PERCY V BOARD OF NATIONAL MISSION OF THE CHURCH OF SCOTLAND [2005] UKHL 73
FACTS:-
The Appellant brought a claim for sex discrimination against the Church of Scotland by a former minister of the church. She had been ordained in 1991 and in 1994 was appointed as an associate minister in a Church of Scotland parish in Angus. In 1997 she was alleged to have had an affair with a married elder in the parish. A committee was set up by the church to examine the matter and she was suspended. At a mediation meeting she was counselled to resign as a minister, and in December 1997 she did that. She then brought proceedings for unfair dismissal and sexual discrimination in an employment tribunal in February 1998 against the Church of Scotland. The essence of her claim was that the Church had not taken similar action against male ministers known to have had extra marital sexual relationships.
Her claim was dismissed by the employment tribunal. Her complaints concerned “matters spiritual” and fell within the exclusive jurisdiction of the Church of Scotland as provided by the Church of Scotland Act 1921. She did not have a contract of employment as defined in the unfair dismissal legislation or as defined in section 82(1) of the Sex Discrimination Act 1975.
Her appeal was dismissed by the Employment Appeal Tribunal, so she appealed to the Court of Session and again her appeal was dismissed. She then appealed to the House of Lords.
HELD:-
Lord Nicholls considered a number of authorities on the same issue. In all of these cases, the issue was whether a contract of services existed or not. In the unfair dismissal cases, the Appellant had to be an employee. An employee was an individual who had entered into or worked under a contract of employment, that is, a “contract of service” under the Employments Rights Act 1996.
Office holders and employees
However the Appellant’s claim was for sexual discrimination, which was prohibited under the Sex Discrimination Act 1975 “in relation to employment”. Under section 82(1) of the 1975 Act, employment meant employment under a contract of service or “a contract personally to execute any work or labour” in other words a contract for services as distinct from a contract of service. The Appellant accepted that she did not enter into a contract of service, i.e. she was an employee but that she was employed under a contract personally to execute certain work that was a contract for services as distinct from a contract for service.
The distinction between holding an office and being an employee was well established in English law. Prior to the introduction of employment legislation, an employee could be dismissed for any reason whereas an office holder could only be dismissed for good cause. Lord Nicholls went over the history of that distinction. It was possible for a person to hold an office and to be an employee at the same time.
Intention to create legal relations
Lord Nicholls referred to other cases involving church ministers, where the nature of the mutual obligations, their breadth and looseness and the circumstances in which they were undertaken, pointed away from a legally binding relationship. However that principle could not be taken too far. 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, holidays and accommodation seemed to fall firmly within the scope of an employment contract.
The parties to the contract
An employment tribunal had to be able to identify the parties to any alleged contract of service or for services. This could be a real problem with a church, which might be capable of making a contract, or suing or being sued. Lord Nicholls referred to the case of Diocese of Southwark v Coker [1998] ICR 140 which concerned a diocese of the Anglican Church.
The Appellant’s appointment
In this case the church had stated that the appointment would be for five years and had stipulated a salary together with accommodation and travelling expense. There were terms and conditions. After the events that led to the Appellant offering her resignation, she was suspended on full pay. The documents on their face seemed to show that the Appellant entered into a contract with the church to provide services on agreed terms and conditions. Her rights and duties were defined by her contract, not by the office to which she was appointed.
Therefore the contract was a contract of employment within the definition of section 82(1) of the 1975 Act, and the matter would be remitted to the Employment Tribunal.
The Church of Scotland Act 1921
This was the second issue raised by the respondent. The jurisdiction of the civil courts was excluded in relation to this matter by the 1921 Act. This gave the church exclusive jurisdiction in “matters spiritual”.
However a sex discrimination claim would not be regarded as a spiritual matter, since the foundation of the claim was a contract which, viewed objectively, the parties intended should create a legally binding relationship.
The Appellant had raised issues in relation to European Community law, but there was no need to address these as for the reasons given above, the Appellant’s appeal would be allowed.
Lord Hoffman went over the decision by the church to appoint a new minister and the terms and conditions, and the history of the case. He disagreed with Lord Nicholls.
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 terms of his office etc. was well established. An officer could be an employee at the same time. Lord Hoffman would not have thought it open to question that a minister of the church was an office holder.
Subject to any question of jurisdiction under the Church of Scotland Act 1921, appointment to an office did give rise to obligations enforceable in civil law. However appointment to that office did not involve a contract for service or for services.
The next question was whether the Appellant came within the scope of Part II of the Sex Discrimination Act 1975. “Employment” was 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.”
The Appellant had no relevant contract of service and the work or labour which she executed was not pursuant to any contract.
The Appellant’s counsel relied on European law and in particular the Equal Treatment Directive (Council Directive 76/207/EEC). That Directive applied to priests and ministers.
Lord Hoffman disagreed. Section 82 of the Sex Discrimination Act 1975 did not apply to someone who had not contracted either to serve or provide work or labour. Also the Directive referred to equal treatment of “workers” and the Appellant was not a worker. The Directive had since been expanded but only very recently and at the material time, the Appellant was not included within its terms.
Therefore Lord Hoffman would dismiss the appeal.
Lord Hope upheld the appeal. He went over the facts of the case. This case involved discrimination on the grounds of sex and could not contract out of that rule. However there had to be an intention to create a binding contractual relationship. Furthermore where the agreement was with a voluntary association such as a church, some patrimonial interest must be involved before the court will accept that it has jurisdiction to enforce it. There was no doubt in this case that there was an agreement between the parties, and a patrimonial interest.
The Appellant had undertaken by her contract with the Respondents to work on the terms and conditions offered to her. She might well be an officer (as Lord Hoffman had said) but the dominant purpose of the contract was to secure her appointment to the office. Those aspects of her agreement brought her under the protection of the Sex Discrimination Act 1975.
Lord Hope also considered the issue of the church’s legal status. The Church of Scotland was not a body that had been incorporated by statute. It had an identity and a constitution, but its status in law was that of a voluntary association, of which its adherents were members. It entered into legal relations by vesting its properties and endowments in the Church of Scotland General Trustees.
The practice had been for the court to give effect to the choice that a voluntary association makes as to the body in whose name it enters into agreements.
In this case the Church had delegated to the Respondents, the Board of National Mission the responsibility of planning and co-ordinating the Church’s strategy. The Board had recruited and appointed the Appellant as an associate minister. In the opinion of Lord Hope, it was to the actings of the Respondents in the performance of that contract that the Appellant’s complaint of discrimination must be directed.
Lord Hope then turned to the jurisdiction issue. There was nothing in the Sex Discrimination Act 1975 that specifically disapplied its terms in the case of the Church of Scotland. There was then the issue of whether the Equal Treatment Directive applied to this case. The Directive did not have direct effect (Marshall v Southampton and South West Hampshire Area Health Authority (Teaching) (Case 152/84) [1986] QB 401). However the court, when called upon the interpret national law was required to do so, as far as possible, in the light of the wording and the purpose of the Directive in order to achieve the correct result. (Marleasing SA v La Comercial Internacional de Alimentacion SA (Case C-106/89 [1990] ECR I-4135).
The Appellant came within the scope of the Directive. However the court still had to show respect for the Church’s right to exclusive jurisdiction in all matters spiritual as defined in Article IV of their Declaratory Articles. Article IV was sufficiently broadly worded for it to be possible, to say on which side of the dividing line between matters civil and matters spiritual this case lay. The exercise of the exclusive jurisdiction of the Church in spiritual matters did not extend to a claim by persons “employed” by the Respondents within the meaning of section 82(1) of the 1975 Act.
Therefore it was no open to the Church to claim exclusive jurisdiction under the Church of Scotland Act 1921 in these circumstances.
Lord Scott agreed with Lord Hope and Lord Nicholls.
Baroness Hale also agreed. She said that there was already powerful authority that an office holder might fall within the wider definition of “employment” for the purposes of the Sex Discrimination Act 1975. Baroness Hale referred to a case Perceval-Price v Department of Economic Development [2000) IRLR 380 where the Northern Ireland Court of Appeal was concerned with whether a full time chairman of a social security appeal tribunal, industrial tribunals and a Social Security Commissioner were covered by the Equal Pay Act (Northern Ireland) 1970 or the Sex Discrimination (Northern Ireland) Order 1976. It was common ground that they were statutory office holders but they were expressly excluded from the 1970 Act. The Northern Ireland Court of Appeal said that the express exclusion had to be excluded because of the Equal Treatment Directive 76/207. It was also common ground that this Directive had direct effect and that the departments responsible were emanations of the state.
Other office holders had been held to be employees. Judges might be servants of the law, just as clergy were servants of God but that did not mean that they were not “workers”. For an employer simply to label a post as an “office” could not be enough to take it out of the Sex Discrimination Act 1975.
The Equal Treatment Directive reinforced that conclusion. The court in Perceval Price could not use the interpretative technique employed in Marleasing SA v La Comercial Internacional de Alimentacion SA (Case C-106/89 [1990] ECR I-4135 (i.e. construing the Act in line with the Directive) because the Act in question contained an express exclusion, and such an approach would require an amendment. Therefore the court relied on the duty to disapply a provision in order to safeguard enforceable Community rights. That technique was not available in this case, because the Church of Scotland was not an emanation of the state. However it was possible in this case to apply the interpretation approach, because there was no express exclusion in the Sex Discrimination Act 1975.
The case would be remitted to the employment tribunal for consideration.
FACTS:-
The Appellant brought a claim for sex discrimination against the Church of Scotland by a former minister of the church. She had been ordained in 1991 and in 1994 was appointed as an associate minister in a Church of Scotland parish in Angus. In 1997 she was alleged to have had an affair with a married elder in the parish. A committee was set up by the church to examine the matter and she was suspended. At a mediation meeting she was counselled to resign as a minister, and in December 1997 she did that. She then brought proceedings for unfair dismissal and sexual discrimination in an employment tribunal in February 1998 against the Church of Scotland. The essence of her claim was that the Church had not taken similar action against male ministers known to have had extra marital sexual relationships.
Her claim was dismissed by the employment tribunal. Her complaints concerned “matters spiritual” and fell within the exclusive jurisdiction of the Church of Scotland as provided by the Church of Scotland Act 1921. She did not have a contract of employment as defined in the unfair dismissal legislation or as defined in section 82(1) of the Sex Discrimination Act 1975.
Her appeal was dismissed by the Employment Appeal Tribunal, so she appealed to the Court of Session and again her appeal was dismissed. She then appealed to the House of Lords.
HELD:-
Lord Nicholls considered a number of authorities on the same issue. In all of these cases, the issue was whether a contract of services existed or not. In the unfair dismissal cases, the Appellant had to be an employee. An employee was an individual who had entered into or worked under a contract of employment, that is, a “contract of service” under the Employments Rights Act 1996.
Office holders and employees
However the Appellant’s claim was for sexual discrimination, which was prohibited under the Sex Discrimination Act 1975 “in relation to employment”. Under section 82(1) of the 1975 Act, employment meant employment under a contract of service or “a contract personally to execute any work or labour” in other words a contract for services as distinct from a contract of service. The Appellant accepted that she did not enter into a contract of service, i.e. she was an employee but that she was employed under a contract personally to execute certain work that was a contract for services as distinct from a contract for service.
The distinction between holding an office and being an employee was well established in English law. Prior to the introduction of employment legislation, an employee could be dismissed for any reason whereas an office holder could only be dismissed for good cause. Lord Nicholls went over the history of that distinction. It was possible for a person to hold an office and to be an employee at the same time.
Intention to create legal relations
Lord Nicholls referred to other cases involving church ministers, where the nature of the mutual obligations, their breadth and looseness and the circumstances in which they were undertaken, pointed away from a legally binding relationship. However that principle could not be taken too far. 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, holidays and accommodation seemed to fall firmly within the scope of an employment contract.
The parties to the contract
An employment tribunal had to be able to identify the parties to any alleged contract of service or for services. This could be a real problem with a church, which might be capable of making a contract, or suing or being sued. Lord Nicholls referred to the case of Diocese of Southwark v Coker [1998] ICR 140 which concerned a diocese of the Anglican Church.
The Appellant’s appointment
In this case the church had stated that the appointment would be for five years and had stipulated a salary together with accommodation and travelling expense. There were terms and conditions. After the events that led to the Appellant offering her resignation, she was suspended on full pay. The documents on their face seemed to show that the Appellant entered into a contract with the church to provide services on agreed terms and conditions. Her rights and duties were defined by her contract, not by the office to which she was appointed.
Therefore the contract was a contract of employment within the definition of section 82(1) of the 1975 Act, and the matter would be remitted to the Employment Tribunal.
The Church of Scotland Act 1921
This was the second issue raised by the respondent. The jurisdiction of the civil courts was excluded in relation to this matter by the 1921 Act. This gave the church exclusive jurisdiction in “matters spiritual”.
However a sex discrimination claim would not be regarded as a spiritual matter, since the foundation of the claim was a contract which, viewed objectively, the parties intended should create a legally binding relationship.
The Appellant had raised issues in relation to European Community law, but there was no need to address these as for the reasons given above, the Appellant’s appeal would be allowed.
Lord Hoffman went over the decision by the church to appoint a new minister and the terms and conditions, and the history of the case. He disagreed with Lord Nicholls.
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 terms of his office etc. was well established. An officer could be an employee at the same time. Lord Hoffman would not have thought it open to question that a minister of the church was an office holder.
Subject to any question of jurisdiction under the Church of Scotland Act 1921, appointment to an office did give rise to obligations enforceable in civil law. However appointment to that office did not involve a contract for service or for services.
The next question was whether the Appellant came within the scope of Part II of the Sex Discrimination Act 1975. “Employment” was 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.”
The Appellant had no relevant contract of service and the work or labour which she executed was not pursuant to any contract.
The Appellant’s counsel relied on European law and in particular the Equal Treatment Directive (Council Directive 76/207/EEC). That Directive applied to priests and ministers.
Lord Hoffman disagreed. Section 82 of the Sex Discrimination Act 1975 did not apply to someone who had not contracted either to serve or provide work or labour. Also the Directive referred to equal treatment of “workers” and the Appellant was not a worker. The Directive had since been expanded but only very recently and at the material time, the Appellant was not included within its terms.
Therefore Lord Hoffman would dismiss the appeal.
Lord Hope upheld the appeal. He went over the facts of the case. This case involved discrimination on the grounds of sex and could not contract out of that rule. However there had to be an intention to create a binding contractual relationship. Furthermore where the agreement was with a voluntary association such as a church, some patrimonial interest must be involved before the court will accept that it has jurisdiction to enforce it. There was no doubt in this case that there was an agreement between the parties, and a patrimonial interest.
The Appellant had undertaken by her contract with the Respondents to work on the terms and conditions offered to her. She might well be an officer (as Lord Hoffman had said) but the dominant purpose of the contract was to secure her appointment to the office. Those aspects of her agreement brought her under the protection of the Sex Discrimination Act 1975.
Lord Hope also considered the issue of the church’s legal status. The Church of Scotland was not a body that had been incorporated by statute. It had an identity and a constitution, but its status in law was that of a voluntary association, of which its adherents were members. It entered into legal relations by vesting its properties and endowments in the Church of Scotland General Trustees.
The practice had been for the court to give effect to the choice that a voluntary association makes as to the body in whose name it enters into agreements.
In this case the Church had delegated to the Respondents, the Board of National Mission the responsibility of planning and co-ordinating the Church’s strategy. The Board had recruited and appointed the Appellant as an associate minister. In the opinion of Lord Hope, it was to the actings of the Respondents in the performance of that contract that the Appellant’s complaint of discrimination must be directed.
Lord Hope then turned to the jurisdiction issue. There was nothing in the Sex Discrimination Act 1975 that specifically disapplied its terms in the case of the Church of Scotland. There was then the issue of whether the Equal Treatment Directive applied to this case. The Directive did not have direct effect (Marshall v Southampton and South West Hampshire Area Health Authority (Teaching) (Case 152/84) [1986] QB 401). However the court, when called upon the interpret national law was required to do so, as far as possible, in the light of the wording and the purpose of the Directive in order to achieve the correct result. (Marleasing SA v La Comercial Internacional de Alimentacion SA (Case C-106/89 [1990] ECR I-4135).
The Appellant came within the scope of the Directive. However the court still had to show respect for the Church’s right to exclusive jurisdiction in all matters spiritual as defined in Article IV of their Declaratory Articles. Article IV was sufficiently broadly worded for it to be possible, to say on which side of the dividing line between matters civil and matters spiritual this case lay. The exercise of the exclusive jurisdiction of the Church in spiritual matters did not extend to a claim by persons “employed” by the Respondents within the meaning of section 82(1) of the 1975 Act.
Therefore it was no open to the Church to claim exclusive jurisdiction under the Church of Scotland Act 1921 in these circumstances.
Lord Scott agreed with Lord Hope and Lord Nicholls.
Baroness Hale also agreed. She said that there was already powerful authority that an office holder might fall within the wider definition of “employment” for the purposes of the Sex Discrimination Act 1975. Baroness Hale referred to a case Perceval-Price v Department of Economic Development [2000) IRLR 380 where the Northern Ireland Court of Appeal was concerned with whether a full time chairman of a social security appeal tribunal, industrial tribunals and a Social Security Commissioner were covered by the Equal Pay Act (Northern Ireland) 1970 or the Sex Discrimination (Northern Ireland) Order 1976. It was common ground that they were statutory office holders but they were expressly excluded from the 1970 Act. The Northern Ireland Court of Appeal said that the express exclusion had to be excluded because of the Equal Treatment Directive 76/207. It was also common ground that this Directive had direct effect and that the departments responsible were emanations of the state.
Other office holders had been held to be employees. Judges might be servants of the law, just as clergy were servants of God but that did not mean that they were not “workers”. For an employer simply to label a post as an “office” could not be enough to take it out of the Sex Discrimination Act 1975.
The Equal Treatment Directive reinforced that conclusion. The court in Perceval Price could not use the interpretative technique employed in Marleasing SA v La Comercial Internacional de Alimentacion SA (Case C-106/89 [1990] ECR I-4135 (i.e. construing the Act in line with the Directive) because the Act in question contained an express exclusion, and such an approach would require an amendment. Therefore the court relied on the duty to disapply a provision in order to safeguard enforceable Community rights. That technique was not available in this case, because the Church of Scotland was not an emanation of the state. However it was possible in this case to apply the interpretation approach, because there was no express exclusion in the Sex Discrimination Act 1975.
The case would be remitted to the employment tribunal for consideration.