Percy (AP) (Apellant) v. Church of Scotland Board of National Mission (Respondent) (Scotland)
I agree. Slynn J added, at page 906:
22. Another instance, also a decision of the Employment Appeal Tribunal, is Johnson v Ryan  ICR 236. There the question was whether a rent officer, appointed pursuant to statutory authority, was an employee within the meaning of the unfair dismissal legislation. The local authority contended that holding that statutory office was not consistent with a contract of employment. The Employment Appeal Tribunal rejected this submission. Morison J said, at page 243:
Intention to create legal relations
23. A further strand in the authorities, most notably in the judgment of Mummery LJ in Diocese of Southwark v Coker  ICR 140, concerns the absence of an intention to create legal relations. There are indeed many arrangements or happenings in church matters where, viewed objectively on ordinary principles, the parties cannot be taken to have intended to enter into a legally-binding contract. The matters relied upon by Mr Parfitt in President of the Methodist Conference v Parfitt  ICR 176 are a good example of this. The nature of the lifelong relationship between the Methodist Church and a minister, the fact that he could not unilaterally resign from the ministry, the nature of his stipend, and so forth, all these matters made it impossible to suppose that any legally-binding contract came into being between a newly-ordained minister and the Methodist Church when he was received into full connection. Similarly with the church's book of rules relied on by the Reverend Colin Davies in Davies v Presbyterian Church of Wales  ICR 280. Then the rebuttable presumption enunciated by the Lord President in the present case, following Mummery LJ's statements of principle in Diocese of Southwark v Coker  ICR 140, 147, may have a place. Without more, the nature of the mutual obligations, their breadth and looseness, and the circumstances in which they were undertaken, point away from a legally-binding relationship.
24. But this principle should not be carried too far. It cannot be carried into arrangements which on their face are to be expected to give rise to legally-binding obligations. The offer and acceptance of a church post for a specific period, with specific provision for the appointee's duties and remuneration and travelling expenses and holidays and accommodation, seems to me to fall firmly within this latter category.
25. Further, in this regard there seems to be no cogent reason today to draw a distinction between a post whose duties are primarily religious and a post within the church where this is not so. In President of the Methodist Conference v Parfitt  ICR 176, 183, Dillon LJ noted that a binding contract of service can be made between a minister and his church. This was echoed by Lord Templeman in your Lordships' House in Davies v Presbyterian Church of Wales  ICR 280, 289. Lord Templeman said it is possible for a man to be employed as a servant or as an independent contractor to carry out duties which are exclusively spiritual.
26. The context in which these issues normally arise today is statutory protection for employees. Given this context, in my view it is time to recognise that employment arrangements between a church and its ministers should not lightly be taken as intended to have no legal effect and, in consequence, its ministers denied this protection.
The parties to the contract
27. The final point calling for comment is the need to identify the parties to any alleged contract of service or for services. It goes without saying that before a tribunal can find that a contract of this nature was concluded it must be able to identify the employer with whom the claimant made the contract. As can be seen from the above summary of the authorities, this can be a source of real difficulty with a nationwide church whose complex affairs are conducted through a multiplicity of boards and committees. There may be one body responsible for finance, allocating precious resources between competing demands, all of which are eminently worthy. There may be another body responsible for making payments. There may be a third body charged with selecting the candidate best suited to this or that appointment, a yet further body may formally make the appointment, and have power of dismissal; and so on.
28. These different bodies are, in a broad but real sense, all part of 'the church' in question. But the 'church' may not be an entity capable of making a contract or of suing or being sued. This is so with the Church of England. It is equally so with a diocese of the Anglican church, for the reason given in Diocese of Southwark v Coker  ICR 140, 148. This is also true of the Church of Scotland. Then the fragmentation of functions within such an 'umbrella' organisation may make it difficult to pin the role of employer on any particular board or committee. But this internal fragmentation ought not to stand in the way of otherwise well-founded claims.
Ms Percy's appointment
29. I can now turn to apply these principles to the present case. The detailed chronology of Ms Percy's appointment is set out in the speech of my noble and learned friend Lord Hope of Craighead. In short, in 1993 the presbytery of Angus asked the parish reappraisal committee of the Church of Scotland to approve the appointment of an associate minister for the proposed linked charge of Airlie, Ruthven and Kingoldrum with Glenisla linked with Kilry linked with Lintrathen. The parish reappraisal committee is a committee of the Board of National Mission. Part of the remit of this committee is to deal with proposals for the staffing needs of parishes in respect of ministers. The Board of National Mission was set up by the General Assembly of the Church of Scotland. The constitution of the Board expresses its policy, together with that of its constituent committees, in broad terms: to plan and co-ordinate the church's strategy and provision for fulfilment of its mission as the national church.
30. The parish reappraisal committee approved the appointment sought by the presbytery. The committee's published information sheet, inviting applications for this new post, referred succinctly to the duties of the associate minister. It stated also, by way of 'terms and conditions', that the appointment would be for five years, the salary would be at the level of the minimum stipend, a manse would be provided and travelling expenses met. The associate minister would also serve as chaplain to HM Prison Noranside, but nothing turns on this additional responsibility.
31. Ms Percy responded to the advertisement. She was interviewed and her application was successful. The general secretary of the Board of National Mission, the Reverend Douglas Nicol, invited her to accept the appointment. He sent her a copy of the terms and conditions. These were an amplified form of the terms and conditions already mentioned. They included a term that the associate minister, like any other minister, would be responsible to the presbytery in matters affecting life, doctrine and discipline. Ms Percy wrote to Mr Nicol formally accepting the offer. The presbytery ratified the appointment. In due course she was introduced as associate minister at a service at Kilry church.
32. Subsequently, when the unhappy events leading to Ms Percy's demission occurred, she initially offered her resignation and then changed her mind and asked to withdraw her resignation. On 1 July 1997 Mr Nicol wrote in response, on behalf of the National Board of Mission, to 'your request to withdraw your letter of resignation from employment by the Department of National Mission'. He said that 'we', meaning the Board, agreed 'to reinstate your employment' from 17 June. He added that until further notice 'you are suspended on full pay'. Subsequently the suspension was confirmed by the presbytery.
33. These documents on their face seem to me to show that Ms Percy entered into a contract with the Board to provide services to the church on the agreed terms and conditions. The House has been shown and told nothing to displace this prima facie impression. Whether the contract was a contract of service or only a contract for services is not material in this case.
34. 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.
35. Likewise, the fact that, as it seems, power of dismissal rested with the presbytery and not with the Board of National Mission also leads nowhere in this case. Ms Percy's contract with the Board expressly provided for the supervisory and disciplinary role of the presbytery. That was one of the terms of the contract. This allocation of supervisory and disciplinary responsibility to the presbytery in accordance with the constitutional structure of the church does not of itself preclude the Board from being Ms Percy's employer.
36. In my view the industrial tribunal misdirected itself in this case. Having regard to dicta in some of the authorities this is not surprising. The tribunal's view was that a contract existed. The only reason given for holding this did not amount to employment as defined in the 1975 Act was the religious nature of Ms Percy's duties. Accordingly, had the tribunal directed itself correctly on this point it would have concluded that, notwithstanding the religious nature of the services Ms Percy was engaged to provide, the contract was a contract of employment within the definition in section 82(1) of the 1975 Act. I would so hold. In the circumstances it is not necessary to remit the matter to the employment tribunal for further consideration on this point.
The Church of Scotland Act 1921
37. The second issue raised by the respondent Board is that, even if Ms Percy was employed under a contract personally to execute work within section 82(1) of the 1975 Act, the jurisdiction of the employment tribunal is excluded by the Church of Scotland Act 1921.
38. This statute was concerned to declare the lawfulness of certain articles declaratory of the constitution of the Church of Scotland 'in matters spiritual' prepared by the General Assembly of the church. The title of the Act so stated. Section 1 so declared. Section 3 preserved the jurisdiction of civil courts 'in relation to any matter of a civil nature', subject to the recognition of the matters dealt with in the Declaratory Articles as matters spiritual.
39. The declaratory articles are set out in the Schedule to the Act. The relevant article is article IV:
40. The theme running through these provisions is that in matters spiritual the Church and its courts have exclusive jurisdiction. The expression 'matters spiritual' is not defined. But, on any ordinary understanding of this expression, if the church authorities enter into a contract of employment with one of its ministers, the exercise of statutory rights attached to the contract would not be regarded as a spiritual matter. A sex discrimination claim would not be regarded as a spiritual matter even though it is based on the way the church authorities are alleged to have exercised their disciplinary jurisdiction. The reason why a sex discrimination claim would not be so regarded is that the foundation of the claim is a contract which, viewed objectively, the parties intended should create a legally-binding relationship. The rights and obligations created by such a contract are, of their nature, not spiritual matters. They are matters of a civil nature as envisaged by section 3. In respect of such matters the jurisdiction of the civil courts remains untouched.
41. This is not to usurp the Church's exclusive jurisdiction in the exercise of its disciplinary powers, a jurisdiction upheld by the Outer House in Logan v Presbytery of Dumbarton 1995 SLT 1228. Rather it is to recognise, to adopt the words of the Lord President in the present case, that by entering into a contract of employment binding under the civil law the parties have deliberately left the sphere of matters spiritual in which the church courts have jurisdiction and have put themselves within the jurisdiction of the civil courts: 2001 SC 757, 769, para 24.
42. For these reasons I would allow this appeal. I would hold that Ms Percy was employed by the Board of National Mission under a contract personally to execute work within the meaning of section 82(1) of the 1975 Act, and that the employment tribunal's jurisdiction was not excluded by the 1921 Act. The proceedings should be remitted to an employment tribunal to proceed with the claim accordingly. In these circumstances it is not necessary to deal with further, wide-ranging arguments advanced on behalf of Ms Percy based on Community law.
43. In 1994 six congregations of the Church of Scotland within the presbytery of Angus agreed to unite or be linked for the purpose of worship. It was agreed that the minister of three of these parishes, which were already linked, would become minister of the new charge. But the presbytery considered that the expanded congregation would require the services of another minister. The Parish Reappraisal Committee approved the appointment of an Associate Minister on the footing that the congregation would provide a manse and £1,000 a year towards his or her salary. It was also expected that the Associate Minister would obtain an appointment as chaplain at HM Prison, Noranside.
44. The Board of National Mission, with representation from the presbytery, is responsible for interviewing and choosing ministers. It advertised the appointment in the newspapers. Applicants were sent a sheet of paper with the following information:
45. The appellant Miss Helen Percy, who had been ordained in 1991, applied for the appointment. Since 1968, women have been eligible for ordination and induction into charges on the same terms as men. On 22 April 1994 the Rev Douglas Nicol, General Secretary of the Board, wrote to Miss Percy inviting her to accept that appointment. He enclosed Terms and Conditions of Appointment. These enlarged slightly on the matters which had been sent to her as an applicant. For example:
46. On 26 April 1994 Miss Percy wrote to the Rev Nicol formally accepting the appointment. On 19 June 1994 she was duly inducted into the charge by the Presbytery at a service held in accordance with the statutes of the Church.
47. In 1997 scandal broke. It was alleged by members of the congregation that Miss Percy had been having an affair with a married Elder in the parish. On 17 June 1997 she offered to resign but withdrew her resignation a week later. The Presbytery decided that there was a case to answer and commenced the procedure for a trial by libel to determine the truth of the allegations. On 1 July 1997 the Rev Nicol wrote to her saying that until further notice she was suspended from duty on full salary. But no trial was held because on 2 December 1997 Miss Percy agreed to demit her charge and her status as a minister.
48. In February 1998 Miss Percy made a complaint to an employment tribunal against "the Church of Scotland", alleging that the Church had discriminated against her on grounds of sex, contrary to section 6 of the Sex Discrimination Act 1975. The basis for this complaint was an allegation that the Church had not taken "similar action" (presumably, initiation of a trial by libel and suspension) against male ministers who had extra-marital sexual relationships.
49. Before the employment tribunal the title of the proceedings was amended to designate the respondent as "Church of Scotland Board of National Mission". The Board objected to the jurisdiction of the tribunal on two main grounds. The first was that Article IV of the Articles Declaratory scheduled to the Church of Scotland Act 1921 gave the church courts exclusive jurisdiction over questions of discipline. I shall return to this point later. The second was that Miss Percy was not an employee. She had no contract of employment. She held the office of a Minister of the Church of Scotland.
50. The tribunal disclaimed jurisdiction on the first ground and said that it did not have to deal with the second. It nevertheless expressed the opinion that there was no contract of employment and that Miss Percy was not an employee as defined in the 1975 Act. He referred in support to the cases of President of the Methodist Conference v Parfitt  ICR 176; Davies v Presbyterian Church of Wales  ICR 280 and Diocese of Southwark v Coker  ICR 140, to which I shall have to return in more detail. The chairman of the tribunal ended this part of his discussion by saying:
This obiter opinion that there was a contract of some unspecified nature is heavily relied upon by counsel for Miss Percy.
51. The Employment Appeal Tribunal upheld the decision of the tribunal on the ground that the church courts had exclusive jurisdiction. It expressed "with some hesitation" the opinion that the tribunal had been right to say that Miss Percy was not in employment within the meaning of the 1975 Act.
52. On further appeal to the First Division, the Lord President (Rodger) dismissed the appeal on the ground that Miss Percy was not in employment: 2001 SC 757. He said, at p 765, that there was a rebuttable presumption that
53. In the present case, he said, there was nothing to rebut this presumption. The documents setting out terms and conditions and the offer and acceptance of the appointment were no more than might be expected in connection with any appointment to an office, whether under the Crown or in the church. They did not point to a contract of service or for services.
54. The distinction in law between an employee, who enters into a contract with an employer, and an office-holder, who has no employer but holds his position subject to rules dealing with such matters as his duties, the term of his office, the circumstances in which he may be removed and his entitlement to remuneration, is well established and understood. One of the oldest offices known to the law is that of constable. It is notorious that a constable has no employer. It required special provision in section 17 of the 1975 Act to bring the office of constable within the terms of the Act and to deem the Chief Constable to be his employer. But there are many other examples of offices; public, ecclesiastical and private. In Dale v Inland Revenue Commissioners  AC 11, 26 Lord Normand said that a trustee held an office. The term was apt to describe "any position in which services are due by the holder and in which the holder has no employer." A director of a company does not, as such, have a contract with the company and is not an employee. He is an officer of the company. His duties and remuneration as a director are determined by the law and pursuant to the company's constitution. He may in addition have a service contract, but that is a separate relationship. And there are, of course, many offices held under the Crown. They would also not come within the 1975 Act if it were not for section 85(2):
55. Pursuant to these provisions, in Department of the Environment v Fox  1 All ER 58, Slynn J held that a rent officer, although holding a statutory office and not in employment, came within section 85(2)(b) because she performed services on behalf of the Crown for the purposes of a statutory body, namely a rent assessment committee.
56. The proposition that a minister of a church has no employer but holds an office, subject to rules which impose upon him certain rights and entitle him to a salary, stipend and other benefits, has been stated so often and for so long that I would not have thought that it was open to question. In Hastie v McMurtrie (1889) 16 R 715, 732 the Lord President (Inglis) said "Holders of benefices in the church are public officers, and these offices are munera publica." In Scottish Insurance Commissioners v Church of Scotland 1914 SC16, 23 Lord Kinnear said:
57. Lord Mackenzie likewise said, at p 27, that an assistant minister was
58. The same conclusion had already been reached by Parker J in respect of curates in the Church of England: Re National Insurance Act 1911: re Employment of Church of England Curates  2 Ch 563. He said (at p. 568):
59. For this reason, the Court of Appeal in Diocese of Southwark v Coker  ICR 140 decided that an assistant curate in the Church of England could not bring proceedings for unfair dismissal. The same was held of a minister of the Methodist Church in President of the Methodist Conference v Parfitt  ICR 176 and a minister of the Presbyterian Church of Wales in Davies v Presbyterian Church of Wales  ICR 280.
60. In the face of these authorities, the proposition that an ordinary minister of the Church of Scotland held an office and was not employed by the Board of Mission, the Presbytery, the Kirk-session or anyone else was not contested, at any rate until the argument before your Lordships' House. In the First Division a distinction was sought to be drawn between a minister and an associate minister. But that distinction was, in my opinion, rightly rejected by the Lord President. It is contrary to the decision in Scottish Insurance Commissioners v Church of Scotland 1914 SC 16, which dealt with assistant ministers. What makes an associate minister the holder of an office is that she is a minister. As associate minister she may have an ecclesiastical superior (compare what Parker J said of a curate in the National Insurance Act case at pp 569-570) but not an employer.