Unfair dismissal; is a clergyperson an employee of the church?

An interesting case in the Fair Work Commission deals with the legal issues associated with determining whether a church minister is an employee capable of pursuing an unfair dismissal case and the legal principles discussed are relevant to the general question whether a person is an employee or not.

“Cases that examine the position of a minister

[26] In addition to the material submitted by the parties summarised above, a range of case

authorities were referred to by the parties regarding the assessment of whether the Applicant as

a Minister of the UCA is classified as an ‘employee’.

The President of the Methodist Conference v Preston

[27] Firstly, the cases specifically considering Ministers are addressed. The case of The

President of the Methodist Conference v Preston19 (‘Preston’) concerns an Appeal in the United

Kingdom Supreme Court of Ms Haley Anne Preston, a Minister in the Redruth Circuit of the

Methodist Church until 2009. Ms Preston wished to apply for an unfair dismissal claim in an

English employment tribunal, however, was ineligible due to not being an employee.

[28] In this decision, the Court considered the circumstances of Ms Preston’s appointment.

It was outlined that Methodist ministers do not have an express written contract of employment.

They are governed by the Constitution of the Methodist Church, which is contained in a Deed

[2023] FWC 1650

12

of Union, the standing orders of the Methodist Conference, and by specific arrangements as

made with a particular Minister. This led the court to consider ‘whether the incidents of the

relationship described in those documents, properly analysed, are characteristic of a contract

and, if so, whether it is a contract of employment’.

20

[29] It was determined that “the mere fact that the arrangement includes the payment of a

stipend, the provision of accommodation and recognised duties to be performed by the minister,

does not without more resolve the issue. The question is whether the parties intended these

benefits and burdens of the ministry to be subject of a legally binding agreement between

them.”

21

[30] That decision further stated that the correct approach in assessing whether an

employment relationship exists is to ‘examine the rules and practices of the particular church

and any special arrangements made with the particular minister.’ That decision considers the

above-mentioned regulations of the Methodist Church.

[31] In circumstances analogous to the current Respondent (the UCA), the decision also

considers the use of ‘stationing’, being outlined in a Methodist context to be the ‘formal act by

which a minister is assigned to a particular area and duties. This is regulated by the

‘Conference,’ the governing body of the Methodist church. The ‘Conference’ make decisions

on stationing based on recommendations received from the Circuit Invitation Committee, and

later, the Stationing Committee of the Circuit.22

[32] The decision additionally considers similar circumstances to the current matter, in that

the ‘lifelong character of the ministry’, specifically referring to Standing Order 700(1) which

outlined that ‘ministers are ordained to a life-long presbyteral ministry of word, sacrament and

pastoral responsibility in the Church of God which they fulfil in various capacities and to a

varying extent throughout their lives.’

23 The decision also outlines that a minister can only cease

to be in full connexion through sending a notice of resignation, which must be accepted by the

President and a special committee, or through a disciplinary charge being brought where a

disciplinary committee exercises its power under Standing Order 1134. It is determined that

apart from no appointment being able to be found, or permission to retire on age, ill-health, or

compassionate grounds, only that a Minister must be stationed.24

[33] Similar to those circumstances, in the current matter, ministers in the Methodist church

are entitled to a stipend through their ministry in accordance with Standing Order 801. Further,

through Standing Order 803, ministers are also entitled to a ‘manse’ to be used as a home and

base for their ministry. The stipend, manse and other entitlements are not seen as a form of

consideration, but ‘as a method of providing the material support to the minister without which

he or she could not serve God’.

25 The provision of a stipend and manse for Reverend Fihaki is

similarly considered in more detail below, as being indicative of a ministerial appointment and

not an employment relationship.

[34] In line with this, it was determined in that decision that three points were ‘cumulatively

decisive’. The first point involved is how the ‘manner in which a minister is engaged is

incapable of being analysed in terms of contractual formation. Neither the admission of a

minister to full connexion nor his or her ordination are themselves contracts. Thereafter, the

[2023] FWC 1650

13

minister’s duties depend on the initial unilateral decisions of the Conference,’ and the

acceptance of the calling by the Minister.

[35] The second point regarded as ‘cumulatively decisive’ in the Preston decision, was in

regard to the further examination of the stipend and manse awarded to the minister, and how

that the stipend and the manse are due to the minister by virtue only of his or her admission into

full connexion and ordination. The third point regarded as ‘cumulatively decisive’ concerned

how the relationship between the minister and the Church cannot be ended unless the

Conference, its Stationing Committee, or a disciplinary committee choose to end it. It is noted

that ‘there is no unilateral right to resign, even on notice. The ministry described in these

instruments is a vocation, by which candidates submit themselves to the discipline of the

Church for life.’

26

[36] The analysis of the minister’s relationship with the Methodist church in regard to the

that governance structure and payment of a stipend, makes the case relevant to the current

circumstances, as the decision found that the provision of the stipend and accommodation, and

discharge of the Minister’s duties, did not characterise an employment relationship. The case

concluded that there was no employment relationship, due to a lack of intention to create legal

relations but instead reflects a minister’s appointment.27

JGE v the Trustees of the Portsmouth Roman Catholic Diocesan Trust

[37] Another decision considering the position of a priest, the case of JGE v the Trustees of

the Portsmouth Roman Catholic Diocesan Trust28 (‘JGE’) from the England and Wales Court

of Appeal concerned potential ‘vicarious liability’ against the Trustees of the Portsmouth

Roman Catholic Diocesan Trust, requiring an analysis of the relationship between the

‘employer’ and ‘employee,’ in regard to Father Wilfred Baldwin and the Roman Catholic

Diocese of Portsmouth.

[38] Drawing on case law, Lord Justice Ward outlined the following approach for

determining a minister’s relationship with the church and whether it is akin to employment:

(1) “Each case must be judged on its own particular facts;

(2) There is no general presumption of a lack of intent to create legal relations between

the clergy and their church;

(3) A factor in determining whether the parties must be taken to have intended to enter

into a legally binding contract will be whether there is a religious belief held by the

church that there is no enforceable contractual relationship;

(4) It does not follow that the holder of an ecclesiastical office cannot be employed

under a contract of service.”

29

[39] Applying these principles, JGE found that there was no contract of service as the

appointment of Father Baldwin by Bishop Warlock was made without ‘any intention to create

any legal relationship between them’.

30 It was found that ‘pursuant to their religious beliefs,

their relationship was governed by the canon law, not the civil law’, and that the ‘appointment

to the office of parish priest was truly an appointment to an ecclesiastical office and no more’.

31

[2023] FWC 1650

14

[40] Whilst these factors are noted, due to the JGE case arising from a separate legal

jurisdiction, the decision is considered to be persuasive, but not precedent. However, it is noted

that there was a failure to establish a contract of employment or relationship akin to employment

due to a lack of intention to create legal relations. A further analysis of whether there was an

intention to create legal relations is undertaken with Reverend Fihaki later.

Reverend Howard Ian Knowles and The Anglican Property Trust, Diocese of Bathurst

[41] The further case of Reverend Howard Ian Knowles and The Anglican Property Trust,

Diocese of Bathurst32(‘Knowles’) concerned Reverend Howard Ian Knowles, Minister of the

Anglican Church who filed an application to the New South Wales Industrial Relations

Commission after being dismissed, that his dismissal was “grossly harsh, unfair unreasonable

and unjust within the meaning of the Industrial Relations Act”.

[42] In response to this application, the Anglican Property Trust, Diocese of Bathurst stated

that Reverend Knowles did not have standing to make the application as ‘First, the applicant

was an ordained priest, who served God, and the people committed to his charge, but he did not

serve an employer. Secondly, there could be no employment without a contract, and the

applicant was not a party to any relevant contract, let alone a contract of employment’. The

UCA’s arguments were similar to these circumstances.

[43] After considering all the evidence provided, the New South Wales Industrial Relations

Commission found that it had no jurisdiction to determine Reverend Knowles’ unfair dismissal

claim. It was concluded by Wright J that there was no basis that the Applicant’s situation was

different ‘from any other Anglican clergy’. Wright J then went on to determine that:

“The materials clearly show that the relationship was a religious one; to paraphrase

the words of Priestley JA in Scandrett, a consensual compact to which the parties were

bound by their shared faith based on spiritual and religious ideas – not based on a

common law contract.”

33

The Respondent similarly argued this case authority in relation to Reverend Fihaki.

[44] Additionally, the New South Wales Industrial Relations Commission in that case

considered the word ‘employment’ to not be a significant indicia to prove an employment

relationship, stating that in the context used, it was synonymous with ‘appointment’.

Ultimately, it was found that:

“When one considers the exchange of correspondence on 18 and 19 April 1995 and

accepting that the language of contract is apparently used, it is nevertheless also the

language of pastoral and parish responsibility in relation to discussions between the

Bishop and the applicant concerning a renewal or extension of his licence. I do not

accept that this conduct can be considered to be conduct leading to the formation of a

contract or conduct with the intention of concluding arrangements which were intended

to be enforceable at law. This conclusion not only derives from the object of the

arrangements (the obtaining of a non-contractual licence specifically in the context of

the normal approach of the church in granting licences to the clergy), but is also to be

[2023] FWC 1650

15

seen in terms of a difference of view between the Bishop and the applicant as to the

appropriateness of the clergy undertaking lengthy chaplaincy appointments”

34

[45] The Knowles decision is applicable to the circumstances of the current case of Reverend

Fihaki, in that it found the Applicant was engaged in a spiritual capacity without a contract of

employment.35 Similar circumstances were argued by the Respondent in the current matter. The

alternative to a written contract was raised by Reverend Fihaki, and whether an oral contract of

employment existed between the current parties, as examined below.

President of the Methodist Conference v Parfitt

[46] The final case that examined the specific circumstances of a minister is President of the

Methodist Conference v Parfitt36(‘Parfitt’) which concerned a Minister appointed on the Jersey

(Channel Islands) Circuit, who had lodged an unfair dismissal claim in a British industrial

tribunal. The tribunal initially held that the detailed arrangements between the Minister and the

church set out in the Constitution of the Methodist Church and the degree of control held over

the Minister by the Church, indicated a contract of employment. This decision was appealed by

the President of Methodist Conference and eventually overturned; finding that no contract of

service existed between the parties.

[47] It was held that ‘a correct appreciation of the spiritual nature of the relationship between

a minister and the Methodist Church showed that the arrangements between the minister and

the church in relation to his ‘stationing’ throughout his ministry, and the spiritual discipline

which the church was entitled to exercise over the minister, in relation to his career were noncontractual; that, therefore the applicant was not employed by the church under a contract of

service’.

37

[48] Analogous to the present case, it was found that the tribunal initially erred in not

considering that ‘the applicant was called to the ministry by God and was ordained in the office

of minister by Conference, and accordingly there was no contract between the parties.’

Similarly, it was found that the tribunal erred in ‘confusing a wage or remuneration (which was

a reward for work/or skill) with a minister’s stipend (which was an allowance paid to enable a

minister to follow his vocation)’. Further it was found that compulsory superannuation and

income tax payments on a stipend were ‘based on convenience and compromise and do not

represent any binding decision in principle on the status of ministers.’

38

[49] It was additionally determined that the type of control considered in the initial decision

was incorrectly applied, being that ‘of a master over his servant’,

39 rather than ‘the exercise of

professional or spiritual disciplinary function which self-employed professional people or

ecclesiastical functionaries might submit to’.

40 This case found no contract of employment

between the parties existed.41 This decision considered a range of matters that also translate to

the circumstances of Reverend Fihaki, such as the spiritual call, rather than control, stipend,

taxation payments and the provisions in the Letter of Call, which were not considered to be

representative of an employment relationship.

[50] To summarise the above cases examining Ministers, all found that there was no contract

of employment between the parties. At the core of these cases, was a finding that there was a

lack of intention to create legal relations. The courts also determined that matters such as

[2023] FWC 1650

16

payment of a stipend, superannuation, income tax and provision of housing were not conclusive

to demonstrate the need or existence of a contractual relationship, in the form of a written or

oral employment contract.

Ermogenous v Greek Orthodox Community of SA Inc

[51] The case of Ermogenous v Greek Orthodox Community of SA Inc42 (‘Ermogenous’) is

the most applicable of these ‘Minister’ cases to the current circumstances. This case concerned

an Archbishop of the Greek Orthodox religion who sought payment of his accrued annual and

long service leave. The case also considered the intention to create legal relations, especially

with unincorporated associations, in addition to considering some ‘indicia’ of the relationship.

In this regard, the Applicant relied on the Letter of Call provided as a basis for his contract and

duties, as a Minister with the UCA.

[52] The Respondent highlighted Ermogenous in their submissions, referring to the starting

point; that the proposition that an intention to create a contractual relationship about the

remuneration, maintenance and support of a minister of religion, is not to be presumed.

[53] Ermogenous was appealed to the High Court from the Full Court of the Supreme Court

of South Australia. The High Court upheld the appeal and confirmed that presumptions about

intention, should not be used and that in each case, intention must be proved using an objective

test. The High Court held that the Full Court erred in finding that there was no intention to

create legal relations, based on the nature of the employment contract, without taking full

consideration of the circumstances that surrounded this particular contract, but ultimately

upheld that there was no intention to create legal relations in this case.

[54] The intention to create contractual relations is further outlined in Ermogenous as an

assessment taking account of the ‘subject-matter of the agreement, the status of the parties to

it, their relationship to each other, and other surrounding circumstances’.

43 The intention to

create contractual relations is further defined as ‘what would objectively be conveyed by what

has been said or done, having regard to the circumstances in which those statements and actions

happened.’

44 The decision considers that there are aspects of a spiritual relationship that may

give rise to legally enforceable rights and duties. It is outlined that ‘to say that a minister of

religion serves God and those to whom he or she ministers may be right, but that is a description

of the minister’s spiritual duties. It leaves open the possibility that the minister has been engaged

to do this under a contract of employment’.

45 It is further noted that the existence of a religious

character in a relationship, does not create any presumption against an intention to create legal

relations.

[55] It is outlined that a Minister may hold their authority through an office being created

through the laws of the Church rather than a contractual relationship being negotiated. This

requires ‘consideration of the structures of the organisation in which the office is to exist’,

46

meaning the UCA Regulations, Constitution, and Synod By-Laws in determining the

Applicant’s relationship with the Respondent.

Structure of the Church – unincorporated association

[2023] FWC 1650

17

[56] Further, the decision considers the difficulty of ascertaining the ‘employer’ if a contract

of employment was to exist, and the difficulty enforcing a contract created with an

‘unincorporated body’.

47 This is done by reference to the case of Diocese of Southwark v

Coker48 where a Bishop, the Board of Finance that paid the stipend to the Curate, and the Church

Commissioner were all added as respondents to an unfair dismissal claim, (with the Vicar who

offered the contract of employment not being named as a party).

[57] The UCA also submitted that the Church is also an ‘unincorporated association’:

“…the property trust exists because it has to operate within the commercial world. Any

search of the ABN registry will identify that the Uniting Church Property Trust appears

repeatedly against multiple ABNs because of the entities that the church operates

throughout Queensland. That ABN represents the Uniting Church in Australia Property

Trust (Q.) trading as the Queensland Synod.”

49

“…the Property Trust does employ employees and a number of those employees are, …

employed at what we call the synod office. It’s the administration arm of the church.”

50

(Emphasis added)

[58] Reverend Fihaki submitted that the Church is a ‘incorporated body’, and a ‘registered

business with an ABN.’ The evidence was that the registered business under the ABN was not

the Church, but instead the Property Trust through which the Church conducted its

‘commercial’ business.

[59] I accept the Respondent’s submissions that the Church arm of the UCA is comprised of

unincorporated entities and as such unable to enter into contracts. In accordance with

Ermogenous, it is noted that no unincorporated entity can be identified in the process of the

minister’s placement, as the ‘putative employer.’ In the current circumstances, this weighs

against an employment contract being created between these parties and gives further support

of the earlier conclusion that one does not exist. There was also no evidence (apart from the

generation of the payslip and its limited terms, discussed later) of any connection between the

Property Trust and Reverend Fihaki. The Letter of Call was issued by the Church, not the

Property Trust. Whilst the Applicant’s response to the submissions on the Church being made

up of unincorporated entities unable to contract with him is taken into account, no evidence of

any contract between the Applicant and the unincorporated associations of the Church and/or

the Property Trust supports this argument of an employment relationship.

Intention to create legal relations

[60] If the Applicant is arguing a contract of employment was formed with the Church, the

case of Ermogenous outlines the ‘difficulties that arise if action is brought to enforce a contract

said to have been made with an unincorporated body’ (such as the Church in the current

circumstances). This again weighs against the formation of an employment relationship

between the current parties.

[61] In the current matter of Reverend Fihaki, argued that the Letter of Call was his contract

of employment and there were some matters and entitlements referred to in the Church’s

Regulations which were set out in the Letter of Call. The Letter is signed by the Secretary of

[2023] FWC 1650

18

the ‘Placement Committee’ (rather than as a representative of the Property Trust). There is no

other evidence of an intention to create legal relations in a negotiated employment contract

between the Applicant and the Church. In fact, the Letter of Call specifically states that it is not

an employment relationship. The Property Trust has standing to engage in the commercial

matters and as such performs the function of paying the stipend to Ministers, but there is no

other evidence of any contract between those parties.

[62] The Respondent set out that there was no intention to create legal relations, and the

Letter of Call outlined how the spiritual calling would function, but did not represent an

employment contract, as assessed above.

Application of Recent Cases – Contract of Employment

[63] Due to the lack of certainty to be found in the Minister cases in application to this case,

consideration is undertaken of the construction of a contract, if one exists. The recent cases of

ZG Operations Australia Pty Ltd v Jamsek51 (‘Jamsek’) and Construction, Forestry, Maritime,

Mining and Energy Union v Personnel Contracting Pty Ltd52 (‘Personnel Contracting’)

changed the tests for considering whether an employment relationship existed between parties

where the parties committed the relationship to a written document.

[64] A useful analysis of Personnel Contracting and Jamsek was applied in the Commission

decision of Waring v Hage Retail Group Pty Ltd53 (‘Hage’):

“[54] The High Court, via the combination of judgements in both Jamsek and Personnel

Contracting, has largely rejected an approach whereby the relationship between parties

across its life span is examined (including how the relationship operates in practice).

The Court has stated that contractual terms and not performance, where those terms

can be ascertained and where the contract is not a sham, will determine the true nature

of the relationship. However, the Court has observed that the manner in which the

relationship is worked in practice may be relevant for certain limited purposes, such as

to find contractual terms where they cannot otherwise be ascertained or to determine

the nature of any variation to agreed terms.

[55] Indicia (such as those identified in earlier cases in the Court) may be relevant but

only insofar as the terms of the contract give voice to them. One approach, to be used

as a guide, is to look at whether, under the contract, the worker is engaged to work in

the business of another, though this may not necessarily be useful in all cases. The extent

of a contractual right to control, as evident from the terms of the contract itself, remains

a major signifier of an employment relationship. That an arrangement was brought

about by the superior bargaining power of one party has no bearing on the meaning

and effect of the contract.

[56] Amongst the caveats expressed by the Court, is that a mere label acting as a

subterfuge to the true nature of the contractual relationship will not determine the status

of the parties. In this respect at least, the law remains unchanged by these recent

decisions.”

(emphasis added)

[2023] FWC 1650

19

Identification of a contract

[65] In the current matter the written contract is not immediately set out. However, the

Applicant clarified his reliance on the Letter of Call as the written document dictating the terms

of his ‘employment’ at a later date in his submissions.

54 The indicia that may be relevant to a

contract of employment are considered below, as to whether the Letter of Call ‘gave voice’ to

them as terms of a contract.

[66] An application of the ministerial cases showed that such documents did not indicate nor

were they conclusive of an intention to create legal relations and were therefore not considered

to be contracts of employment, but instead evidence of a spiritual appointment. The existence

of an oral contract is also considered below, due to the Applicant’s initial submissions being

silent as to the form of his contract. However, it is noted that no evidence has been put as to

when the terms of an oral contract may have been agreed to by the parties.

[67] The Commission case of Zahab v Al-Hilkma College Ltd55 (‘Zahab’) discussed the

difference between an ‘employee’ and a ‘volunteer,’ and Commissioner Ryan in his decision

referred to Ermogenous56 in its finding that an objective assessment of the state of affairs

between the parties’ must be undertaken and what is ‘objectively conveyed by what is said or

done’ must be considered. The Commissioner outlined several factors/indicia, which influenced

his decision that there was an intention to create legal relations rather than a volunteer

relationship. These were consistent with the indica considered in the employee/independent

contractor dichotomy, and the Commissioner found the Applicant was not free to come and go

as the Respondent had submitted.57

[68] Though Zahab does not concern a ministerial relationship, it does discuss the application

of Ermogenous in considering an intention to create legal relations in a volunteer relationship,

(which is outside of the duality of ‘employee’ and ‘independent contractor’) and indicated that

the indicia and intention to create legal relations are relevant to multiple types of relationships,

not just that of employee or independent contractor.

[69] An oral contract was considered in the case of Church of Ubuntu v Chait58 (‘Ubuntu’).

This case concerned an appeal by the Church of Ubuntu, to a finding at first instance that there

was a contract between Ms Chait (who was not a Minister) and the Church, and that she was an

employee rather than an independent contractor, under an oral contract. In the originating

decision, the application of Personnel Contracting and Jamsek was examined and it was

determined, that where there is no comprehensive written contract between the parties, the

multifactorial approach should then be used to ‘ascertain the proper characterisation of the

relationship.’

59 The Full Bench in the appeal, upheld the original analysis of the multifactorial

test and determined that there was no error of law in this approach, or the finding that the

Applicant was an employee.60 However, in that matter, due to the agreed existence of a contract,

the matter turned on the question of whether it was ‘employment’ or an ‘independent contractor’

relationship. Ubuntu can be distinguished from the present case, in that the question is whether

there is a contract at all. In Reverend Fihaki’s case, due to falling outside of the usual

dichotomy, not all indicia were present (or ‘given voice’ to in the Letter of Call) or able to be

assessed.

[2023] FWC 1650

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[70] The Federal Court case of Secretary Attorney-General’s Department v O’Dwyer61

(‘O’Dwyer’) concerned an appeal from the Administrative Appeals Tribunal as to whether the

Applicant was an employee for the purposes of the Corporations Act and was therefore entitled

to certain exclusions from bankruptcy proceedings. This case considered the lack of a written

contract, and in determining if an oral contract existed, whether the alternate application of the

multifactorial approach was correct. Goodman J considered both Personnel Contracting and

Jamsek and found that the approach in those cases should also be applied to oral contracts, or

partly written and partly oral contracts.

62 The decision noted that where the contract is wholly

oral, it is possible that all the relevant terms will not be spelled out in full at the time the oral

agreement is formed.

[71] In O’Dwyer, Goodman J stated that it must be considered “whether the rights and

obligations created by [an] oral contract gave rise to an employment relationship.”

63 For there

to be legal rights and obligations for the court to enforce, there must be a determined

employment contract. In the current case, Reverend Fihaki has not put forth compelling

evidence to confirm a contract in oral, written or a combination format. However, the closest

document he argued as a contract of employment was the Letter of Call. Similar documents to

the Letter of Call have been considered, with reference to the ministerial case law, and were

found not to be indicative of an employment contract.

[72] However, to discharge the full scope of the tests, it is relevant to assess the Letter of

Call against the indicia. In the matter of Muller v Timbecon Pty Ltd64 (‘Timbecon’), on appeal

the Full Bench addressed whether a photographer was an employee or an independent

contractor. The approach in the first instance decision (whilst it examined the usual dichotomy),

is useful to the current circumstances in assessing the terms of the Letter of Call and deciding

whether the Applicant was an ‘employee’ or a separate category of ‘Minister.’ The case

addressed the relevance of the wholly oral contract as the point of distinction from Personnel

Contracting. It was noted that where a contract is not wholly in writing, it is necessary on

commencement to identity the terms of the contract, the parties to it, when it was formed, and

that some recourse may be had to external events.65 Deputy President Bell in Timbecon at first

instance stepped through the series of established indicia, including ownership of the business,

the right to contract, use of labels and post contractual conduct, and emphasised the ‘totality’

of the relationship in terms of the characterisation of the rights and duties established between

the parties.66

[73] In the current circumstances of Reverend Fihaki, the closest reference by the Applicant

to an employment contract with the Church, is the application of those Church documents of

his calling, specifically the Letter of Call. In the current matter, the Applicant in the final stages

of the matter argued that a contract was formed when he was offered the Letter of Call. The

Respondent argued that this Letter of Call to the Ministry did not represent an employment

contract, and nor was there an oral contract.

[74] If the Letter of Call was considered to be a contract of employment, as per Personnel

Contracting and Jamsek, the multifactorial approach is not applicable to determine the terms of

the relationship except where the contract gives voice to them. It is noted however, that the

Letter of Call specifically states at paragraph 13 “this document represents the placement

arrangement approved by the Presbytery and is not an employment relationship.” The task of

contractual construction in accordance with Personnel Contracting and Jamsek, the intention

[2023] FWC 1650

21

of the parties should only be derived from letter of Call ;the contents of a document, not how

the relationship has played out in practice.67 As such, there could not be a finding to support a

contract, based on the actual terms of agreement between the parties, or based on the case

authorities, as set out. The clear intention on the face of that document is that it is not an

employment contract.

Post contractual conduct

[75] The Applicant argued, in terms of post contractual conduct, that the later payment of the

JobKeeper benefit, which was not contemplated in the Letter of Call, was conduct which

affirmed an employment relationship and formed part of the ‘employment’ relationship. The

Applicant’s argument was that if the Letter of Call and the indicia are examined including how

the relationship had played out, that a conclusion that he was an employee is able to be formed.

An examination of the indicia is set out below.

[76] The reasons of Gordon J in Personnel Contracting 68 speak of the potential “need for

recourse to conduct” to identify “contractual terms that were agreed.” There is therefore greater

scope in the case of oral contracts for subsequent events to be considered as part of the process

of identification of the terms. Expansion of terms from a written contract is what the High Court

in Personnel Contracting and Jamsek were attempting to guard against.

[77] The Respondent’s submissions emphasised the structure of the organisation, and that

the Church (as opposed to the Property Trust) is represented by a range of unincorporated

associations,69 and therefore there could not be a contract, oral or otherwise, formed with these

entities which can be taken into account.

Applicable principles – Employee, contractor or Minister

[78] The Full Bench of Timbecon70 affirmed Deputy President Bell’s approach of identifying

the terms of the contract and applying the relevant indicia:

“[15] After setting out the background and factual findings, the Deputy President turned

to consider the applicable legal principles to determine whether the Appellant was an

employee or an independent contractor. The Deputy President began by pointing to the

relevance of CFMMEU v Personnel Contracting Pty Ltd [2022] HCA 1 (Personnel

Contracting) and ZG Operations Australia Pty Ltd v Jamsek [2022] HCA 2 (Jamsek),

both of which were addressed by the parties in their submissions.

[16] Given the contract between the Appellant and Respondent was wholly oral, and

noting that this was a key point of distinction from Personnel Contracting, the Deputy

President addressed additional matters concerning post-formation conduct and

variation. To this end, the Deputy President observed that where a contract is not wholly

in writing, it is necessary at the threshold level to identify the terms of the contract, the

parties to it and when it was formed because, as the Deputy President noted, inevitably

some of these aspects will be in dispute. The Deputy President then provided the relevant

principles to identify express and implied terms in an oral agreement, and noted that

like written contracts, recourse may be had to external events where appropriate.

[2023] FWC 1650

22

[17] The Deputy President subsequently considered the characterisation of traditional

indicia, including the existence of a right to control and the “own business/employer’s

business” dichotomy. On this point, the Deputy President noted that Personnel

Contracting confirmed that while the elements of control and the own/employer’s

business dichotomy are significant matters, it remained appropriate to consider the

“totality” of the relationship between the parties albeit as framed by the rights and

duties established by the parties’ contract.

[18] Next, he turned to the use of “labels” as the Respondent placed some importance

on the fact that the parties had called the relationship a contracting relationship,

whereas the Appellant submitted that “the High Court has held that the label ascribed

by the parties to the engagement is of no consequence.” The Deputy President did not

accept that the High Court had made such a definitive statement, although he did accept

that the parties’ own descriptions cannot be determinative.

[19] Finally, the Deputy President considered how conduct which occurs after the

formation of the contract should be characterised. The Deputy President considered the

judgments of Kiefel CJ, Keane and Edelman JJ at [45], and Gordon J (Steward J

concurring) at [176], which clarified that such conduct cannot, as a general rule, be

admitted for the purpose of construing the contract. He noted that while there are

exceptions to this general rule, as discussed below, they are confined.”

(emphasis added)

Letter of Call – indicia

[79] The assessment in this case is a novel departure from the usual dichotomy in

consideration of employment or an independent contracting relationship. In assessing whether

there is an employment relationship, the indicia71 are utilised.

[80] In this case, Reverend Fihaki put forth evidence on a confined set of indicia which he

relied on to propose the existence of a contract of employment arising from the Letter of Call

which are ‘given voice’ or the relationship in practice. Not all indicia are able to be assessed

for want of evidence or submissions on a number, however those indicia that can be assessed

are considered below.

[81] In summary, the Applicant accepted a call to service on 16 May 2013. This call to

religious service was governed by the Letter to Call with some Terms and Conditions of the

Call, and the relevant UCA Constitution and Regulations, as well as the Queensland Synod ByLaws.

[82] A reading of the UCA Constitution finds that it defined the term ‘minister’, outlines the

authority of ministers, the Assembly, and the Synod, as well as governing Ordination, and the

placement of ministers. Similarly, the UCA Regulations refer to the duties, recognition,

termination, accountability, and the stipend paid to ministers. The Queensland Synod By-Laws

cover inter-synod transfers of ministers, a minister’s entitlement to leave, and the provision of

a residence ‘manse’ for a minister. It is undisputed that this is the only documentation of any

rights or entitlements in relation to Reverend Fihaki’s role as a Minister. It is also set out that

the congregation (not an employer) is responsible for the payment of a range of entitlements.

[2023] FWC 1650

23

Indicia – labels use of ‘employee’ on payslip

[83] The Applicant placed significant reliance on the use of the word ‘employee’ on his

payslips and that his ‘employer’ was identified as “The Uniting Church in Australia – Qld

Synod ABN 25548385225” which he argued was different to the Property Trust, which was

called “The Uniting Church in Australia Property Trust (Q.)”

72 The Respondent in response,

submitted that the term or label ‘employee’ was used not to denote the correct characterisation

of a Minister as an employee, but was due to their use of a generic template payslip which relied

on the regular terms and limited categories of the outsourced payroll system of the payroll

provider.73

[84] As set out previously, the UCA outlined their two-arm structure, with the Property Trust

as the commercial arm and the congregations being unincorporated associations, forming the

other arm as the ‘Church’ and that neither could be the Applicant’s employer. The Respondent

emphasised that the Property Trust whilst administering some payments to ministers, does not

employ any ministers. The Respondent further referred to the history and formation of the

Church in support of this. In examining the position of ministers, reference was made to the

foundational document of the Basis of Union to outline that the Church is a ‘series of interrelated councils’, including the Assembly, state and territory Synods, regional Presbyteries, and

local Congregations.

[85] The Applicant contended that the ABN was not attached to the Property Trust, but to

the Church due to how it appeared on his payslip,74 however he provided no further evidence

other than this to support his assertion on this point of how it indicated an employment

relationship. The Respondent’s submission that the use of the ABN and the Property Trust is

demonstrated that it was to ‘allow the church and its various unincorporated associations to

conduct business in a secular world’ and that the use of terms labels such as ‘employee’ and

‘employer’ on the generic payslip are not conclusive of such a relationship. I also accept the

Respondent’s submission that the Property Trust holds the ABN and operates as the commercial

arm of the Church through which payment of the stipend etc is made. No employment

relationship can be found between the Property Trust and the Applicant purely based on these

payments or the labels on the payslips.

Indicia – payment of Jobkeeper – not conclusive of employee

[86] Further, I refer to the Applicant’s assertion that the payment of JobKeeper payments

was indicative of an employment relationship, as the Applicant argued the JobKeeper payment

was only available to ‘employees.’

[87] The Respondent submitted that although the JobKeeper program initially applied to

employees only, the payments were only later provided to the Applicant. The payments were

made following the Australian Government’s passing of the Coronavirus Economic Response

Package (Payments and Benefits) Amendment Rules (No. 2) 2020, this extended the payment

to religious practitioners. The Respondent submitted a Media Release from then Treasurer, the

Honourable Josh Frydenberg MP on 24 April 2020, which demonstrated this expansion to

ministers, highlighting his statement that:

[2023] FWC 1650

24

“Changes will allow JobKeeper Payments to be made to religious institutions in respect

of religious practitioners (with the exception of those that are students only), recognising

that many religious practitioners are not ‘employees’ of their religious institutions”.

75

(Emphasis added)

[88] I reject the Applicant’s assertion, noting the relevant Government Media Release. As a

result of this expanded category, JobKeeper payments were then made by the Respondent to

Ministers, but not on the basis of them being characterised as employees.

Indicia – labels and assumptions

[89] The Applicant referred to several cases provided to the parties and submitted that a label

chosen by parties is not determinative of the relationship and should rarely be relied upon to

correctly characterise such.76 He went on to conclude however, ‘if it looks like an employment

contract and it smells like an employment contract, then it probably is an employment

contract.’

77 His submission was that the Respondent’s label of a ‘spiritual’ or ‘covenantal’

relationship was incorrect, and that the label of ‘employee’ was correct. The Applicant’s

submission on this point was confused, in that the labels that appeared on documents he referred

to, were of ‘employee’ but his assertion of the case law suggested that this should not be relied

on as indicative of the status of the relationship.

[90] In the Full Bench case of Timbecon,

78 ground 11 of the appeal, considered ‘labels’ in a

relationship, and found that the first instance decision correctly applied caution in not ascribing

weight to the mere use of the label ‘contractor.’

79 This caution is relevant to Reverend Fihaki’s

circumstances whereby he argued that he was an ‘employee’ due to the receipt of the payslip,

using the labels of ‘employee’ and ‘employer’ and that he received payment of the Job Keeper

benefit. However, the use of these labels and payment of that benefit were persuasively dealt

with by the Respondent (as set out above) to substantiate they were not indicative of an

employment relationship. The entire factual matrix of the circumstances of the parties was

determinative of a spiritual relationship and calling, not the creation of legal rights or

obligations.

[91] Timbecon also examined the assumptions of the parties in relation to their relationship

that the relationship was one of a contractual nature.80 The current circumstances can be

distinguished from that case, given that in the case of Reverend Fihaki, there is no finding that

the Applicant was an employee, that there was no contract (oral or written) and that any of the

regular labels associated with an ‘employee’ or ‘independent contractor’ did not align with the

nature of this ministerial relationship. There is no evidence of the basic requirements of a

contract of employment or service, and no rights and obligations are set out in evidence. All

that the evidence gives rise to is that the Applicant accepted a calling in the capacity of a

minister with some entitlements consistent with the provision for allowing the Minister to

conduct the spiritual teachings, however there was no specific evidence that supported an

employment relationship.

[92] The finding in Knowles, as referred to, was that in the case of ministers, the use of the

word ‘employment’ is often used interchangeably with ‘appointment’ but is not conclusive that

an employment relationship exists between the parties.81 Therefore, in all the circumstances, I

[2023] FWC 1650

25

accept the Respondent’s submission as to the use of the label ‘employee’ over the Applicant’s

assertions and find that it is not conclusive of an employment relationship.

Indicia – payment of stipend vs wages

[93] The Applicant also relied on the payment of a ‘stipend’. The Applicant submitted that

he was paid with a ‘payslip not a stipend slip.’ He argued this was evidence that he was paid a

wage, and in the alternative, that the stipend is only a single component of his overall salary

package, with superannuation and allowances being, he also stated, evidence of the employment

relationship between the parties.82

[94] The Respondent stated that the stipend is not a wage or a salary, but rather a living

allowance paid to the Minister, so he is able to cover his needs while exercising his call to God

and his ministry across the life of the community.83 In making these payments, the church stated

it has several legislative obligations, such as taxation and superannuation, compliance to which

do not constitute an employment relationship.’

84 Further, the payments do not represent

remuneration in the regular manner of an employment relationship.

[95] The Respondent submitted that the payment of a stipend is governed by Regulation 2.7.1

of the UCA Regulations:

“The stipend amount is reviewed annually and it’s reviewed by another committee of

the church called the remuneration and nomination committee. They consider what is

the appropriate stipend for ministers and they make that decision annually. There is no

negotiation, there is no review of contracts, there is no involvement of ministers other

than any other ministers who might sit on that remuneration nomination committee.

They make a determination using some external benchmarks, but they are free to make

that decision.”

85

[96] As outlined by the Respondent, the stipend is set by a Church Community. I accept the

Respondent’s submission that the stipend paid to Reverend Fihaki was a creation of the canon

law and did not form a ‘salary’ or ‘wages’ paid to the Applicant. I accept that though the

Applicant’s payslip refers to an ‘hourly rate’ and a nominal indication of ‘hours worked’ in that

month, I find that these are products of the payroll software and are not representative of how

the stipend amount is actually reached or paid. It is also set out in the Letter of Call that the

stipend amount is an annual amount which is paid monthly, not based on a number of hours

worked.86

[97] Additionally, I agree with the reasoning in Preston that a stipend does not ‘form

consideration for its ministers, rather a method of providing material support for the Minister

to serve God’,

87 and that it is conditional upon the ‘admission into full connexion and

ordination’

88 of the Minister.

Indicia – superannuation and tax

[98] With regard to superannuation and income tax, the Respondent referred to their

‘legislative obligations’ that stem from the payment of a stipend and allowances to the

[2023] FWC 1650

26

Applicant. This included their obligation under the Income Tax Assessment Act 1997 (Cth) to

withhold and remit tax, as well as their obligation to report payments via single touch payroll.

[99] With regard to tax being deducted, the Respondent submitted:

“The church is obligated under the Tax Assessment Act to withhold tax and remit tax to

the ATO, as well as report payments to the ATO via single touch payroll. These

obligations are fulfilled using a payroll software system. In making these payments, the

church must identify the relevant ABN of the entity under which the payments are made.

The ABN is identified on the payslip generated by the payroll software system and on

the payment summary available from the ATO. In using a payroll application to process

payments, the church must work within the configuration restrictions of the system, such

as using a unit for payment (ie a nominal number of hours per month) and the

production of a ‘payslip’ which is issued to the minister.”

89

[100] Further, the Respondent set out the structure of the UCA, with the Church as one arm

and the Property Trust as the other arm. The Respondent conceded that the Applicant was paid

via the legal entity of ‘The Uniting Church in Australia Property Trust (Q.)’ which is a body

corporate pursuant to section 12(a) of the Uniting Church in Australia Act 1977 (Qld).90 They

submitted that the Uniting Church in Australia is made up of several unincorporated entities ,

and therefore these expanded definitions in the Superannuation Guarantee (Administration)

Act 1992 (Cth) (‘SGA’), meant that a body corporate (such as the Property Trust) was required

to make superannuation contributions on behalf of ministers, as employees under that ‘body

corporate’ definition.91 Section 12 of the SGA sets out, for the purposes of the SGA:

12 Interpretation: employee, employer

(1) Subject to this section, in this Act, employee and employer have their ordinary

meaning. However, for the purposes of this Act, subsections (2) to (11):

(a) expand the meaning of those terms; and

(b) make particular provision to avoid doubt as to the status of certain persons.

(2) A person who is entitled to payment for the performance of duties as a member of

the executive body (whether described as the board of directors or otherwise) of a body

corporate is, in relation to those duties, an employee of the body corporate.

(Emphasis added)

[101] I reject the Applicant’s assertion that the payment of superannuation and taxation of the

stipend are evidence of a negotiated ‘salary package’, and therefore indicative of an

employment relationship.

[102] The Letter of Call refers to the ‘Uniting Church Beneficiary Fund’ as the current

superannuation scheme in place for ministers of the Uniting Church and states that this fund is

made up contributions from the ‘congregation.’

92 Further, I note that the Superannuation

Guarantee Administration Act provides an expanded definition of ‘employee’ to apply to

‘members of an executive body’ of a body corporate93 which the UCA Property Trust is,94 and

which the Respondent states payment must be made under. No employment relationship is able

[2023] FWC 1650

27

to be inferred in either case, firstly due to the payment being made by the unincorporated entity

of the ‘congregation’ and secondly due to the expanded definition of ‘employee.’

[103] I accept that tax is a legislative obligation on the Property Trust generated by the

payments. I additionally adopt the reasoning in Parfitt, where Dillon L J stated that compulsory

superannuation and income tax payments of stipends were “based on convenience and

compromise and do not represent any binding decision in principle on the status of ministers.”

95

Indicia – control – direction of duties

[104] With regard to the level of control the Respondent had over the Applicant, it is noted

that there was no position description, duties, regulated weekly hours or span of hours set out

in the Letter of Call. Instead, the Applicant has a large degree of control over when and how he

discharged his ministry and spiritual calling in line with Church teachings. The Respondent

outlined that the Applicant, as part of the calling would ‘be responsible to the Presbytery for

the exercise of [his] ministry’

96 and that his placement was governed by the ‘Code of Ethics

and Ministry Practice for Ministers in the Uniting Church in Australia.’ These matters are

relevant to the issues over which the Applicant states he was dismissed.

[105] Relevantly, the further ministerial case, cited as VT87/343897 determined that the

minister in question in that case was not an employee, referencing the lack of control as a factor

in this determination:

“[the Church] asserted that the effect of the Constitution and Regulations of the Church

was that a Minister settled in a Parish was not an employee of the Church, the Parish

or any of the other bodies established by the Constitution for the government and

administration of the Church’s affairs. Although his stipend was provided by the parish

in which he was settled, the Parish could not direct him as to the work which he was to

perform or how he was to perform his work in the Parish. The Church as such did not

pay him; nor did any other body established by the Constitution other than the Parish.

His duties derived from the Regulations made by the Assembly under the authority of

the Constitution. [the Appellant] did not present any argument that the taxpayer as a

Minister settled in a Parish was in the employment of the Parish or of any other person

or body. I find that he was not.”

98

(Emphasis added)

[106] In the case of Reverend Fihaki, it is noted that the circumstances are analogous to the

above case in that the Respondent submits that the Applicant must comply with the relevant

regulations, but had limited control over how, when and where the Applicant performed those

duties. The Applicant submitted that the Regulations were his ‘job description’ and that if he

acted outside of ‘simply carrying out prescribed responsibilities’ then Ministers could do

absolutely whatever they like based on what God had personally placed in their hearts.99 I accept

the Respondent’s submission on this point that there was little control by the Church over the

Applicant’s day to day duties above and beyond those widely prescribed by the Regulations.

Indicia – control – requirement for blue card

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[107] The Applicant also made reference to the requirement for him to hold a blue card for his

Ministry as being indicative of a direction of the Respondent as his ‘employer.’

100 The

Respondent submitted that the Applicant was required to hold a blue card under the Working

with Children (Risk Management and Screening) Act 2000 (Qld) (the WwC Act). The

Respondent referred to section 9 of WwC Act which defined a ‘religious representative’ as a

person:

“(a) who is a member of—

(i) an organised religion; or

(ii) a religious group even if the group is not part of, or does not consider itself

to be part of, an organized religion; and

(b) who, because of the way the organised religion or religious group operates—

(i) holds a position in the religion or group that is supported by the religion or

group, including financial support, in a way that allows the person—

(A) to devote himself or herself to promoting the religion’s or group’s

objects or values; and

(B) to hold himself or herself out as a representative of the religion or

group; or

(ii) is training to hold a position mentioned in subparagraph (i)”

[108] The Respondent submitted that the Queensland Government provides direction in

relation to religious representatives, specifically:101

  1. “You will need a blue card if you are a religious representative and your work

includes providing services to children as a religious representative or

conducting activities with children as a religious representative. For example,

if you are a religious leader such as a priest, chaplain, minister or rabbi whose

role includes (or may include) providing religious instruction to children or

conducting activities as a religious representative”

102

  1. “A person who represents their church or other religious entity as a religious

representative may apply for a blue card as a business operator instead of as an

employee”.

103

[109] The Respondent submitted that104 references in the WwC Act such as “employment is

regulated employment if … the employee is a religious representative”

105 should not be taken

as an indication of an employment relationship. Such references are used to establish a statutory

framework for working with children. A broad definition of “employment” is taken by the Act

to cover instances where a person has an agreement with another person to carry out work.106

[110] I accept the Respondent’s submission that the direction given to the Applicant was not

a direction of the Church, but in order to be in compliance with legislative requirements and as

such is not indicative of ‘control’ over the Applicant. Further, I accept the reasoning outlined

in VT87/3438 which held that where duties were prescribed by regulations and there was no

direction over which work or how work was to be undertaken, this weighs against a finding that

a Minister is an employee. As set out in the Letter of Call, the Applicant’s duties were found in

the relevant regulations, which also provided for his benefits. Further, though the Applicant

was expected to be in compliance with the Code of Ethics, there was no conclusive evidence

provided by the parties to suggest a degree control over the discharge of his spiritual calling, to

[2023] FWC 1650

29

such an extent as to weigh in favour of an employment relationship, rather than the minister in

his calling tending to his congregation with his teachings.

Indicia – payment of and entitlement to leave

[111] The Applicant was provided with several types of leave during his appointment. With

regard to sick leave, the Applicant was able to access this, however the payment of such was

funded by the congregation, paid to the Property Trust, to be distributed to the Applicant.107

The Applicant was also entitled to annual leave.108 Payment of such was not set out in the Letter

of Call, however it was set out that the Applicant was entitled to 4 weeks, to be taken in

consultation with the Church Council. With regard to long service leave, the Letter of Call set

out that this was again funded by the congregation rather than the Respondent, though paid via

the Property Trust.

[112] Specifically in relation to Long Service Leave, the Respondent, in their legal advice,

referred to the definition of “employee” under the Industrial Relations Act 1990 (Qld) (IR Act)

(and the superseding Act) which provided for a ‘person in any calling whether on wages or

piecework rates.’ They noted that the word “employ” was not defined in the IR Act.

109 The

Respondent also made reference to the By Laws which provide for Long Service Leave for

Ministers.110 Though not expressly stated, the Respondent’s contention appeared to be that in

either case, the provision for and payment of Long Service Leave was not conclusive of an

employment relationship as it was either a legislative obligation or a benefit (funded by the

congregation) distributed by the Trust to Ministers, to enable them to discharge their ministry

during their placements.

[113] As the Respondent has set out in their submissions, the Church is made up of many

unincorporated associations, including individual congregations who are unable to contract

with or make direct payment to the Applicant due to their legal status. As such the Property

Trust makes those payments, when the funds are received, on their behalf. Further, I accept the

Respondent’s submission that the leave entitlements were a product of the Church Regulations

and By Laws and/or the legislative obligations and were part of the material support provided

by the congregation to the Minister to serve God,111 and to exercise his ministry across the life

of the community.

112

[114] With regard to the other ‘allowances’ the Applicant referred to as part of his ‘salary

package,’ including housing allowance, travel allowance and continuing education allowance.

These were also provided to support the Applicant’s exercise of his ministry were comparable

to reimbursement for expenses than renumeration, and therefore not conclusive of an

employment relationship.

[115] As set out above, the aggregate of the indicia when compared to the case law, do not

support a finding that there is an employment relationship, nor that of an independent

contractor.”

 

Extract from Fihaki v Uniting Church In Australia, Qld Synod [2023] FWC 1650 delivered 7 July 2023 per Spencer C