Methodist Conference v Preston [2013] UKSC 29

A Methodist minister claimed unfair dismissal. By a 4–1 majority, the Supreme Court held she was not an employee. Her rights and duties arose from her status under the Church's constitution, not from a contract. The Employment Tribunal's dismissal of her claim was restored.

Facts

Ms Haley Anne Preston (formerly Moore) was a Methodist minister. She was stationed as a probationer in the Taunton Circuit in 2001 and was admitted to full connexion and ordained by the 2003 Conference. In November 2005 the Redruth Circuit Invitation Committee invited her to become Superintendent Minister from September 2006 for five years. The Circuit Steward confirmed the invitation by letter and she accepted it by reply. She served at Redruth until 2009 and then sought to bring an unfair dismissal claim. Under section 94 of the Employment Rights Act 1996, only an employee, defined by section 230 as a person working under a contract of service or apprenticeship, may bring such a claim.

The Employment Tribunal held that she was not an employee. The Employment Appeal Tribunal ([2011] ICR 819) reversed that decision, and the Court of Appeal ([2012] QB 735) upheld the reversal. The President of the Methodist Conference appealed.

Issues

The single issue was whether Ms Preston was an employee, that is, whether her relationship with the Methodist Church was a legally binding contract and, if so, a contract of employment.

The Authorities

Lord Sumption identified two recurring themes in the earlier case law. The first was the distinction between an office and an employment, seen in Diocese of Southwark v Coker [1998] ICR 140, where a presumption that ministers were office-holders was recognised. The second was the view that the spiritual nature of ministry made legal relations inappropriate, seen in Rogers v Booth [1937] 2 All ER 751 and Davies v Presbyterian Church of Wales [1986] 1 WLR 323.

In President of the Methodist Conference v Parfitt [1984] QB 368, a Methodist minister had been held not to be an employee. In Percy v Board of National Mission of the Church of Scotland [2006] 2 AC 28, the House of Lords held that classification as an office was only one factor. It also held that there was no general presumption against contractual intention in the case of ministers of religion. Lord Nicholls nonetheless appeared to endorse Parfitt.

Arguments

For the Church, Ms Rose QC argued that, in the absence of an express contract, one could be implied only if necessary. If the arrangements could be explained without an employment relationship, none should be found.

For Ms Preston, Mr Bowers QC relied mainly on the particular circumstances of her Redruth appointment. He argued that the exchange of letters was a special arrangement analogous to the one held contractual in Percy. Ms Preston also urged the court to recognise the modern approach indicated by Lord Nicholls in Percy.

Judgment

Majority: Lord Sumption (with Lord Wilson and Lord Carnwath)

Lord Sumption explained that, after Percy, the question can no longer be answered by classifying the occupation as an office or an employment, or as spiritual or secular, nor by any general presumption. He said:

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.

These materials must be construed against their factual background, which includes the fundamentally spiritual purpose of a minister’s functions.

He rejected the Church’s necessity test for three reasons:

• it should not readily be assumed that people engaged to work for remuneration intend to forgo statutory protection;
• the test would in effect reintroduce the presumption rejected in Percy;
• the relationship is documented in detail in the Deed of Union and standing orders, so it is not implied at all. In his words, necessity does not come into it.

Turning to the Deed of Union and standing orders, he accepted that if they formed a contract, it would inevitably be a contract of employment. However, three points were cumulatively decisive against any contract existing:

1. Neither admission to full connexion nor ordination is a contract, and a minister’s duties thereafter depend on unilateral decisions of the Conference.
2. The stipend and manse are due by virtue of admission and ordination alone and continue during sickness. The disciplinary scheme is the same for ministers and lay members.
3. The relationship is terminable only by the Conference or its committees, and there is no unilateral right to resign, even on notice.

He concluded:

I conclude that the ministry described in these instruments is a vocation, by which candidates submit themselves to the discipline of the Church for life.

As to the Redruth letters, he accepted that in other contexts such an exchange might create a contract. Here, however, it was only part of a longer procedure under the standing orders. Circuits have no power to appoint; the invitation is merely a proposal, and the decision is reserved to the Conference. Ms Preston therefore served at Redruth under the life-long relationship she had entered on ordination, not under a five-year arrangement.

Lord Sumption identified three difficulties with the reasoning of the courts below:

• it would make almost any stipendiary ministry contractual;
• it was inconsistent with the function of the circuit invitation;
• it required Lord Nicholls’s endorsement of Parfitt to be disregarded.

He said:

In my view both courts below over-analysed the decision in Percy, and paid insufficient attention to the Deed of Union and the standing orders which were the foundation of Ms Preston’s relationship with the Methodist Church.

The payment of a stipend, provision of accommodation and recognised duties do not of themselves resolve whether the parties intended legal relations. Percy removed the presumption against contractual intention but did not make the spiritual character of the ministry irrelevant.

The correct approach is to examine the rules and practices of the particular church and any special arrangements made with the particular minister.

Lord Sumption also considered how a minister might enforce rights to a stipend and manse without a contract. He was inclined to agree with Lord Templeman in Davies that these rights were enforceable as part of the trusts of the Church’s property. He expressly left that question open for a future case.

Lord Hope (concurring)

Lord Hope agreed and accepted that the issue should be approached without any presumption. He distinguished Percy. There, once the matter was held to be civil rather than spiritual, the only question was whether plainly existing employment arrangements were intended to have legal effect. Here, by contrast, the question was whether there were any employment arrangements at all, and the Church’s doctrinal reasons formed an essential part of the background. He said:

What it cannot ignore is the fact that, because of the way the Church organises its own affairs, the basis for the respondent’s rights and duties is to be found in the constitutional provisions of the Church and not in any arrangement of the kind that could be said to amount to a contract.

Lady Hale (dissenting)

Lady Hale would have dismissed the appeal. She noted that the Church accepted there is nothing intrinsic to religious ministry that is inconsistent with a contract. She also observed that a person can be both an office-holder and an employee, citing Thomas v University of Bradford [1987] AC 795.

She drew a distinction between being a minister in full connexion, which is a life-long commitment, and holding a particular station. Assignment to a station involved a particular post, duties, manse and stipend for a defined period, which in any other context would be a contract of employment. She also doubted that the trusts analysis offered adequate redress, because the stipend is paid centrally and the Conference controls the minister.

The main point against a contract was that the minister must go where she is sent. On that point she said:

But I do not think that a prior commitment to go where you are sent negates a mutual contractual relationship when you are sent and agree to go to a particular place.

Everything about this arrangement looks contractual, as did everything about the relationship in the Percy case.

Implications

The decision confirms that, after Percy, there is no presumption either for or against contractual status for ministers of religion. The answer depends on examining the particular church’s rules and practices and any special arrangements with the individual minister, read against the spiritual background.

The majority’s conclusion is tied to the specific features of the Methodist Deed of Union and standing orders:

• life-long commitment on ordination;
• no unilateral right of resignation;
• stipend and manse treated as maintenance rather than consideration;
• appointments resting with the Conference rather than the circuit.

It does not hold that ministers generally cannot be employees. Lord Sumption expressly warned against abstract categorisation of ministers. The case shows that an exchange of letters which looks contractual may not create a contract where it operates within a wider constitutional framework that reserves decisions to a central body.

The decision matters to religious organisations and their clergy, and to employment practitioners advising them. Statutory protection will depend on how a church’s governing instruments are structured. Lady Hale noted, for example, that Church of England priests are now engaged on terms expressly conferring unfair dismissal rights.

The basis on which a non-contractual minister may enforce rights to a stipend or manse, possibly through trusts, was left unresolved. The strength of Lady Hale’s dissent also highlights the closeness of the question.

Verdict: Appeal allowed by a 4–1 majority (Lord Sumption, with whom Lord Wilson and Lord Carnwath agreed, and Lord Hope concurring; Lady Hale dissenting). The Supreme Court held that Ms Preston was not an employee and restored the Employment Tribunal’s order dismissing her unfair dismissal claim.

Source: Methodist Conference v Preston [2013] UKSC 29