Church bells

Section 230 of the Employment Rights Act 1996 (ERA) defines an employee as someone who has entered into or works under a contract of service or apprenticeship. In President of the Methodist Conference v Preston, the Supreme Court held that although ministers can be employees in order to claim unfair dismissal, Ms Preston’s duties arose entirely from her status under the constitution of the Church, not from a contract.

Basic facts

After a stint as a probationary minister in the Taunton Circuit, Ms Preston was admitted into “full connexion” by the Church’s annual conference in 2003. She was then ordained and stationed as a full minister in the same circuit.

“Stationing” is the formal act by which a minister is assigned particular duties, and the stationing is reviewed under a process at the annual conference, which includes standing orders. One specific standing order provides that ministers are “ordained to a life-long presbyteral ministry of word, sacrament and pastoral responsibility in the Church of God which they fulfil in various capacities and to a varying extent throughout their lives.”

On 19 November 2005, the Redruth Circuit invited Ms Preston to become the Superintendent Minister, which she accepted on 22 November 2005. The position was expressly offered on the basis of commencing in September 2006 for a period of five years.

Methodist ministers have no written contract of employment, as their relationship with the Church is governed by its constitution, which is contained in the Deed of Union by the standing orders of the Methodist Conference which takes place annually. Ms Preston received a stipend, a manse (a home and base for her ministry) and membership of a pension scheme. The Church did not see these as “consideration” for the services of its ministers, but rather as a way of providing them with the support they needed “to serve God”.

In 2009, Ms Preston brought a claim for unfair dismissal. The question for the tribunal was whether she was an employee, as defined by section 230 of the ERA.

Decisions of lower courts

Although the tribunal dismissed her claim, the Employment Appeal Tribunal reversed that decision, holding that it was bound by the 2006 decision of the Supreme Court in Percy v Board of National Mission of the Church of Scotland.

The EAT held that, as a Methodist minister, Ms Preston served under arrangements which, in the words of Lord Nicholls in Percy, “on their face are to be expected to give rise to legally binding obligations.” The Court of Appeal agreed with the EAT.

Supreme Court decision

A majority of the Supreme Court said that the EAT and Court of Appeal had over-analysed the decision in Percy.

The correct approach was to examine the rules and practices of the particular church and any special arrangements with the particular minister in each case. The mere fact that the arrangement for Ms Preston included a stipend, accommodation and recognised duties to be performed by the minister did not completely resolve the issue. The lower courts had to ask whether the parties intended these “benefits and burdens of the ministry” to create a legally binding agreement between them.

In this case, the majority of the Supreme Court held that the lower courts had paid insufficient attention to the Deed of Union and the standing orders which were the foundation of Ms Preston’s relationship with the Church. As such, the appeal was allowed and the decision of the original employment tribunal (that Ms Preston was not an employee) was restored.