Ministers of Religion are Employees

The House of Lords, in a judgment handed down this morning, has overturned decades of practice/authority by holding that ministers of religion are employees (at least for the purpose of the Sex Discrimination Act 1975).

Ms Percy was an ordained Minister of the Church of Scotland. She claimed sex discrimination. The employment tribunal, EAT and Court of Session all held she was not an employee within the meaning of the Sex Discrimination Act 1975.

It is important to note that Ms Percy did not appeal the employment tribunal's finding that she was not an employee for the purpose of claiming unfair dismissal. She said that she fell within the wider definition in the Sex Discrimination Act 1975, i.e. that she was engaged "under a contract to personally execute any work or labour".

The House of Lords upheld her appeal by a 4:1 majority.

The majority (Lords Nicholls, Hope, Scott and Baroness Hale) held:

• the fact that somebody is an office-holder does not mean they cannot simultaneously be working under a contract;
• the difficulty of establishing the identity of the 'employer', given the fragmented nature of many religious institutions, should not of itself defeat a claim;
• the offer and acceptance of a church post, with provisions for the appointee's duties and remuneration, holidays, accommodation etc. will give rise to an intention to enter legal relations;
• * it is quite apparent, given the degree of control and the requirement for Ms Percy to undertake duties in a personal capacity, that there was a contract to personally undertake work or labour.

Dissenting, Lord Hoffman held that the long-established position is correct, and that a Minister of Religion has legal obligations pursuant to being an office-holder, but not under any contract of employment (whether under the narrow definition for unfair dismissal rights, or the wider definition for discrimination rights).

Although the case only dealt with the definition of employee for the purpose of the SDA 1975, this decision does open the door for Ministers to argue that they are employees within the meaning of the unfair dismissal legislation as well (both Lord Nicholls and Baroness Hale suggested that the cases stating that Ministers cannot claim unfair dismissal may need to be revisited).

Percy v Church of Scotland (.pdf version)