(back to preceding text)

    61.  I think that difficulty has been caused by some of the reasons given in recent cases for saying that a priest or minister is not an employed person. To say, as Lord Templeman did in Davies v Presbyterian Church of Wales [1986] ICR 280, that a priest is "the servant of God" is true for a believer but superfluous metaphor for a lawyer. As Laplace told Napoleon, there is no need for such a hypothesis. It would be no more (or less) illuminating to say that a constable was the servant of the law. The fact is that he holds an office, a well understood legal concept which creates rights and duties but does not involve a contract of employment.

    62.  Nor do I think it very helpful to say, as Mummery LJ said in Diocese of Southwark v Coker [1998] ICR 140, that a priest is not employed because her appointment was not accompanied by an intention to create legal relations. That, together with the proposition that the priest is the servant of God, gives the impression that she operates entirely outside the legal system, looking to God to provide for her. It is not surprising that the appellant's counsel pointed to the prosaic documents issued by the Board of Mission: the advertisement of the appointment, the written terms and conditions, the letter of offer and formal letter of acceptance. In the face of these documents, how can it be said that there was no intention to create legal relations? That submission seems to me unanswerable. 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. The nature of an office inevitably means that the procedures for appointment will closely resemble those attending the engagement of an employee. No doubt similar documentation could be found concerning the appointment of, among many others, judges, rent officers and superintendent registrars of births, deaths and marriages (see Miles v Wakefield Metropolitan District Council [1987] AC 539.) But that does not mean that their appointment to these offices created contractual relations.

    63.  I would therefore not accept, at any rate without considerable qualification and explanation, the Lord President's statement that there was a rebuttable presumption that the appointment of a minister was not intended to "give rise to obligations enforceable in the civil law". Subject to any question of jurisdiction under the Church of Scotland Act 1921, appointment to an office does give rise to obligations enforceable in civil law. So the question is not whether the appointed was intended to create legal relations but rather what legal relations it was intended to create. A ministry in the Church of Scotland is either an office recognised by law or it is not. If it is, then appointment to that office does not involve a contract of service or for services. It is, I suppose, possible that in addition to holding her office, a minister might enter into a contract of service with someone: for example, to act as chaplain to a prison or a nobleman. Miss Percy's arrangements with HM Prison, Noranside may have been of such a character. But those arrangements are not relevant to these proceedings. It is concerned with her demission of her charge and her status as minister.

    64.  Miss Percy, as I have mentioned earlier, relies upon the statement by the Tribunal that there was a contract of some kind. That, she says, is a finding of fact. It did not however form part of the Tribunal's findings of fact, expressly set out at the beginning of their reasons. It was simply an obiter remark and I think it was wrong in law because the evidence showed beyond doubt that Miss Percy was appointed to the office of associate minister.

    65.  The next question is whether Miss Percy, as she claims, came within the scope of Part II of the 1975 Act. That is concerned with discrimination "in the employment field." "Employment" is defined in section 82(1) as:

"employment under a contract of service or of apprenticeship or a contract personally to execute any work or labour".

    66.  Miss Percy plainly does not fall within this definition. She had no relevant contract of service and the work or labour which she executed were not pursuant to any contract. My noble and learned friend Lord Hope of Craighead, whose opinion I have had the advantage of reading in draft, accepts that Miss Percy had no contract of service but says that she had contracted personally to execute work and labour. But that cannot with all respect be right. The words "a contract personally to execute any work or labour" were intended to bring within the definition of employment a contract which is not of service but is for the provision of services. But that was not the case here. If the ministry had not been an office and the relationship between Miss Percy and the body who appointed her had been contractual, it would plainly have been a contract of service. It would have had all the characteristics of a contract of service. The reason why it is not a contract of service is because Miss Percy's duties were not contractual at all. They were the duties of her office.

    67.  Counsel urged your Lordships to give the language a broad construction. But I do not see how performance of the duties of an office which does not involve any contractual relationship can be said to be employment under a contract. Furthermore, it is clear from provisions such as section 17 (dealing with constables) and section 85(2) (dealing with public offices) that Parliament was well familiar with the distinction between employment as defined in section 82 and holding an office. In the cases of those office-holders intended to be brought within the terms of the Act, special provision was made. There is no such provision for clergymen.

    68.  Counsel for Miss Percy referred to section 19 of the Act, which in certain circumstances exempts from Part II "employment for the purposes of an organised religion" (subsection (1)) and "an authorisation or qualification… for the purposes of an organised religion" (subsection (2)). These exemptions are framed in terms which would not apply to the present case and counsel submits that Parliament must have inferentially intended that Part II would apply to ministers of religion, whether or not they were employed and whether or not the matter concerned an authorisation or qualification. In my opinion this is giving section 19 a meaning which it cannot possibly bear.

    69.  Mr Napier QC, on behalf of Miss Percy, called in the aid of European law. He said, correctly, that the 1975 Act was regarded as constituting the United Kingdom's compliance with the Equal Treatment Directive (Council Directive 76/207/EEC). Under the interpretative principle stated in Marleasing SA v La Comercial Internacional de Alimentacion SA (Case C-106/89) [1990] ECR I-4135, 4146, para 8, the Scottish court should—

"having regard to the usual methods of interpretation in its legal system, give precedence to the method which enables it to construe the national provision concerned in a manner consistent with the directive."

    70.  Mr Napier went on to submit that upon its true construction the Directive required the priests and ministers, though not employed by anyone, to enjoy the protection of the Directive.

    71.  I would reject this submission for two reasons. First, there is no way consistent with the usual methods of interpretation applied in Scotland by which section 82 can be construed as applying to someone who has not contracted either to serve or provide work and labour. Secondly, I do not think that the Directive requires it.

    72.  The Directive recites that—

"community action to achieve the principle of equal treatment for men and women in respect of access to employment and vocational training and promotion and in respect of other working conditions…appears to be necessary; [and] whereas equal treatment for male and female workers constitutes one of the objectives of the community…"

    73.  The recitals thus regard the Community competence exercised by the Directive as relating to equal treatment for "male and female workers". Article 2 defines the principle of equal treatment ("no discrimination whatsoever on grounds of sex") but without prejudice to the right of Member States to exclude occupational activities where "the sex of the worker constitutes a determining factor." The Directive is thus concerned with equal treatment of "workers", a term of art in Community law which was defined by the Court of Justice in Lawrie-Blum v Land Baden-Wurttemberg [1986] ECR 2121, 2144, at para 17:

"That concept must be defined in accordance with objective criteria which distinguish the employment relationship by reference to the rights and duties of the persons concerned. The essential feature of an employment relationship, however, is that for a certain period of time a person performs services for and under the direction of another person in return for which he receives remuneration."

    74.  In my opinion the office held by Miss Percy did not constitute an employment relationship and she was therefore not a worker. In arguing that the Directive applies to her, Mr Napier relied upon article 5, which requires equal treatment in "working conditions". These, he says, include the operation of procedures for dismissal. But "working conditions" are in my view the conditions under which workers work. The article cannot apply to Miss Percy if she was not a worker.

    75.  Since the events of this case, the scope of the 1975 Act has been enlarged and it may be that a minister of the church would come within it. By the Treaty of Amsterdam in 1999, article 119 of the Treaty, which required that men and women receive equal pay, was amended and renumbered 141. The new matter included paragraph 3 (emphasis added):

"The Council…shall adopt measures to ensure the application of the principle of equal opportunities and equal treatment of men and women in matters of employment and occupation, including the principle of equal pay for equal work or work of equal value."

    76.  Pursuant to this article, the Equal Treatment Directive was amended by Directive 2002/73/EC. Article 5 was deleted and a new article 3 substituted which referred to access to "employment, self-employment or to occupation" as well as working conditions. The United Kingdom gave effect to the amending Directive by the Employment Equality (Sex Discrimination) Regulations 2005 SI 2005 No. 2467, made under the European Communities Act 1972, which substantially amended the 1975 Act with effect from 1 October 2005. In particular, it added section 10B which made it unlawful to discriminate in a number of ways against various office holders, including the termination of an appointment: section 10B(3)(c). The office-holders to whom the new section applied were defined by section 10A and included an office in which "persons are appointed to discharge functions personally under the direction of another person". I do not propose to construe the new legislation, which has its difficulties, but it must be arguable that Miss Percy would today be an office-holder within the protection of the Act. But that was not the law at the relevant time.

    77.  For these reasons I do not think that Miss Percy came within the terms of the 1975 Act. That means that, like the Lord President, I do not have to consider whether the Church of Scotland Act 1921 would have excluded jurisdiction. I would only observe that if the 1975 Act now, upon its true construction, applies to ministers of the church, I would think it unlikely that it was not intended to apply to ministers of the Church of Scotland.

    78.  I would dismiss the appeal.

LORD HOPE OF CRAIGHEAD

My Lords,

    79.  This case raises some fundamental issues of law about the governance of the Church of Scotland. So I should like to set the scene for my discussion of them with these words of introduction.

    80.  Article III of the Articles Declaratory of the Constitution of the Church of Scotland in Matters Spiritual which are set forth in the Schedule to the Church of Scotland Act 1921 ("the 1921 Act") states that, as a national church representative of the Christian Faith of the Scottish people, the Church of Scotland ("the Church") acknowledges its distinctive call and duty to bring the ordinances of religion to the people in every parish of Scotland through a territorial ministry. The ministry is the principal instrument of the Church for discharging that obligation. Responsibility for planning and co-ordinating the Church's strategy and provision for the fulfilment of its mission as the national church is vested in the Board of National Mission of the Church of Scotland, who are the respondents to this appeal.

    81.  The sphere of pastoral duty to which a minister is inducted is known as a charge. The induction of a minister to a charge is a function of the presbytery of the geographical area within which the charge is situated. Induction is the process by which a new minister is recognised as a member of the presbytery in his capacity as minister to the charge to which he has been presented or by which he has been elected. The geographical bounds of each presbytery within Scotland are defined by the General Assembly. The General Assembly is the legislature, the highest administrative body and the supreme court of the Church. The presbytery ranks above the kirk session of each parish within its area in the Church's judicial hierarchy. Supervision of the life, doctrine and discipline of all ministers appointed to charges in its area is the responsibility of the presbytery.

    82.  Discharging its obligation to bring the ordinances of religion to the people of Scotland today through the ministry has become increasingly burdensome. As church attendances fall and the financial resources of the Church become ever more stretched various measures have had to be resorted to in order to reduce costs. Among other measures, congregations are being readjusted or united with a view to reducing the number of charges that need to be filled in the area. This is resorted to most frequently, but by no means exclusively, in rural areas. The process may be assisted by enlarging the ministerial team. This is done by the appointment as of a part-time, non-stipendiary auxiliary minister or by the induction into the charge as an associate of a full-time salaried assistant minister. Assistant ministers are, as regards their lives and doctrine, subject to the supervision and discipline of the presbytery in the same way as any other minister.

    83.  Nowadays, unlike ministers whose ordination and induction to a charge are exclusively functions of the presbytery, auxiliary ministers and assistant ministers are appointed by the Parish Re-appraisal Committee, one of the constituent committees of the Board of National Mission, on terms and conditions that are defined in writing by the Committee after consultation with the presbytery of the relevant area. To be eligible for appointment as an associate minister persons must, as in the case of those seeking appointment to a charge as its minister, first be licensed by a presbytery. Licences are obtained at the conclusion of their course of theological study, the object being to enable the presbytery to ensure that the applicant is a fit and proper person to proceed to the ministry.

    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 Re-appraisal 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.

    85.  That, in brief, is the background to the issues raised by this appeal. A more complete description is to be found in the title on Churches and other Religious Bodies in the Stair Memorial Encyclopaedia, vol 3 (1994): see especially paras 1506-1573.

    86.  One other point must be mentioned. In Scottish Insurance Commissioners v Church of Scotland, 1914 SC 16, it was held that assistant ministers were not employed persons within the meaning of Part I of the National Insurance Act 1911 because they were persons holding an ecclesiastical office who performed the duties of that office subject to the laws of the church to which they belonged and were not subject to the control and direction of any particular master. So they did not satisfy the conditions of Part I of the First Schedule to the Act as they were not employed under "any contract of service": see section 1(2) and Part I (a) of the First Schedule. Their position was contrasted with that of lay missionaries, who enjoyed no ecclesiastical status, had no relation to the presbytery and were under the control of the minister. As Lord Kinnear explained at pp 23-24:

"The probationers who are appointed to the position of assistant ministers are students of divinity who have obtained a licence to preach from the presbytery… Now, we are told in this case what the terms of the licence are. The licence bears that the presbytery licences the person named to preach the Gospel of Christ and to exercise his gifts as a probationer for the holy ministry. When a person so licensed is appointed to be assistant to a minister, I think that his authority to perform the duties that belong to that office does not arise from any contract between himself and the minister, or himself and the kirk-session or anybody else, but arises from the licence given to him by the presbytery to exercise his gifts. He is, therefore, in my opinion a person who is no sense performing duties fixed and defined by a contract of service."

    87.  The holding of an office and being an employee are not necessarily inconsistent with each other, as my noble and learned friend Lord Nicholls of Birkenhead has explained. This is because it is possible to conceive of the existence of a contract which sets out the duties that are to be performed by the holder of an office which could lead to the conclusion that the office-holder was an employee. But the reasoning which led to the decision in Scottish Insurance Commissions v Church of Scotland, 1914 SC 16, was not called into question during the hearing before your Lordships. The argument proceeded on the basis that the decision in that case was well-founded and that it would have to be distinguished if the appellant was to succeed in her appeal.

    88.  As I have just said, Miss O'Brien QC for the appellant did not seek to question Lord Kinnear's analysis. She accepted that the appellant could not claim compensation for unfair dismissal because there was no contract of service or apprenticeship in her case within the meaning of section 230(2) of the Employment Rights Act 1996. Her case however is that the position in discrimination cases is different, and that the First Division of the Court of Session (the Lord President (Rodger), Lord Cameron of Lochbroom and Lord Caplan) were wrong to affirm the decision of the Employment Appeal Tribunal that her claim for unlawful sex discrimination fell outside the jurisdiction given to the employment tribunal by section 63(1) of the Sex Discrimination Act 1975 ("the 1975 Act").

    89.  Section 63(1) of the 1975 Act confers jurisdiction on an employment tribunal to hear and dispose of a complaint that a person has committed an act of discrimination against the complainant which is unlawful by virtue of Part II of the Act, which deals with discrimination in the field of employment. Section 82(1) provides that "employment" for the purposes of the Act means "employment under a contract of service or of apprenticeship or a contract personally to execute any work or labour, and related expressions shall be construed accordingly." Miss O'Brien contended that in this case there was a contract between the appellant and the Board of Mission under which she had contracted personally to execute work or labour as an associate minister.

    90.  She accepted however that there was a further point that had to be addressed, namely whether the jurisdiction of the employment tribunal was excluded by section 3 of the 1921 Act on the ground that the issue which the appellant wished to raise was within the sphere of the Church's spiritual government and jurisdiction in terms of article IV of the Declaratory Articles. Section 3 provides that nothing in that Act shall affect or prejudice the jurisdiction of the civil courts in relation to a matter of a civil nature, subject however to the recognition of the matters dealt with in the Declaratory Articles as matters spiritual.

    91.  Article IV can be divided for convenience into two parts. The first part contains a declaration of the right of the Church to adjudicate finally in all matters of doctrine, worship, government and discipline. It provides:

"This Church, as part of the Universal Church wherein the Lord Jesus Christ has appointed a government in the hands of Church office-bearers, receives from Him, its Divine King and Head, and from Him alone, the right and power subject to no civil authority to legislate, and to adjudicate finally, in all matters of doctrine, worship, government, and discipline in the Church, including the right to determine all questions concerning the membership and office in the Church, the constitution and membership of its Courts, and the mode of election of its office-bearers, and to define the boundaries of the spheres of labour of its ministers and other office-bearers."

The second part contains an assertion that the civil authority has no right of interference in the proceedings and judgments of the Church within the sphere of its spiritual government and jurisdiction. It provides:

"Recognition by civil authority of the separate and independent government and jurisdiction of this Church in matters spiritual, in whatever manner such recognition be expressed, does not in any way affect the character of this government and jurisdiction as derived from the Divine Head of the Church alone, or give to the civil authority any right of interference with the proceedings or judgments of the Church within the sphere of its spiritual government and jurisdiction."

    92.  The question that has to be addressed with reference to the 1921 Act therefore is whether the claim which the appellant wishes to present to the employment tribunal is a claim of a civil nature or falls within the sphere of the Church's spiritual government.

    93.  It is time now to set out the facts which have given rise to the issues raised by this appeal. They have already been referred to by my noble and learned friend Lord Hoffmann, but I have the misfortune to differ from him as to how the appeal should be disposed of. So I should like to set out the facts that I consider to be relevant in my own way.

    94.  In 1993 a vacancy arose in the charge of Airlie linked with Kingoldrum linked with Ruthven. A meeting took place between the office-bearers of those congregations and those of the neighbouring charge of Glenisla linked with Kilry linked with Lintrathen. It was proposed that Airlie, Ruthven and Kingoldrum should unite and that the united congregation should be linked to Glenisla linked with Kilry linked with Lintrathen. This proposal was referred to the Presbytery of Angus, which in its turn asked the respondent's Parish Re-appraisal Committee to approve of the appointment of an associate minister to the linked charge to assist the minister of the parish for a five year period. On 21 September 1993 the Parish Re-Appraisal Committee agreed to this appointment. On 9 February 1994 the Committee approved the basis of union of the congregations of Airlie, Ruthven and Kingoldrum and the basis of linking of the charges of Airlie, Ruthven and Kingoldrum and Glenisla linked with Kilry linked with Lintrathen. The basis of linking provided among other things for the appointment of an associate minister to assist the minister and to act as chaplain at HM Prison Noranside, subject to the approval of the Joint Prison Chaplaincy Board.

    95.  Meantime steps were being put in hand for the appointment of the associate minister. On 11 January 1994 the Rev Douglas Nicol, the Department of Mission's General Secretary, sent drafts of an information sheet and a document setting out the terms and conditions of the appointment to the minister of the parish, the Rev Robert Ramsay, for his approval. He told the minister that he was arranging to have the appointment advertised at a later date in certain newspapers and that the Parish Re-appraisal Committee had decided to adhere to the custom of inviting the parish minister and a representative of the presbytery to serve on the appointments committee. On 18 January 1994 the Rev Ramsay wrote back saying that he had no comments to make on the drafts. On 1 February 1994 the Presbytery of Angus appointed its depute clerk to represent the presbytery on the appointments committee. The advertisements which were placed on 24 February 1994 in the newspapers asked for expressions of interest from ministers and probationers to be addressed to the Department of National Mission's General Secretary.

    96.  The appellant, who was ordained in 1991 and had already served for three years in the ministry, responded to the advertisement. On 20 April 1994 the Rev Nicol spoke to her on the telephone. He invited her to accept the appointment of associate minister. On 22 April 1994 he wrote to her confirming this invitation and enclosing for her information a copy of the terms and conditions of the appointment. On 26 April 1994 the appellant wrote to the Rev Nicol to give formal acceptance of the offer that he had made to her. On 17 May 1994 the Joint Prison Chaplaincies Board agreed to recommend her appointment to serve as chaplain to the prison at Noranside with effect from 20 June 1994. She was introduced as associate minister at the service of linking of Airlie, Ruthven and Kingoldrum with Glenisla linked with Kilry linked with Lintrathen which was held at Kilry Church on 19 June 1994.

    97.  Among the terms and conditions of appointment, which stated that the appointment was to be for a period of five years, were the following:

"3. Salary. Minimum stipend shall be paid centrally from the resources of the Board of National Mission. For the purposes of National Insurance and Retirement Pension and related payments including travelling expenses the appointment shall be considered the equivalent of a charge and these costs shall be paid from the same source. A manse will be supplied.

4. Supervision. The Associate Minister shall, as any other Minister, be responsible to the Presbytery in matters affecting life, doctrine or discipline, and shall have a seat in Presbytery. The Associate Minister will be expected to take due part in the affairs of the Presbytery in terms of Act II (1970). The Presbytery shall appoint a Support Committee to consult with the Parish Minister and Associate regularly, and to assist in the appointment.

6.  Aims and Duties.

The Associate Minister will be expected to work in the following areas of service:

(i)  Assisting the Minister of the parish

The Associate Minister would be expected to conduct worship every Sunday and working with the Parish Minister would be expected to assist in increasing the involvement and participation of all members in the united charge.

(ii)  As Chaplain to HM Prison, Noranside