New Testament Church of God v Stewart

JurisdictionEngland & Wales
CourtCourt of Appeal (Civil Division)
JudgeLord Justice Pill,Lady Justice Arden,Lord Justice Lawrence Collins
Judgment Date19 Oct 2007
Neutral Citation[2007] EWCA Civ 1004
Docket NumberCase No: A2/2006/2448

[2007] EWCA Civ 1004

IN THE SUPREME COURT OF JUDICATURE

COURT OF APPEAL (CIVIL DIVISION)

ON APPEAL FROM THE EMPLOYMENT APPEAL TRIBUNAL

UKEAT029306DA

Royal Courts of Justice

Strand, London, WC2A 2LL

Before

Lord Justice Pill

Lady Justice Arden and

Lord Justice Lawrence Collins

Case No: A2/2006/2448

Between
The New Testament Church of God
Appellant
and
Rev. Sylvester Stewart
Respondent

Antony Sendall (instructed by Messrs Geoffrey Leaver) for the Appellant

Daniel Barnett (instructed by Messrs Stone King) for the Respondent

Hearing dates: 27 & 28 June 2007

Lord Justice Pill
1

This is an appeal against a judgment of the Employment Appeal Tribunal (“EAT”), His Honour Judge Ansell presiding, handed down on 27 October 2006. The EAT dismissed an appeal by The New Testament Church of God (“the appellant”) from a decision of an Employment Tribunal held at Watford, a Chairman, Ms Manley, sitting alone, dated 30 March 2006. On consideration of a preliminary point, the Chairman held that Rev. Sylvester Stewart (“the respondent”) was an employee of the appellant within the meaning of Section 230 of the Employment Rights Act 1996 (“the 1996 Act”).

2

The Chairman found that the respondent is a minister of religion and that his pastorhood at the appellant's church in Harrow was terminated on 15 June 2005. (I will use the more commonly used word 'pastorate' in this judgment.) The respondent was suspended from his duties at Harrow on 1 February 2005 following an audit which appeared to show financial irregularities and in June 2005 what was described as a “trial board” convened by the appellant found the respondent guilty of unbecoming conduct and of misappropriating a sum of almost £60,000 from the appellant. An internal appeal is pending but that is agreed not to be relevant to the issue now before the court. A claim for unfair dismissal was presented to the Employment Tribunal on 1 September 2005 claiming reinstatement and compensation. Following her finding that the respondent was an employee of the appellant, the Chairman directed that the claim for unfair dismissal should proceed.

3

The status, in employment terms, of ministers of religion, to use a neutral and omnibus expression, has frequently been considered in the courts, which have been reluctant to find that a contract of employment exists. Section 230 of the 1996 Act provides:

“(1) In this Act 'employee' means an individual who has entered into or works under (or, where the employment has ceased, worked under) a contract of employment.

(2) In this Act 'contract of employment' means a contract of service or apprenticeship, whether express or implied, and (if it is express) whether oral or in writing”.

The appellant relies on earlier authorities; on behalf of the respondent it is submitted that the decision of the House of Lords in Percy v Church of Scotland Board of National Mission [2005] UKHL 73 involves a sea change and resolves the issue in the respondent's favour. Before considering the authorities, and because of its relevance to the outcome of the appeal, it is necessary to consider the structure under which the appellant operates and the respondent's position and duties within that structure. The appellant submits that the circumstances did not permit a finding that a contract of employment existed. First, the circumstances were not capable of giving rise to a contract and, secondly, if there was a contract, it was not a contract of employment.

4

The Employment Tribunal described the appellant:

“4.1 The NTCG is a Christian church, the aim of which is the propagation of the gospel according to the acts and teachings of the Church of God based in USA. It is represented in 170 countries. In some of those countries the church is known as the Church of God and in others, including the UK, it is known as the New Testament Church of God. In the UK it is a company limited by guarantee and a registered charity. It has around 108 churches in the United Kingdom. Within the UK there are 295 ordained ministers but only about 88 of them are based in churches where they receive payment for any services that they render, sometimes referred to as a “salary” and sometimes a “stipend”. A number of different titles attach to these ministers and that depends upon the level of credentials they have achieved. The NTCG's affiliation to the Church of God means that it is that institution which determines and awards the various levels of ordination.

4.2 The Church of God in USA has a general assembly and the Minutes of that assembly set out the background and rules as to how affiliate churches in the international community should be run. The Claimant has been a member of the NTCG for most of his life. He worked as a driving instructor between 1971 and 1999 and during that time was involved in different levels in the church in Harrow. There are a number of levels of ordination held by ministers within the Church of God and NTCG. The Claimant first became an “Exhorter”, then a “licensed minister” and finally, in 1984 became an “ordained minister”. He is also able to use the title “Bishop”. Over this period, he was involved in carrying out duties as a minister of religion at the Harrow NTCG”.

[In reciting the findings of the Employment Tribunal, I have retained the nomenclature there used; the respondent as “Claimant” and the appellant as “Respondent”].

5

The appellant's national office in Northampton carries out a number of administrative functions and a payroll function. It arranges meetings and seminars for minsters and is involved with discussions on increases on ministers' salaries and audits of local churches (4.3). There is an Executive Council of 10 Bishops.

6. “4.4 The Claimant did [in 1999] cease working as a driving instructor and [began] to receive a salary paid through the payroll at Northampton. He also was entitled to join a pension scheme which had been arranged by the NTCG. There was therefore an agreement, which was not reduced in writing, between the Claimant and those representing the Respondent that he would perform certain work including administrative tasks and spiritual duties and that he would receive payment for it and be accountable, in part at least, to the national office. The Respondent did not supply a contract of employment or anything analogous to it. Their position was and is that the ministers of religion who carry out work for the church, including those at the Northampton office (Bishops McLeod and Brown) are not employees.”

7

The Chairman found that the appellant's ministers who were responsible for churches as pastors were required to fill in a monthly report form for the Northampton office describing the work they had done. Collections were taken at the local church and a proportion forwarded to Northampton and paid into a “Ministers' Stipend Account.” The Chairman held, at paragraph 4.6:

“The money collected from the local churches, including that from Harrow amounting to the sum to cover their minister's salary and “on costs”, is paid into that account. The relevant minister is then paid from that account after tax and National Insurance have been deducted. If the local branch does not send in sufficient funds, the Respondent may give one month's grace but no more than that. In the case of the Harrow church there has always been sufficient funds to pay the Claimant but there have been other churches where payment has been suspended or the minister has himself acknowledged that there is insufficient funding to cover his payment.”

8

The Chairman found that the minister was expected to abide by the doctrine, policy and resolutions of the minutes, to which I will refer. The Chairman held:

“4.8 The way in which the Claimant carried out his work is that he was expected to address any spiritual needs of his local church and its members. Although there were no fixed hours, he was expected and carried out a number of services including two services on Sundays and a prayer meeting and a service on Mondays. He also ran matters such as choir practice and youth club, visited members in hospital or prison, provided pastoral care such as debt counselling and dealt with a number of administrative matters, in particular the completion of the forms referred to. With respect to the local church, he collected monthly mortgage payments and took it to the bank. He also officiated at weddings and other such functions.”

9

Having referred to the authorities, and to the submissions of the parties, the Chairman concluded:

“7.2 In my view there was an agreement between the Claimant and the Respondent that he should carry out work of a spiritual and administrative nature at the NTCG church in Harrow. Whilst he was free to arrange much of the work as he saw fit, he was also required to do so within the rules of the Church of God and in accordance with the procedures of the Respondent through its national office. Bearing in mind that there had been a previous incident where the Claimant was reprimanded and then told that he would be supervised, it is clear to me that both parties were under the impression that there was a connection between them which amounted to a legal agreement. Furthermore, the facts which led to this claim suggest that the Respondent does understand itself to be able to regulate and discipline its ministers. I accept that there was an intention to create legal relations, though the precise nature of those legal relations may not have been clear to all at the time of the agreement.

7.3 Once I have formed the view that there was an intention to create legal relations I must then look at other matters to consider whether, in this case, there...

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    ...to create legal relations (paragraphs 148 and 151). 65 A further case then came before this court, New Testament Church of God v Stewart [2008] ICR 282 (Pill, Arden, Lawrence Collins LJJ) in which this court upheld the finding of the ET that the minister in that case was an employee. Pill L......
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