Khan v Oxford City Mosque Society [1998] UKEAT 920_97_2307

EAT
Khan v Oxford City Mosque Society
[1998] UKEAT 920_97_2307 · 1998-02-25

JUDGE H J BYRT QC :

This is an appeal from the Industrial Tribunal sitting in Reading. The decision, promulgated on 17 April, 1997, was on a preliminary point, and by it the Tribunal held that Mr Khan, the applicant, had no contract of employment with the Respondents, and therefore had no basis for progressing his claim for unfair dismissal. This was a majority decision which Mr Khan now appeals.The facts as admitted or found by the Tribunal are as follows:The Respondents, the Central Oxford Mosque, are a Society which is registered with the Charity Commissioners. It serves the Muslim Community in Oxford. Each Mosque operates as a separate independent body, free to conduct its affairs as it sees fit. I has its own constitution which provides for the election of a management committee which is entrusted with managing the affairs of the Society.The Committee is elected by the community as a whole. The community consists of the fully paid-up membership of the Mosque. The Committee is empowered to engage and dismiss a Head Imaam and his deputy. Pursuant to those powers, it invited Mr Khan to come to the United Kingdom in March 1992, and appointed him Head Imaam of the Mosque at Oxford. As the Industrial Tribunal correctly stated, there were two issues arising on the preliminary point: First, was the relationship of the parties to that appointment regulated by a contract; and second, if so, was that contract one for the provision of services or one of employment within the meaning of section 230 of the Employment Rights Act 1996 ?All the documentation in this case is couched in terms strongly suggestive of a contract of employment. In written correspondence with the Immigration Authorities, the Respondents did what they could to facilitate Mr Khan's entry into the UK, referring to him as their employee. Upon his engagement in March 1992, he was offered no written contract but, on 15 March 1993, a year later, he was sent certain written particulars of "the terms of your employment which are required to be given to you under Section 1 Employment Protection Act, 1978".This statement of particulars set out the Head Imaam's duties. He had to lead prayers five times a day, provide coaching in religious education of Oxford's Muslim children, perform marriage and funeral ceremonies of Oxford Muslims, and from time to time advise on Islamic religious matters as required by the Muslim or non-Muslim community. It recorded the fact that his employment commenced on 1 March 1992 and that no employment with a previous employer counted as part of his period of continuous employment. It provided for his remuneration and his holiday entitlement. It mentioned there was no pension scheme available. It stipulated that any grievance relating to "the terms and conditions of his employment should be addressed to the Mosque Committee". Mr Khan was required to give one month's notice "to termination of your employment". He was to have free accommodation. The statement concluded by stating that "the post is to be full-time and permanent".Following upon Mr Khan's appointment, matters did not run smoothly; he was latterly criticised primarily as to his time-keeping and absences without leave. His engagement was terminated by the Management Committee as from 26 May, 1996. The letter of termination is dated 27 May. Its last paragraph reads:
"According to your contract of service, you have been paid up to the 31st May 1996. The termination notice is served."
On 14 August, 1996, Mr Khan lodged his Originating Application. In Box 12, he stated:
"My dismissal was justified by allegations of unauthorised absence and late attendance which I wholly reject and can disprove in detail on the evidence of members of the congregation. It was therefore unfair. It was not made in accordance with the Mosque's established procedure in cases of proposed dismissal and was therefore both unfair and wrongful. It was also wrongful because it was made without adequate prior written notice or adequate pay in lieu of notice. These unlawful actions have severely prejudiced my position as Imaam and Religious Teacher."
The Respondents' Notice of Appearance details Mr Khan's alleged misdemeanours. The accuracy of their account was never determined because of the decision made on the preliminary point. But the pleading describes Mr Khan's employment in this way:

" Employment

1st March 1992.Mr Khan joined the staff of the Mosque which then amounted to two Imaams. Mr Khan was employed under the powers granted to the Committee under para 15.1 of the constitution (COM 1) of the Central Oxford Mosque, and as per contract 'Statement Of Terms Of Employment'. (COM 2)."Thereafter, the Notice sets out the details of a number of verbal and written warnings issued to Mr Khan between May 1994 and December 1995. It was only shortly before the hearing, after they had instructed solicitors to represent them, that the Respondents advanced the case that there was no legally binding contract between the Applicant and themselves. Hence the preliminary point.Other relevant facts found by the Tribunal are set out in paragraph 5 of the extended reasons.Although the "Statement of Terms of Employment" dated 15 March 1993 is only evidence of what the Respondents contend the arrangements agreed with Mr Khan in March 1992 might have been, the Tribunal found as a fact that Mr Khan's duties were as set out in that statement: see paragraph 5 (h). These were elaborated upon in oral evidence as is recorded in sub-paragraphs (i) and (j).The Tribunal found that Mr Khan was not under any close supervision or regulation by the Respondents in the performance of his duties: see sub-paragraph (j). Mr Khan had "no duties whatsoever in connection with the maintenance, repair, cleaning, etc of the fabric of the Mosque": see sub-paragraph (j). We infer from this that the Tribunal were making a finding that he had no secular duties to perform.Mr Khan's remuneration was paid to him subject to the deduction of tax and National Insurance contributions under the PAYE scheme: see sub-paragraph (f):Further,"Any disputes between trustees, Committee Members and/or the Imaam would be resolved between the parties or failing that by a meeting of the community as a whole who would vote on the issue. If the Imaam was dissatisfied with any decision made by the Management Committee, he had the right to take the issue to the community at large for a decision. Neither party envisaged that any such dispute would ordinarily be referred to a Court or Tribunal." [see sub-paragraph k]However, the Tribunal reminded itself, we think correctly, that if the contractual relationship was one of employment, it would not be open to the parties to contract out of the entirety of the employment protection legislation: see paragraph 8.Having found those facts, the Tribunal focussed their attention on the issue whether the parties intended in March 1992 to enter into legal relations so as to create a binding contract, and if so, whether the nature of that contract, was a contract of service.The Tribunal noted the dictum of Lord Templeman in the case of Davies v Presbyterian Church of Wales [1986] ICR 280 at p.289 in which he expressed the view that it was possible for a man to be employed as a servant or as an independent contractor notwithstanding that the duties he had to carry out were exclusively spiritual. The Tribunal took into account the document headed the "Statement of terms of employment" and the consistent reference in documentation to the applicant's "employment" but they observed that the term by which the parties chose to designate the relationship is only one factor to be taken into account in assessing that relationship; it is not conclusive. The assessment, they said, has to be made by balancing all the relevant factors in the case. Having done so, the majority concluded in paragraph 11 that there was no intention to create a legally enforceable relationship. If there was a contract, it was one for services and not of service. By the same process, it would seem, the minority member thought the balancing process pointed to a contract of service.Miss White, who argued the appeal for Mr Khan, submitted that, in considering intention, the majority members had erred in law in regarding the document stating the terms of employment as merely a factor to be taken into account. Where such a document exists, then the question of intention has to be ascertained objectively by a construction of that document. Where the document shows that the parties entered into a relationship of obligations, rights, and entitlements which go both ways, then prima facie , the Court should hold that the parties intended those obligations to be enforceable in a court of law, and not merely voluntary: see Regina v Lord Chancellor's Department, Ex parte Nangle [1991] ICR 743, whilst, in argument, Miss White conceded that the Tribunal should take all other relevant factors into account, she stressed that they should have given pre-eminent importance to the construction of the document, and clearly they had not done that.Further she argued that if the majority members found no intention because Mr Khan's role was solely spiritual, then they erred in this respect because they had failed to take account of what Lord Templeman had said in the case of Davies (supra) .Third, she submitted that, in finding no contract, the majority of the Tribunal had failed to take properly into account the overwhelming evidence that there was a contract. Pro tanto , their decision was perverse.Miss White further submitted that the majority had erred in its alternative finding that, if there was a contract, it was one for services and not of employment, and she so submitted on two grounds: First, they had failed to give any adequate reasons for this conclusion, and in consequence their decision was fundamentally flawed: see Meek v City of Birmingham [1987] IRLR 250 . Second, she says that, having regard to the statement of terms of employment and all the other surrounding factors pointing to a contract of employment, their decision that this was a contract for services was perverse.Miss Gollop, for the Respondents, submitted that the majority members were right in their approach to the assessment of intention. There was no written contract nor any other document which comprehensively and contemporaneously set out all the terms upon which Mr Khan was invited in March 1992 to take up his appointment as Head Imaam. It was therefore incumbent on the Tribunal to take into account the full range of relevant factors when balancing those indicative of a contract and those negativing it. The statement of terms dated March 1993 was not in itself a contractual document; it merely evidenced what might have been the parties' intention in 1992. The extent to which it did so was for the Tribunal to decide, having heard the evidence and having made their findings of fact which supported or contradicted its evidential value.She submitted the relevant factors the Tribunal was entitled to take into account, besides the statement of terms, were the Society's Constitution , the fact that Mr Khan's duties were solely spiritual, the fact that the resolution of any grievance was first to be by agreement with the management committee and then, in the absence of such agreement, on appeal to the community in general meeting, and the finding the Tribunal made that neither party envisaged any such dispute would ordinarily be referred to a court of law or tribunal. There were other peripheral factors they were entitled to consider, attributing to them such weight as they thought fit.Having concluded its balancing exercise, the Tribunal, she said, had to make its overall assessment of the parties' intention and in doing so, they would be making a decision which was mixed law and fact. There was nothing in their approach which suggests that they did other than direct themselves correctly on the law, and accordingly the EAT should not disturb their majority decision on what is essentially reduced to a question of fact, namely that there was no intention to contract.In our judgment, Miss Gollop is right when she says that the statement of terms, incomplete as to its terms, and put together a year after Mr Khan took up his duties, is not of itself a contractual document of any engagement. This therefore is not a case where the Tribunal would have been right to confine itself to construing the statement in order to assess the intent the parties had in mind in March 1992. It is, of course, important evidence of the salient terms of engagement but this Tribunal were right to take into account other evidence, both documentary and what was stated in oral evidence, in order to ascertain that intention.In this respect, the case is distinguishable from the case of Nangle (supra). In that case, the applicant was a Civil Servant claiming judicial review of the Department's decision to discipline him. The issue was whether he had a contract of employment or merely a relationship with the Crown, regulated under its prerogative powers. There were a number of documents which, together, comprised Mr Nangle's appointment. There was a letter of appointment which cross referred to other documents which either were enclosed with the letter or were readily available elsewhere. The Court accepted the Department's submission that the question whether there was an intention to create legal relations had to be ascertained objectively, and where the terms of the relationship are to be derived solely from the documents, its answer depends upon the construction of those documents. In the case we are considering, there was no contractual documentation, contemporaneous with Mr Khan's engagement, the construction of which could determine the nature of the relationship as at that time. Here is a ground on which the case of Nangle (supra) can be distinguished.There are further grounds for saying that the citation of that case is inapposite. In his judgment in that case, Stuart-Smith LJ went out of his way at page 752 B to exclude cases of religious appointments from his comments:
"The relationship of employer and employee, master and servant, ... must of its very nature be one which involves an intention to create legal relations, unless such intention is clearly excluded either expressly or by necessary implication, as it is in the religious appointments cases. ..."
For the above reasons, we do not, on the facts of this case, accept Miss White's first submission. Where, as in this case, there are no documents which can claim solely to comprise the terms of engagement, the Tribunal must do what it can to glean the parties' intention from such other material as is available to it, and thereafter, having attached such weight as it thinks appropriate to that material, make its finding on what is essentially an issue of fact. Where the indications of that material point both ways, that judgment must necessarily involve a difficult, delicate balancing of the evidence. This is the approach long established by the authorities, including those cited to this Industrial Tribunal. These matters lead to Miss White's second point. She submits the Tribunal failed to take into account any other material factors save that which referred to the exclusively spiritual nature of Mr Khan's role; they concluded there was no contract because his functions were solely spiritual or spiritually related.We do not accept that submission. The Tribunal certainly went through the motions in paragraph 10 of their extended reasons of reciting the matters to which Mr White would have had them put in the balance. In paragraph 9, they reminded themselves of Lord Templeman's observations in the case of Davies (supra). In our judgment, there is no ground for supposing that the majority did not give these matters due consideration before deciding that the spiritual nature of Mr Khan's duties was the determining factor.Was the decision of the majority perverse in deciding there was no contract or no contract of employment bearing in mind the substantial evidence to the contrary?In considering this issue, we have found it helpful to remind ourselves of the guidance offered in the judgment of Dillon LJ in the case of President of the Methodist Conference v Parfitt [1984] ICR 176, an authority cited to this Tribunal. At page 183 the learned

Lord Justice said:

"The courts have recognised that it is not practicable to lay down a hard and fast list of what is required to constitute a contract of service. There are too many variants. None the less the Courts have repeatedly recognised what is and what is not a contract of service and I have no hesitation in concluding that the relationship between a church and a minister of religion is not apt, in the absence of clear indications of a contrary intention in the document, to be regulated by a contract of service."
That guidance is not inconsistent with what Lord Templeman said in Davies (supra). The opinion expressed in the latter case contained no criticism of the above view expressed by Dillon LJ. Further, that guidance was cited with approval by Neill LJ in Santokh Singh v Guru Nanak Gurdwara [1990] ICR 309.In a case such as Mr Khan's, the Tribunal is therefore bidden to consider the totality of the evidence in order to ascertain whether it signifies a clear intention to agree a contract of service. We are at a disadvantage in attempting to replicate such a review because we do not have the Chairman's notes of evidence. It is however apparent that the Tribunal took fully into account that documentary evidence in which the terminology pointed to such a contract but they went on to say that the terms in which the parties choose to designate their relationship is only one of the factors they have to consider; it is not conclusive. This must be right, especially so where the parties, after the event, are seeking to spell out their relationship in terms which do not seem to take into account the nuances of the well-nigh unique relationship which exists between a religious community and its minister. The Tribunal clearly attached significance, as their findings of fact show, to the fact that the Imaam's appeal from a decision of the management committee lay to the fully paid-up membership of the Mosque, and further to the fact that neither party envisaged any such dispute would ordinarily be referred to a Court or Tribunal. After such a careful approach to their task, is there ground for saying that the Tribunal below came to a decision on the facts which no reasonable Tribunal could have come to? In our judgment, there is no ground for so saying, and accordingly, we reject Miss White's submission that the Tribunal's finding was perverse.The last of Miss White's submissions challenged the Industrial Tribunal's alternative decision, namely, that if there was a contract, it was one for services and not of employment. We think that there is substance in this submission since the Tribunal give no reasons for that conclusion. It is neither clear what findings of fact led to it nor is the law they applied. However, this alternative decision is in fact hypothetical in view of their substantive determination, and we do not think it appropriate that we should give a ruling upon it. This appeal must be based on the Tribunal's majority ruling that there was no intention to create a legal relationship.For the reasons we have given, we can find no grounds upon which we can disturb the Tribunal's decision, and accordingly the appeal must be dismissed.