should have approached the question whether there was an employment contract by asking whether there was any contractual term that was not regulated by ecclesiastical law for which the parties might in fact have made a contract. So, before I turn to the Bishop’s Papers, it is convenient first to address the challenges which Reverend Sharpe makes to the conclusion of the employment judge that the space for an employment contract was occupied by ecclesiastical law.

This point provides the context for the contest over the Bishop’s Papers which I have already mentioned. As already explained, the employment judge concluded that there was no agreement on other terms which might be terms of an employment contract because the duties imposed on Reverend Sharpe were not imposed on him by the Bishop but were an incident of his office – they were set by ecclesiastical law (see for example, ET judgment, paragraph 173.1 quoted in full at paragraph 44 above).

The fact that a person is an office holder does not mean that he cannot be an employee. The point that the employment judge accepted was that in this instance there was no contract of employment. The employment judge’s conclusion is in line with the holding of Mummery LJ in Coker. While the House of Lords in Percy did not accept the view of Mummery LJ that it should not be assumed that in this situation the parties intended to enter into a contract unless there were special circumstances, they did not cast doubt on his further holding (set out in the first paragraph of the citation in paragraph 62 above).

The approach of the Supreme Court in Preston shows that it is not an inevitable outcome that the court will seek to imply a contract of employment in every case of a minister of religion (see per Lord Sumption: “Necessity does not come into it.”). The facts must be looked at in the individual case and in the round (see, for example, Autoclenz v Belcher [2011] IRLR 820 at [34], [35], Edmonds v Lawson [2000] 2WLR 1091 at [23] and Modahl v British Athletic Federation Ltd [2002] 1WLR 1192). In this case, the absence of an employment contract is supported by a number of other matters. The first is the fact that the appointment was carried out by the patron in exercise of a right of patronage, which is a property right. (As explained, Mr Bowers did submit at one stage that Mrs Miles must have been an agent for the Bishop but he did not pursue that submission). In fact the Bishop had only very limited powers to refuse her selection. The second point is that the Bishop undertook no obligation to pay the stipend to Reverend Sharpe. This is another indication that the parties did not enter into any employment contract. Third, there was no negotiation between them about Reverend Sharpe’s terms of service. Fourth, the Bishop had no power to terminate Reverend Sharpe’s appointment: the details of how it could be terminated were carefully investigated by the employment judge. Fifth, the Bishop had negligible disciplinary powers over Reverend Sharpe.

It is convenient to mention here the criticism which the EAT made of paragraph 178 of the judgment of the employment judge, which the EAT read as saying that it was wrong to suggest that the Bishop was precluded from entering into a contract of employment by reason of the restrictions on his powers in canon law (EAT judgment, paragraph 218). It is clear from Percy and Preston that it would be wrong for the employment judge to suggest that canon law might preclude or prevent an employment contract. However, I do not consider that that the employment judge was making that point. I read him as making the same point as was made in the preceding paragraph, namely that the restrictions on the Bishop’s powers to act as an employer would normally act are contra-indicative of an employment contract.

Mr Bowers relies on R(Nangle) v Lord Chancellor’s Department [1992] 1 All ER 897, in which the Divisional Court held that, if there was an exchange of promises, prima facie there would be an intention to create legal relations. I do not think that takes the matter any further because the primary question on the facts as found was whether there was such an exchange of promises.

The Bishop’s Papers are a major plank in Reverend Sharpe’s case on this appeal. Mr Bowers submits that the Bishop’s Papers were sent shortly after the appointment. Even though Reverend Sharpe did not know about them at the time his appointment took effect, the matters in the Bishop’s Papers could still become terms of his employment contract thereafter. On his submission, it was very common for a staff handbook to be given to a new employee only after he had been taken on. Not every part of the Bishop’s Papers was appropriate for incorporation into the contract of employment, but there were a number of matters dealt with in the Bishop’s Papers which were clearly indicative of a contract of employment and could therefore be taken to be part of it: these terms included provisions as to appraisal, continuing education, holiday entitlement, details of the car loan scheme operated by the Church Commissioners, life assurance, grants, central purchasing scheme, seeking a move and retirement. Mr Bowers submits that the Church has covered day-to-day practical issues in the Bishop’s Papers and this distinguishes the case from Coker. It was irrelevant that the Bishop’s Papers applied also to parish officials. In short “the whole space” (the relationship between the parties) is not covered by ecclesiastical law.

As to paragraph 173.1 of the ET judgment, Mr Bowers submits that the Bishop’s Papers were not analysed here or in paragraph 168. It must have been within the contemplation of the Church that they would be handed on. He accepts, however, that the claimant gave no evidence about the Bishop’s Papers. Nonetheless he submits they have to be construed as to whether they are a term of the contract. The parties must have anticipated that they contained terms over and above the Ordinal.

Mr Bowers relies on Ferguson v Dawson [1976] 1 WLR 1213 as an example of a case where this court had held that a contract of employment was to be implied. But the facts of that case were far removed from the facts of this case. Mr Bowers goes on to submit that the EAT held that it was the wrong approach to find that there was no contract. The ET should have found that the Bishop’s Papers were part of the contract. Mr Bowers submits that the EAT was correct to find that the ET’s conclusion was perverse. The EAT has given the proper analysis.

Mr Linden’s case is that it was not put to the ET on behalf of Reverend Sharpe that there was any express agreement over and above the fact of appointment. Reverend Sharpe did not therefore make any case about the terms of any such contract. Moreover, he submits that very little evidence was given by Reverend Sharpe about the Bishop’s Papers. He made only passing reference to them in his witness statement. He did not suggest that they formed part of his contract: even in opening submissions to the EAT he did not go further than suggest that there was an express agreement as a result of his appointment. It is, Mr Linden submits, too late for Reverend Sharpe to seek to rely on it now because the employment judge found that it was not a contractual document.

Mr Linden further submits that the Bishop’s Papers do not indicate that there was a contract of employment. It began with an introduction which made it clear that it was a collection of information for both priests and churchwardens and that the information was previously contained in separate publications. This introduction was not consistent with its being a staff handbook. In any event, there was no evidence to that effect before the ET. Moreover the package or book was to be left in the parsonage after the rector left and that was indicative of the fact that it did not contain terms of an individual employment contract between Reverend Sharpe and the Bishop.

Mr Linden further submits that the EAT’s criticisms of the employment judge for not having given greater weight to the Bishop’s Papers or investigated them further was ill-founded because all the employment judge could do was make findings on the evidence presented to him, and it cannot be said that the findings were perverse.

In my judgment, Mr Bowers draws what at first sight is an attractive analogy between the Bishop’s Papers and a staff handbook. Matters are dealt with in the Bishop’s Papers which might have been in an employment contract and thus the Bishop’s Papers are indicative of a contract of employment. His approach is consistent with the authorities on determining whether a person is an employee. In a case such as this, where there is no single document, the court has to sift through the surrounding facts and circumstances to see whether in reality there was a contract of employment. The fact that the parties did not call it an employment contract or did not recognise it as such would be neither here nor there.

However, that all depends on the makeup, purpose and content of the Bishop’s Papers. Some matters contained in this collection of papers are framed as guidelines, which is consistent with there not being an employment contract rather than with the existence of such a contract. If Reverend Sharpe intended to establish that the Bishop’s Papers contained terms indicative of an employment contract, he had to investigate the matter fully at the trial.

As it was, the employment judge made clear findings against him on the Bishop’s Papers. Given the limited material before the employment judge, it cannot be said that these were not findings that he was entitled to make. In my judgment, the EAT did not go that far. The EAT’s point is that the matter could have been investigated more thoroughly. But that is to recognise that there had to be more evidence if the Bishop’s Papers were to be held to be part of an employment contract. Reverend Sharpe is not entitled to a second bite of the cherry on this. The appeal on this point in my judgment succeeds.

Another factor on which Mr Bowers relies is what he submits to be the fragmentation of functions in the Church of England. The ET did not consider that the fragmentation argument led to the conclusion that there was any body who was the employer (see paragraph 48 above). There is no doubt that there was fragmentation between such functions as the payment of stipends and pensions, ministry and the pastoral care, and the care of churches. The Bishop did not and could not agree to pay the stipend but if this is a case where fragmentation has to be disregarded that fact would not necessarily matter. The term “fragmentation” is often used to cover those situations where the “employer’s” functions are split in order to avoid responsibility under employment protection legislation whereas in this case fragmentation occurs because it is a natural feature of the institutional structure of the Church of England.

There is no doubt that the courts must not allow fragmentation to prevent a person from exercising his rights as an employee. But that can only be so where the employee can show that he would have had a remedy arising out of an employment contract if there had been no fragmentation. But that cannot happen in this case because even if all the constituent parts of the Church of England were merged together, Reverend Sharpe would still be unable to deal with the point I have already made, namely that there was no one legal person with whom there was an exchange of promises to do work in exchange for a wage. There was no need for promises as to, for example, the duties of the rector which were to be found in ecclesiastical law.

One might think that the employer must have been the Church of England but as I have already explained, the Church of England is not a legal person. No case was run against the Church of England as such. Moreover no proper evidential basis for it was laid before the ET. The employment judge made it clear that the organisation of the Church of England was simply not fully investigated in the evidence:

As the established Church, the Church of England has occupied a central position in English society for several hundred years. Despite that, it has no legal personality. It cannot sue or be sued. The evidence conveyed to me the impression that rather than being one body with a centralised structure of administrative authority, function, control and direction, the title "Church of England" denotes an amalgam of what sometimes seemed an infinite number of bodies with no precise or clear picture to an observer such as myself (as opposed to an expert like Professor McClean) of how the various jigsaw parts interact and fit together. That situation has come about, I believe, because of the piecemeal approach of legislation over the years amending a diverse range of ancient traditions. The ultimate authority to restructure lies with the Church's parliament, the General Synod, subject to the approval of the Westminster Parliament. (ET Judgment, paragraph 14)

Mr Bowers then relies principally on Percy. He submits that it was sufficient in that case to show that Ms Percy was a worker. She did not have to establish a contract of employment. Mr Bowers submits that the modern view of an office is that it would be highly unusual for there to be an office without a contract of employment. In Percy, Mr Bowers submits, there was a decision of the Inner House or a concession that she did not have to show a contract of employment. Paragraph 25 of Percy shows that there is no reason for holding that the outcome is not different dependent on whether the agreement to perform work is spiritual in nature. It is necessary to look at the matter realistically otherwise there is a danger of reintroducing the presumption that there is no contract where the duties are spiritual by the back door.

I accept it is essential that the court looks at the substance of the matter to do full justice in this case. In a situation where the shadows of history and tradition are as long as they are here, the court has to be sure that the form does not obscure the present day substance. But, as Preston shows, the need to look at the realities cannot require one to disregard the legal arrangements and what they objectively convey. The matter, as I see it, standing back from the sheer welter of detail in this case, is, on the evidence, to be analysed in this way. A rector assumes office not simply because he or she is selected at interview but because he or she is installed as rector. That is not to be discounted as just another ceremony. As a clergyman, Reverend Sharpe must as part of his installation demonstrate his commitment to follow his calling by making the oath of Canonical obedience in the presence of the Bishop and his parishioners. In exchange for that, the Church provides him with the facilities to discharge his calling – stipend, housing, assistance with cars, and guidance on holidays and so on: there is an open offer by the appropriate organs of the Church to make those facilities available so there is no need for them to be discussed. They are taken as read. Any incumbent is expected to behave responsibly and given considerable freedom to take care of the souls of his parishioners in the way he considers appropriate. But, for a mixture of historical and ideological or theological reasons, the Church has little power of control over the way an incumbent discharges his functions or to remove him from his post. The reality is that that is not the point of the appointment. Put another way, by accepting office as rector he or she agrees to follow their calling. They do not enter into an agreement to do work for the purposes and benefit of the Church as a commercial transaction. On the facts as found by the employment judge, the Church, personified in these proceedings by the Bishop (in his corporate capacity), provides the institutional structure in which the incumbent can indeed follow his or her calling to be part of the ministry. The office of rector is governed by a regime which is a part of ecclesiastical law. It is not the result of a contractual arrangement.

I have considered the opposite analysis, and I admit that my mind has wavered between the two. It can be said that a rector is doing nothing on taking office other than agreeing to work for the Church in exchange for stipend and other benefits. That analysis, however, ignores the role played by the duties imposed by ecclesiastical law and the freedom given to pursue them. The opportunity for the hierarchy of the Church to intervene in the performance of duties is reduced in practice to vanishing point or at least to the minimum. I have found it impossible to think of a professional person in an employment situation who would have the same level of security of tenure and independence of action, and certainly none has been suggested in the course of this argument.

Going beyond the evidence to make a point of wider interest in this year of the 800^th Anniversary of Magna Carta, (sealed in 1215 - well before the establishment of the Church of England in the time of Henry VIII), the very first clause of that instrument was that the English Church should be free.  The value placed on freedom by the institution is obvious.  That would, I think, include freedom of thought and conscience for individual incumbents, free from interference by parishioners or the Church’s hierarchy.  I take no account of that point in forming my judgment as the appellant took no point on it.  But freedom has been a defining ethos: see, for example, section 9(6) of the 2009 Measure summarised in paragraph 9 above.  There is, as Lewison LJ points out, another interesting point in Magna Carta for the purposes of this appeal, namely clause 18 of the 1215 version, which sought to confine disputes about the exercise of the right of patronage (then called “darrein presentment”) to local court sessions.  This demonstrates the length of the history attached to the right of patronage.  Moreover, according to my researches, it touches on the point that, from as long ago as mediaeval times (through the influence of canon law), our land law recognised the right of patronage as a right of property, separate from that in the church building itself,  and from that developed the valuable concept of incorporeal hereditaments, to which Lewison LJ refers in his judgment.

For the reasons given above, I conclude that, on the facts as found by the employment judge, there was no employment contract between Reverend Sharpe and the Bishop and that the EAT fell into error in making criticisms of the employment judge’s conclusions.

“WORKER” ISSUE

A worker is a person who cannot establish that he is an employee. It is common ground that section 43K(1) was enacted primarily to protect agency workers.

The conclusion which I have reached above that there was no contract means that there is also no contract for the purposes of section 43K(1)(b). The only question is whether there also needs to be a contract for the purpose of section 43K(1)(a). The EAT held that on the true interpretation of this provision there was no requirement for a contract.

Mr Bowers essentially submits that where Parliament refers to contract, it uses the word “contract” and so when it refers to “terms” there need be no contract. Mr Linden submits that this is wrong. The word “terms” is used because there have to be terms imposed. The sub-section is not intended to apply to non-contractual situations: it has likewise been held that measures to combat discrimination to persons in their occupations do not apply to volunteers: X v Mid-Sussex Citizens Advice Bureau [2013] 1 All ER 1038.

In my judgment this is a short point. It must inevitably follow from the statutory reference to “term on which he is or was engaged to do work” that there must be a contract.

So this part of the claim also fails in law and the appeal on it should in my judgment be allowed. In those circumstances it is unnecessary to deal with the other arguments raised on this provision, including the effect and scope of the power of substitution vested in Reverend Sharpe.

THE PROFESSOR McCLEAN ISSUE

The employment judge admitted the evidence of Professor McClean, a Professor of law at the University of Sheffield, whom the employment judge found was an acknowledged expert in the field of ecclesiastical law. The employment judge accepted that Professor McClean did not always confine himself to straightforward facts. His evidence contained comment and opinion. The employment judge treated his evidence to that extent with caution and had been careful to separate fact from advocacy because the Professor’s opinions sought at times to answer the very questions the employment judge had to determine himself.

The employment judge found that he preferred Professor McClean’s knowledge of the legal status of particular aspects of the Church and the clergy’s duties, rights and responsibilities to that of Reverend Sharpe. The employment judge said that he preferred Professor McClean’s evidence on issues of fact but had formed his own conclusions.

The EAT was highly critical of the admission and use by the ET of the evidence of Professor McClean.

Mr Linden submits that the criticisms were not well founded. First, as to admissibility, Professor McClean’s witness statement contained evidence of both law and practice. Second, under the ET rules the normal rules of evidence do not apply. The employment judge therefore had discretion to admit this evidence. Third, the recent decision of this court in Rogers v Hoyle [2014] EWCA Civ 257, [2014] 1 WLR 148 establishes that, where expert evidence is sought to be admitted and some of it is admissible and some inadmissible, the court should not rule it out before admitting it in evidence, but admit the whole and then rule it out. Mr Linden submits that this principle applies here. Fourth, Reverend Sharpe took no objection to the admission of Professor McClean’s evidence. The skeleton argument filed on his behalf did not object to the admission of this witness statement but simply made the point that some statements in it were made as an advocate. Fifth, at paragraphs 11 to 13 of his judgment, the employment judge directed himself carefully and went on to form his own judgment on this evidence.

As respects the evidence of Professor McClean, Mr Bowers submits that he should not have been allowed to give evidence. He relies on the dictum of Leggatt J at first instance in Rogers v Hoyle [2013] EWHC 1409 (QB), [2014] 1 WLR 148 at [59]that the judge must not defer to the opinion of anyone else. That dictum does not take the present issue any further. The employment judge was rightly conscious of that.

I agree with Mr Linden’s submissions. The employment judge was entitled to admit and deal with the evidence of Professor McClean as he did. Mr Bowers did not give us any examples of any perversity on the ET’s part in accepting the evidence of Professor McClean. He sought rather to argue that the employment judge had accepted expressions of opinion from Professor McClean as to the effect of ecclesiastical law which the ET should have determined for itself. The ET was not itself an expert in this body of law. The interpretation of canons is not simply a matter of dictionary definitions any more than any other law. In my judgment, the ET was justified in taking the course it did, and this part of the EAT’s order cannot stand.

For the reasons given above I would allow the appeal and reinstate the order of the employment judge.

RELEVANT STATUTORY DEFINITIONS OF “EMPLOYEE” AND “WORKER”

230 (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.

(3)

In this Act “worker” (except in the phrases “shop worker” and “betting worker”) means an individual who has entered into or works under (or, where the employment has ceased, worked under)—

(a)

a contract of employment, or

(b)

any other contract, whether express or implied and (if it is express) whether oral or in writing, whereby the individual undertakes to do or perform personally any work or services for another party to the contract whose status is not by virtue of the contract that of a client or customer of any profession or business undertaking carried on by the individual.

and any reference to a worker's contract shall be construed accordingly.

(4)

In this Act “employer”, in relation to an employee or a worker, means the person by whom the employee or worker is (or, where the employment has ceased, was) employed.

(5)

In this Act “employment”—

(a)

in relation to an employee, means (except for the purposes of section 171) employment under a contract of employment, and

(b)

in relation to a worker, means employment under his contract;

and “employed” shall be construed accordingly….”

43K (1) (Footnote: ¹)     For the purposes of this Part “worker” includes an individual who is not a worker as defined by section 230(3) but who—

(a)

works or worked for a person in circumstances in which—

(i)

he is or was introduced or supplied to do that work by a third person[the patron], and

(ii)

the terms on which he is or was engaged to do the work are or were in practice substantially determined not by him but by the person for whom he works or worked [the Bishop], by the third person [the patron] or by both of them,

(b)

contracts or contracted with a person [the Bishop], for the purposes of that person's business, for the execution of work to be done in a place not under the control or management of that person and would fall within section 230(3)(b) if for “personally” in that provision there were substituted “(whether personally or otherwise)”…”

As I see it, the subtext of the argument on behalf of Reverend Sharpe is that the position of an incumbent of a benefice should be looked at in a way which accords with modern notions and practices. Such individuals work hard, often in difficult circumstances, performing valuable functions within their parishes and receiving a stipend. It is, in effect, said that they ought now to be regarded as employees and ought to have the rights that others have under the employment legislation.

I have quite a lot of sympathy for this approach. But I do not think that it can prevail in this case.

In Coker it was taken as a given that the incumbent of a parish was not appointed under any contract with the bishop or anyone else: per Mummery LJ at p.147H – 148A. In Percy the argument proceeded on the footing that the applicant, an ordained minister of the Church of Scotland, was not appointed under a contract of service. It is right to note that there are observations in the speeches of Lord Nicholls, in particular at paragraphs 25 and 26, and of Lady Hale, in particular at paragraph 151, which might be taken as supportive of a suggestion that ministers of religion should nowadays be brought into alignment, in terms of employment protection, with others. But the common law has not developed further in this regard.

Thus in Stewart, decided in the aftermath of Percy, it was held that there could be no general finding that ministers of religion are employees. Cases must depend on their own facts, which may vary from church to church and from religion to religion: see paragraph 55 of the judgment of Pill LJ. In Preston, the Supreme Court, by a majority, declined to accord the status of contractual employee to the respondent Methodist minister. It was emphasised in that case that part of the relevant background by which the parties’ intentions were to be ascertained was the “fundamentally spiritual purpose” of the functions of a minister of religion: see paragraph 10 of the judgment of Lord Sumption. Further, the doctrinal reasons which a church may have as to the lack of need for relevant arrangements cannot be ignored: see paragraph 34 of the judgment of Lord Hope.

Turning then to the circumstances of the present case I am not able to discern from the arrangements that, viewed objectively, there was an intention to create a contract: which would presumably operate in some way ancillary to ecclesiastical law. To the contrary, they indicate that there was no such intention. It is not suggested that the exchange of letters between Mrs Miles and Reverend Sharpe gave rise to any contract, let alone one binding on the bishop. No assignment or novation, binding the bishop, of any prior contract was or could be asserted. The induction ceremony could not of itself connote the making of a contract on the part of the bishop. Further, the fact that such arrangements as there were included the payment of a stipend, the provision of accommodation and the performance of recognised duties also cannot of themselves connote a contract binding on the bishop or resolve the issue in favour of Reverend Sharpe.

Nor was the evidence of the degree of control on the part of the bishop, such as it was, such as to suggest a contractual or employment relationship. I also note that, as recent decisions on vicarious liability in the case of Roman Catholic priests indicate, a degree of control capable of supporting a finding of vicarious liability can co-exist with a position where there assuredly is no contract of employment.

As to the Bishop’s Papers, I cannot accept that, given the entire context, they were intended to create or evidence, or could objectively be understood to create or evidence, a contract of employment: as, indeed, the words of the Introduction themselves make plain.

I do appreciate the point that for an incumbent in the position of Reverend Sharpe to have no protection as an employee could give rise to uncertainties as to the availability of a remedy in the event of, say, withdrawal of his accommodation or non-payment of his stipend. But while Mr Linden was not able to point categorically to a means whereby a remedy would be available, Mr Bowers was himself not able to be categoric that no remedy would be available. I observe that, at paragraph 28 of his judgment in Preston, Lord Sumption suggested one possible remedy: but, be that as it may, any residual uncertainty on that score was not considered to be a bar to the conclusion reached in that case. I also note that – as a matter of ecclesiastical law – certain protections have in fact since been provided in the Ecclesiastical Offices (Terms of Service) Measure and Regulations of 2009.

I have had the opportunity of reading the judgments of Arden LJ and Lewison LJ. In agreement with them and with their reasoning, I consider that, in the circumstances of this case, there was no contract: let alone one of employment. Nor, in these circumstances, was Reverend Sharpe constituted a worker for the purposes of section 43K of the 1996 Act, as amended.

Thus I conclude that the Employment Tribunal judge reached the correct conclusion, given the facts of this case. I too would allow the appeal.

In my judgment this case is not just about a man and his job. It also raises questions about the interface between two parallel systems of justice (ecclesiastical and secular) and about the exercise of a property right to present an incumbent to a benefice (an advowson).

The right to appoint someone to an ecclesiastical office may seem to be a dry subject; but it was a hot topic throughout Europe in the Middle Ages. The 11^th century contest between the Popes and the Holy Roman Emperors, known as the Investiture Contest, was about who had the right to appoint bishops and abbots of great monasteries. Pope Gregory VII’s humiliation of Henry IV in the snow at Canossa in 1077 was a direct result of this controversy. A similar contest was brewing in England in the reign of Henry I. But it was not until the famous quarrel between Henry II and Thomas Beckett that it exploded. Henry II had been concerned about the Church’s claim to exercise jurisdiction over all clerics in both civil and criminal matters. The Church was asserting greater and greater jurisdiction. Henry appointed Beckett to the Archbishopric of Canterbury in the hope that he would curb that jurisdiction. But his plan backfired when the new Archbishop stoutly defended the Church’s privileges. In the Constitutions of Clarendon in 1164 Henry tried to reassert the jurisdiction of the royal courts over criminous clerks. However, he was also concerned with the Church’s assertion over temporal property associated with the Church. Thus clause 1 of the Constitutions of Clarendon reads (in translation):

“If a controversy concerning advowson and presentation of churches arise between laymen, or between laymen and clerks, or between clerks, it shall be treated of and terminated in the court of the lord king.”

The Reformation severed links between the Church in England and the papacy. The Church (now the Church of England) had the sovereign at its head as Supreme Governor. But the jurisdiction of the ecclesiastical courts remained in parallel to the secular courts. They continued until the nineteenth century to exercise jurisdiction over matrimonial causes and probate.

Measures passed by the General Synod and approved by Parliament are part of the law of the land. Canons Ecclesiastical are another form of primary legislation whose application is specific to the Church of England and which may be made and promulgated by the General Synod only with the Royal Assent and Licence. Ecclesiastical courts continue in existence to this day, their jurisdiction being defined by the Ecclesiastical Jurisdiction Measure 1963.

An advowson is a property right consisting of the right to appoint someone to a benefice. Its origins lie in feudal times, as both Coke on Littleton (120a) and Sir William Blackstone (Commentaries on the Laws of England vol 2 pp 22-3) explain. The lord of a manor would normally wish his manor to be an independent parish. To that end he would build a church on his demesne land and endow it with land, called the glebe, and tithes. The produce of the glebe would both maintain the incumbent and also pay for the repair of the chancel. Liability to repair the chancel was a burden on the land, which bound future owners, as Mr and Mrs Wallbank found to their cost: Parochial Church Council of the Parish of Aston Cantlow v Wallbank [2003] UKHL 37, [2004] AC 546. This bundle of rights and obligations was known as a “rectory” and the incumbent as the “rector”. The rector would sometimes appoint a deputy, called a “vicar,” to carry out the actual business of conducting services and ministering to the parish. This would often be the case if the advowson was held by a monastic foundation or an Oxford or Cambridge College. The rector’s rights were essentially themselves proprietary and were known as freeholds. Following the dissolution of the monasteries many advowsons passed from the hands of the monasteries into the hands of laymen. If the rectory had passed to a lay person the appointment of a vicar to perform the spiritual duties of the office was essential. The right of the holder of the advowson, who was also known as the “impropriator” or “patron”, is classified in land law as an incorporeal hereditament. As Blackstone explains in his Commentaries on the Laws of England vol 2 p 22 advowsons were of three kinds: presentative, collative and donative.

“An advowson preventative is where the patron hath a right of presentation to the bishop or ordinary, and moreover to demand of him to institute his clerk, if he find him canonically qualified: and this is the most usual advowson.”

Willes J put it thus in Bishop of Exeter v Marshall (1868) LR 3 HL 17, 39:

“[A] patron is entitled effectually to present any fit person, that is to say, a person of the canonical age, in orders (or, at least, who can obtain ordination before admittance), of sufficient learning, and against whose orthodoxy and morals no charge can be established.”

He contrasted the position of a rector with that of a curate:

“It is now obvious to my mind—though I have thought over it till I doubted, and again till I returned to a clear conviction—that the veto of another bishop can, in reason and in law, only avail to the same extent and under the same circumstances as that of the bishop who is to admit; and therefore can be absolute only when the bishop has an absolute discretion, as in the case of stipendiary curates, and others having no benefice. To hold otherwise would be to abolish the remedy of the clerk and that of the patron in every case where the former comes from a foreign diocese.”

Donative advowsons were abolished by the Queen Anne’s Bounty Act 1714, and collative advowsons by the Benefices Act 1898. A presentative advowson is thus the only type of advowson still in existence. Because an advowson was a property right at common law it could be inherited or bought and sold. Although in their origins advowsons were generally attached to manors (“appendant”), once detached from the manor they became advowsons in gross. By virtue of section 32 of the Patronage (Benefices) Measure 1986 all advowsons today are advowsons in gross. Section 3 of the same Measure prohibited the sale of advowsons. An advowson may, however, still be transferred otherwise than by sale.

As required by the Constitutions of Clarendon disputes about advowsons were decided by the secular courts; and by means of writs of prohibition the secular courts prevented the ecclesiastical courts from dealing with such disputes. The method of procedure was by the writ of quaere impedit. That was a writ which asked the secular court to order the bishop to admit the impropriator’s nominee, or to show cause why not.

In Bishop of Exeter v Marshall Willes J described the procedure:

“The remedy of the patron is by action at common law. To try what? Of course to try, first, whether the patron had the right to present; and, secondly, if so, whether he has presented a fit person. The former is not questioned. Who is to decide the latter? The answer is easy—the Court of common law. Therefore, a plea founded upon unfitness must, in the first instance, shew an unfitness which the Court can recognise as a disqualification, and not mere inconclusive evidence of unfitness. If the plea sufficiently shews unfitness, then its truth is to be tried either by a jury, if the cause be a crime, or by the certificate of the metropolitan if it be insufficiency: for which purpose the Court of common law, according as the case may be, either summons a jury or sends a writ to the metropolitan, commanding him in the Queen's name to try the question, and to certify the result to the Court. And that inquiry must take place according to legal rules of evidence; for, even in cases within the jurisdiction of the Ecclesiastical Courts, the Courts of common law restrain those Courts by prohibition when they require evidence inconsistent with the common law, as, for instance, two witnesses to a payment.”

The common law was changed by the Benefices Act 1898 which codified at least in part the grounds on which a bishop could refuse to install a patron’s nominee; and substituted a system of appeals to the archbishop and the Dean of Arches and Auditor for the old writ of quaere impedit. A further ground for refusal on the ground of inexperience was added by the Benefices Measure 1972. The right of appeal under the Benefices Act 1898 is given both to the patron and also to the presentee: section 3 (1). Proceedings are in public and legal representation is permitted.

The rules about advowsons are now mostly to be found in the Patronage (Benefices) Measure 1986. However, that Measure did not change the essentially proprietary nature of the right. Nor did it remove the right of appeal under the Benefices Act 1898. The most salient features of that Measure, for present purposes are:

We can see from this short summary that the bishop does not select the incumbent; and that the PCC as well as the bishop must approve the candidate. If either refuses then the patron is entitled to appeal first to the archbishop and then to the ecclesiastical court. The presentee has rights of appeal as well. This seems to me to be far removed from an ordinary job application. The diocesan board of finance plays no part in the process at all.

A benefice in the Church of England is regarded as a freehold office belonging to the incumbent for the time being: Percy v Church of Scotland [2005] UKHL 73, [2006] 2 AC 28 at [19]. At common law the rector was entitled to the freehold of the glebe and of the church itself, although ownership of the glebe has now been transferred to the diocesan boards of finance. The same was true where the rector was a lay person and appointed a vicar to carry out spiritual duties. In either case the incumbent had an obligation to keep the rectory or vicarage in repair: Mason v Lambert (1848) 12 QB 795. This too has been modified by the Repair of Benefice Buildings Measure 1972. If the rector was a lay person then he had no right to possession of the church as against the vicar: Griffin v Dighton (1864) 5 B & S 93. In that case Coburn CJ said:

“It is no doubt true that in contemplation of law the freehold of the church, and therefore that of the chancel, which forms part of the church, as well as the freehold of the churchyard, is in the rector, whether spiritual or lay; but this naked and abstract right carries with it, in our judgment, no right of possession, the latter being in the incumbent, who is responsible to the Ordinary for the celebration of public worship.

Where there is a spiritual rector he has, when inducted, the corporal possession of the church for the use of the parishioners, subject to the control of the Ordinary. When there is no spiritual rector, the vicar, or the perpetual curate has upon induction the like possession for the like purposes.”

The question of possession is of some significance because in the ordinary case an employee will not be in possession of the workplace in which he carries out his job.

A beneficed clergyman who has been admitted to a benefice has the right to perform divine service in consecrated buildings within his benefice without further licence of the bishop: Moysey v Hillcoat (1828) 2 Hag Ecc 30. This is now recognised by Canon C 8 (3) of the Canons of the Church of England. By contrast a non-beneficed clergyman such as a curate requires the licence of the bishop to officiate. The bishop does not need to give reasons for refusing a licence (Bishop of Down v Miller (1861) 11 I Ch R App 1). He may revoke the licence for misconduct only by way of disciplinary proceedings: Clergy Discipline Measure 2003 s 8 (2).

The duties of an incumbent are set out in Canon C 24:

“1.

Every priest having a cure of souls shall provide that, in the absence of reasonable hindrance, Morning and Evening Prayer daily and on appointed days the Litany shall be said in the church, or one of the churches, of which he is the minister.

2.

Every priest having a cure of souls shall, except for some reasonable cause approved by the bishop of the diocese, celebrate, or cause to be celebrated, the Holy Communion on all Sundays and other greater Feast Days and on Ash Wednesday, and shall diligently administer the sacraments and other rites of the Church.

3.

Every priest having a cure of souls shall, except for some reasonable cause approved by the bishop of the diocese, preach, or cause to be preached, a sermon in the church or churches of which he is the minister at least once each Sunday.

4.

He shall instruct the parishioners of the benefice, or cause them to be instructed, in the Christian faith; and shall use such opportunities of teaching or visiting in the schools within his cure as are open to him.

5.

He shall carefully prepare, or cause to be prepared, all such as desire to be confirmed and, if satisfied of their fitness, shall present them to the bishop for confirmation.

6.

He shall be diligent in visiting the parishioners of the benefice, particularly those who are sick and infirm; and he shall provide opportunities whereby any of such parishioners may resort unto him for spiritual counsel and advice.

7.

He and the parochial church council shall consult together on matters of general concern and importance to the parish.

8.

If at any time he shall be unable to discharge his duties whether from non-residence or some other cause, he shall provide for his cure to be supplied by a priest licensed or otherwise approved by the bishop of the diocese.”

As the Employment Tribunal noted, these duties do not require personal performance by the beneficed cleric. He complies with his duties by causing the celebration of Holy Communion, causing a sermon to be preached on Sundays, causing the instruction of parishioners, and causing the preparation of those who desire to be confirmed. On the face of it, however, he does have a personal obligation to visit the sick. But there is, in addition, a general power of delegation in Canon C 24 (8). Canon C 25 (1) imposes on a beneficed priest (but not a non-beneficed priest such as a curate) an obligation of residence in his benefice, although the bishop may grant licence of absence. If he fails to comply with this obligation there is a procedure for enforcement under section 54 of the Pluralities Act 1838 by monition. The sanction for failure to comply with an order of monition is sequestration of the benefice, not dismissal of the incumbent.

A priest also owes canonical obedience to the bishop. This applies not only while he holds an office but continues after he ceases to hold office: Canon C 1 (4) of the Canons of the Church of England. In turn Canon C 18 (7) says:

“Every bishop shall correct and punish all such as be unquiet, disobedient, or criminous, within his diocese, according to such authority as he has by God's Word and is committed to him by the laws and ordinances of this realm.”

The bishop’s authority over an incumbent thus derives from the law of the land and not from some private agreement between him and the incumbent.

A clergyman is subject to a number of restrictions on what he may do. These are contained in the Pluralities Act 1838. He may not farm more than 80 acres of land without permission from the bishop. He may not engage in trade (with certain exceptions); and if he contravenes this provision he may be brought before the bishop’s court and suspended or, for a third offence, deprived of his living. The bishop has a statutory power to grant licence for trading activities after consultation with the PCC, and in case of refusal there is a right of appeal to the archbishop: Clergy (Ordination and Miscellaneous Provisions) Measure 1964 s 11. These restrictions and powers are contained in primary legislation; and not in the terms of any contract.

Historically the incumbent’s income came from the glebe. Some benefices were richly endowed and gave their patrons considerable powers of patronage and advancement. In Pride and Prejudice Mr Collins fawns on Lady Catherine de Burgh because she had the gift of the living. This was changed by section 15 of the Endowments and Glebe Measure 1972 which vested remaining glebe in the diocesan board of finance. Section 19 of that Measure provided that glebe land was to be held, managed and dealt with by the Diocesan Board of Finance for the benefit of the diocesan stipends fund of the diocese. It is from this fund that stipends are paid. The diocesan board has a statutory obligation under section 5 (1) of the Diocesan Stipends Fund Measure 1953 which provides:

“Subject to any charges imposed on the income of the diocesan stipends fund of a diocese by any enactment or any scheme or order made thereunder, moneys standing to the credit of the income account of that fund shall be applied—

(a)

in providing or augmenting the stipends or other emoluments of incumbents, assistant curates licensed under seal and other persons who are declared by the bishop to be engaged in the cure of souls within the diocese…”

Section 5 (2) gives the bishop power to give directions (with the concurrence of the diocesan board of finance) about the application of the funds; but section 5 (3) says that any directions must be consistent with any directions given by the Commissioners, in the exercise of their functions as the Central Stipends Authority, about forms and levels of pay.

It is unnecessary to reach a conclusion about what the remedy might be if there is a breach of the statutory obligation imposed by section 5 (1). It may lie in trust law (compare Davies v Presbyterian Church of Wales [1986] 1 WLR 323, 329-30, Preston v President of the Methodist Conference [2013] UKSC 29, [2013] 2 AC 163 at [28]); it may lie in judicial review to obtain a mandatory order or it may conceivably lie in tort for breach of statutory obligation. It may lie in contract as Arden LJ suggests at [83]. But what is clear is that it does not lie in contract against the bishop. Although there is a legal obligation to administer the diocesan fund in this way, it is not a contractual one.

A bishop has no power to dismiss a beneficed clergyman. Canon C1 (2) states:

“No person who has been admitted to the order of bishop, priest, or deacon can ever be divested of the character of his order, but a minister may either by legal process voluntarily relinquish the exercise of his orders and use himself as a layman, or may by legal and canonical process be deprived of the exercise of his orders or deposed therefrom.”

Apart from the case of a pastoral scheme (which as the Employment Tribunal said is akin to redundancy) a benefice is avoided by death, the attainment of the age of 70, resignation, exchange, cession, declaration of avoidance by the bishop and deprivation. Death and resignation speak for themselves. There is now a compulsory retirement age of 70, which supersedes the old freehold tenure of a benefice. Cession takes place if the incumbent is created a diocesan bishop or takes another benefice which he cannot lawfully hold with his original benefice. A benefice becomes vacant by the deprivation of the incumbent: (1) where there has been simony in connection with his presentation, institution, collation or admission to the benefice, whether he was party to it or not; (2) where the incumbent is otherwise by law disqualified from holding it; or (3) where he has been guilty of some offence or conduct owing to which he is deprived of it by law or by a definite sentence: Halsbury’s Laws of England vol 34 para 723.

There are limited powers contained in the Incumbents (Vacation of Benefices) Measure 1977. These arise in the case of a breakdown in relations between the incumbent and his parishioners and in cases of incapacity. In either case a tribunal, chaired by the Chancellor of the diocese, investigates the matter and makes a report and recommendation to the bishop. Section 4 of the Measure enables the cleric to resign his benefice, but does not compel him to do so; and empowers the bishop to accept his resignation “if he thinks it would be in the interests of the Church to do so”. In the case of disability found by the inquiry the bishop may give notice to the incumbent inhibiting him from performing any right or duty incidental to his office: section 9A. The bishop’s powers in a case of serious breakdown of pastoral relationship are contained in section 10 of the Measure. If (but only if) the tribunal so recommend, the bishop may execute a deed of avoidance declaring the benefice vacant. The bishop’s powers in a case of disability are contained in section 11 of the Measure. If (but only if) the tribunal recommended that it was desirable that the incumbent should resign his office, the bishop may give him notice to that effect. That triggers an obligation on the part of the incumbent to execute a deed of resignation within three months. If he fails to comply then the bishop may declare the benefice vacant. In all these cases it can be seen that the bishop does not act on his own initiative, but on the recommendation of a tribunal.

That brings us on to the discipline of the clergy. This is effected under the Clergy Discipline Measure 2003. The grounds on which disciplinary proceedings may be taken are specified in section 8 (1):

“(a)

doing any act in contravention of the laws ecclesiastical;

(b)

failing to do any act required by the laws ecclesiastical;

(c)

neglect or inefficiency in the performance of the duties of his office;

(d)

conduct unbecoming or inappropriate to the office and work of a clerk in Holy Orders.”

In the case of a priest section 10 provides that proceedings may be instituted by the PCC, a churchwarden of the parish or “any other person who has a proper interest”. The latter phrase appears not to include the bishop himself, because the first stage once a complaint has been made (after the diocesan registrar has reported on it to the bishop) is for the bishop himself to consider it. Under section 12 the courses of action open to the bishop are (a) to take no further action (b) to direct that the matter remains on the record conditionally (c) to direct an attempt at conciliation (d) to impose a penalty, but only by consent or (e) to direct a formal investigation.

If the bishop directs a formal investigation the matter is passed to a designated officer to investigate. But the decision whether or not there is a case to answer is not made either by the designated officer or by the bishop, but by the president of tribunals: section 17 (2). If the president considers that there is a case to answer he refers the complaint to a disciplinary tribunal or to the Vicar-General’s court. The court to which the complaint is referred must decide it in accordance with the civil standard of proof: section 18 (3) (a). It is the tribunal, and not the bishop, that decides what penalty if any to impose on the respondent: section 19. The respondent has the right of appeal to the Arches Court of Canterbury or to the Chancery Court of York: section 20. Among the penalties that may be imposed are (i) prohibition for life or for a specific time and (ii) removal from any preferment that the respondent holds. It is only these two types of penalty that resemble dismissal. There are also penalties that are triggered by certain convictions in the secular courts, or certain findings in secular matrimonial proceedings.

The essential point is that disciplinary proceedings are neither initiated by the bishop nor decided by him. Nor does the diocesan board of finance have any part to play. The bishop has the powers (and only the powers) conferred on him by legislation.

With this legal framework in mind I can turn to the case-law on employment status. I begin with Diocese of Southwark v Coker [1998] ICR 140. This concerned an assistant curate in the Church of England. As noted, an assistant curate is a non-beneficed clergyman whose authority derives from the bishop’s licence rather than from his admission to a benefice. Dr Coker’s claim to have been an employee failed. Mummery LJ gave the leading judgment. It is necessary to quote from it quite extensively, because I consider that it has been misunderstood in later cases. Mummery LJ began his discussion by saying that earlier cases could be seen as cases in which there was no intention to create a contractual relationship. It is important to note that he was not saying that there was no intention to create a legal relationship or to enter into legal relations. What he was saying was that the source of the obligations was non-contractual. He continued:

“In some cases, however, there is no contract, unless it is positively established by the person contending for a contract that there was an intention to create a binding contractual relationship. This is such a case. Special features of the appointment and the removal of a Church of England priest as an assistant curate and the source and scope of his duties preclude the creation of a contract, unless a clear intention to the contrary is expressed.

The critical point in this case is that an assistant curate is an ordained priest. The legal effect of the ordination of a person admitted to the order of priesthood is that he is called to an office, recognised by law and charged with functions designated by law in the ordinal, as set out in the Book of Common Prayer. The ordinal governs the form and manner for ordaining priests according to the order of the Church of England. Those functions are also contained in the canons of the Church of England and are discharged by a priest as assistant curate. It is unnecessary for him to enter into a contract for the creation, definition, execution or enforcement of those functions. Those functions embrace spiritual, liturgical and doctrinal matters, as well as matters of ritual and ceremony, which make what might otherwise be regarded as an employment relationship in the secular and civil courts and tribunals more appropriate for the special jurisdiction of ecclesiastical courts.

The legal implications of the appointment of an assistant curate must be considered in the context of that historic and special pre-existing legal framework of a church, of an ecclesiastical hierarchy established by law, of spiritual duties defined by public law rather than by private contract, and of ecclesiastical courts with jurisdiction over the discipline of clergy. In that context, the law requires clear evidence of an intention to create a contractual relationship in addition to the pre-existing legal framework. That intention is not present, either generally on the appointment of an assistant curate, or in the particular case of Dr. Coker. I would add that it has never been held, and it is not suggested by Mr. Hage in this case, that the incumbent of the parish, holding its church and its benefice, is under a contract with the bishop or with anyone else in respect of his cure of souls in the parish.

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.”

He concluded:

“The Church Commissioners paid Dr. Coker's stipend and the Diocesan Board of Finance made the necessary arrangements for that payment. Neither of them appointed him, removed him, controlled the performance of his functions, or had any contract with him. It was not contended that either of the vicars had a contract with Dr. Coker. That leaves only the bishop, chief pastor of the diocese, who has legal responsibility for licensing the appointment of assistant curates, on the nomination of the incumbent, and the termination of such appointment, or revocation of it. But that relationship, cemented by the oath of canonical obedience, is governed by the law of the established church, which is part of the public law of England, and not by a negotiated, contractual arrangement. Vis-a-vis the bishop, Dr. Coker had a legal status stemming from his priestly office, but he had no private law contract transforming him into an “employee” for the purposes of the Act of 1978.”

In the first of the quoted passages Mummery LJ was saying not simply that Dr Coker was appointed to an office; nor simply that his duties were spiritual. He was saying that both the content of the duties and their execution and enforcement were created by public rather than private law. He returned to that point in the second of the quoted passages, stressing that the relationship between Dr Coker and the bishop was governed by public rather than private law. Moreover, he expressly distinguished between Dr Coker’s position, as a licensed priest, and that of an incumbent. The latter was plainly less like an employee than the former.

The next case that needs to be considered is Percy v Board of National Mission of the Church of Scotland [2005] UKHL 73, [2005] 2 AC 28. Miss Percy was appointed as an associate minister in a Church of Scotland parish for a period of five years. The question was not whether she was an employee within the meaning of the Employment Rights Act 1996: she conceded that she was not: see Lord Nicholls at [13] and Lord Hope at [101]. Her claim was made under the Sex Discrimination Act 1975 which contains a broader definition. Their Lordships referred to Coker in several places. They regarded Mummery LJ as having said that there had been an absence of intention to create legal relations: see Lord Nicholls at [23], Lord Hoffmann at [62], Lady Hale at [148]. With great respect to their Lordships, I do not think that this is what Mummery LJ said. In my judgment he made the very point that Lord Hoffmann made in his dissenting speech at [62]:

“There was plainly an intention to create legal relations. But those legal relations were not a contract of employment. They were an appointment to a well-recognised office, imposing legal duties and conferring legal rights.”

And again at [63]:

“So the question is not whether the appointment was intended to create legal relations but rather what legal relations it was intended to create.”

The means by which Miss Percy was appointed were also of considerable significance, as Lord Hope explained at [84]:

“It is important then, in the context of this case, to appreciate that the method of appointing a person who has been licensed to a charge as an associate minister differs from that which applies in the case of the settlement in a parochial charge of a minister. The right to elect and call a minister belongs to the congregation whenever there is a vacancy which the presbytery decides should be filled. If it is not exercised within six months the right to call the minister to the charge passes to the presbytery. The Parish Reappraisal Committee has to agree that the vacancy should be filled, but it plays no part in that selection process. The role that it plays in the selection and appointment of associate ministers is quite different. These matters are handled centrally by the committee through the offices of the Board of National Mission in Edinburgh.”

In our case we are concerned with what I think in the Church of Scotland would be “the settlement in a parochial charge of a minister”. In Percy Lord Hope had no difficulty in analysing the facts as amounting to an offer and acceptance between Miss Percy and the National Mission: see [112]. But unlike the position in Percy in our case there was no offer and acceptance between Rev Sharpe and the bishop. Such offer and acceptance as there was was an exchange of correspondence between the lay impropriator, Mrs Miles, and Rev Sharpe. But it is not suggested that there is any contract between them.

Lord Nicholls explained at [34] that:

“The fact that Ms Percy's status as an associate minister might readily be described as an ecclesiastical office leads nowhere. The post to which she was appointed had no content other than that given by the terms and conditions agreed ad hoc between the parties. Her rights and duties were defined by her contract, not by the “office” to which she was appointed.”

This is a further distinction from the facts of our case. The duties undertaken by Rev Sharpe were those laid down in the Ecclesiastical Canons. The means by which he may be required to vacate his benefice are likewise laid down by ecclesiastical law. The office to which Rev Sharpe was appointed has a well-defined content whose origin is not contractual but to all intents and purposes statutory.

It is, however, clear from Percy that there is no presumption of a lack of intention to create legal relations in cases involving ministers of religion. But I do not accept Mr Bowers’ submission that there is a presumption of an intention to enter into contractual relations, which must be displaced before a finding of no contract can be sustained.

The final case I need to consider is Preston v President of the Methodist Conference. Lord Sumption JSC gave the leading majority judgment. He said at [3] that there were two recurrent themes in the case law of which the first was:

“… the distinction between an office and an employment. Broadly speaking, the difference is that an office is a position of a public nature, filled by successive incumbents, whose duties were defined not by agreement but by law or by the rules of the institution. A beneficed clergyman of the Church of England is, or was until recent measures modified the position, the paradigm case of a religious office-holder.”

This, in my judgment, approves the conclusion that Mummery LJ reached in Coker, even if Lord Sumption did not agree with every step in his reasoning: see [10]. Like Mummery LJ he regarded the office of a beneficed clergyman of the Church of England as holding an office “whose duties were defined not by agreement but by law or by the rules of the institution”. The “recent measures” to which he referred were the codification by legislation of the duties of priests, and the conferring on them of some employment rights: Ecclesiastical Offices (Terms of Service) Measure 2009 and Ecclesiastical Offices (Terms of Service) Regulations 2009. They are not relied on in our case. Lord Sumption also said at [10]:

“The primary considerations are the manner in which the minister was engaged, and the character of the rules or terms governing his or her service. But, as with all exercises in contractual construction, these documents and any other admissible evidence on the parties' intentions fall to be construed against their factual background. Part of that background is the fundamentally spiritual purpose of the functions of a minister of religion.”

Finally at [12] Lord Sumption rejected the argument that a contract should only be implied in cases of necessity. He gave three reasons for that, the third of which was:

“… whatever the legal classification of a Methodist minister's relationship with his Church, it is not sensible to regard it as implied. It is documented in great detail in the Deed of Union and the standing orders. The question is whether the incidents of the relationship described in those documents, properly analysed, are characteristic of a contract and, if so, whether it is a contract of employment. Necessity does not come into it.”

This, in my judgment, is exactly the approach that Mummery LJ took in Coker.

The manner in which Rev Sharpe was engaged was by the exercise of a proprietary right by the lay impropriator. He was not chosen either by the bishop or the diocesan board of finance. The bishop (as well as the PCC) had the right to withhold approval for cause, but if they had done so the patron and the presentee had the right of appeal. In conducting the ceremonial aspects of Rev Sharpe’s installation, the bishop was doing no more than giving effect to Mrs Miles’ exercise of her proprietary right, having no grounds on which to refuse to do so. The deed of installation is couched in the language of grant; not the language of contract. That method of appointment militates strongly against any contract between Rev Sharpe and the bishop.

The duties imposed on Rev Sharpe derive principally from the Ecclesiastical Canons and Measures, and not from any private agreement between him and the bishop. His entitlement to stipend derives from statute and not any agreement between him and the bishop.

The bishop has no power to dismiss Rev Sharpe; and is not even the initiator of disciplinary proceedings, which as I understand it is the sole method by which Rev Sharpe could have been deprived of his benefice against his will. His powers to declare a benefice vacant in cases of serious pastoral breakdown or incapacity are entirely dependent on the findings of an independent tribunal.

In my judgment there are no features of the method of Rev Sharpe’s appointment, the duties imposed upon him by law or the means by which he could be deprived of his benefice which would support the existence of a contract between him and either the bishop or the diocesan board of finance. The existence of the Bishop’s papers makes no difference. The introduction to the Bishop’s papers makes it clear what their purpose is.

“This Handbook … is intended to be helpful and to provide material to assist clergy and parish officials to understand the procedures in the diocese.”

In other words it is a helpful procedural guide, not a record of contractual terms. It is issued not just to the clergy but to parish officials as well. It is a hotch-potch of spiritual, pastoral and secular advice. The parts of the Bishop’s papers on which Mr Bowers relied do not have the flavour of contractual terms incorporated into a contract between the incumbent and the bishop. Thus in relation to holiday entitlement it is said that “the following guidelines indicate what the level of provision should be”. In dealing with stipend the papers point out that the Church Commissioners are the central stipends authority; and that the diocesan board of finance pays the stipend. It ends by saying that “The paying office is the Church Commissioners to whom all matters regarding pay and tax should be addressed.”

There is one additional feature which, in my judgment, stands in the way of the claim that Rev Sharpe has been unfairly dismissed. The ecclesiastical courts remain as part of the justice system within the areas of their jurisdiction. Their jurisdiction includes the discipline of the clergy; and that in turn extends to imposing penalties, including the penalty of prohibition or removal from a preferment. These, in ecclesiastical terms, are the equivalent of dismissal. I find it difficult to attribute to Parliament an intention that a decision of a properly constituted ecclesiastical disciplinary tribunal or court which found that a clergyman merited either of these penalties could be called into question in an employment tribunal. To allow that would be to permit a collateral attack on a tribunal of competent jurisdiction from which there are already extensive rights of appeal.

My conclusions are derived from an analysis of the law. They are not reliant on Prof McClean, but I agree with Arden LJ that the employment judge treated his evidence correctly. I also agree with her that Rev Sharpe was neither a party to a contract of employment, nor a worker. I too would allow the appeal.