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Contracts for paid parish workers

There can be many types of paid workers involved in parish life, including PCC employees and individuals who can help out on a casual basis.

This guidance provides details about which paperwork you should have in place.

Key facts

  • First of all it is important to establish the correct status of your worker
  • For further guidance on this please visit the Employment Status article
  • Then, you need to ensure that the correct paperwork has been issued and signed

Typically, the types of contracts that might be needed are:

Key facts about contracts

Contracts of employment

A contract of employment is an agreement between an employer and employee which is legally binding. The term is defined by the Employment Rights Act 1996 as a contract of service or apprenticeship.

Any employee who has been employed for one month or more has the statutory right to a written statement of particulars of employment.

Employment contracts consist of a mixture of Express and Implied terms:

  • Express terms: those that are actually stated in writing and which must meet minimum legal standards in many areas, such as the right to paid holidays and the right to rest breaks. As of 25 May 2018 you need to ensure your employment contract is GDPR compliant.
  • Implied terms: those that are not necessarily written down but still apply. For example, a duty of mutual trust and confidence between the employer and employee.

Legally, there are minimum terms that need to either be included in a basic contract or another document. As a parish you should plan in advance as to what terms you plan to offer your employee. If you employ more than one person, these terms should be kept as consistent as possible.

Organists are slightly more complicated as they are also covered under Canon Law. Further information is provided later on.

What information do we need in order to draft an employment contract?

What information do we need in order to draft an employment contract?

Fixed term contracts of employment

Why use a fixed-term contract?

You may want to use a fixed-term contract for a number of different reasons, including:

  • To cover maternity leave
  • To cover long-term sick leave
  • Where there is a specific project where particular skills are required

Some things to remember

Fixed-term employees have the right not to be treated any less favourably than comparable permanent employees.  Therefore they are entitled to the same equivalent benefits. Normally the only difference in the written contract would be in relation to an end date (and any notice required etc) and perhaps a pro-rata holiday allowance and salary.

It is important that fixed term contracts explain whether notice to end the contract is required or not and whether it can be ended because of a specific event, for example, because of a withdrawal of funding from an outside party.

Where a fixed-term employee’s contract is terminated, this amounts to a statutory dismissal, even if this is at the expiry of the fixed term.  Therefore, where they have more than 2 years’ employment, they will have the right to claim unfair dismissal. This means that a standard redundancy procedure should be followed.

Where an employee has been continuously employed on successive fixed-term contracts for four years or more, he or she will automatically achieve permanent status, unless there is an objective reason that justifies a further renewal for a fixed term (eg funding or the fixed term nature of the project).

Casual worker contracts

There have been many concerns raised in recent years in relation to casual worker (zero hours) contracts, in particularly where some employers have been using them unfairly.

However, if used properly and fairly by ensuring that both parties have the ability to reject work and also allowing individuals to work elsewhere when they are not doing work for you, they can be a useful tool.

Zero hours contracts are good when services are required on an ad-hoc and casual basis.  There is no obligation (whether actual or implied) on the part of the organisation to provide an individual with work and the individual is not under any obligation to accept any work offered.

The individual would not be an employee of the organisation, just a worker. This means that they would not be automatically entitled to certain benefits such as sick pay.  They would receive holiday entitlement based on the hours they work.

The individual is paid only for hours actually worked and there will be deductions of income tax, in the same way as if they were an employee, but this is for administrative convenience only.

Contracts for services

An effective contract of self-employment is not an employment contract at all, the person is in fact an independent contractor and should not be referred to as an employee or worker.  You should always provide a written contract for services to ensure clarity of intent.

We recommend that you ensure the following is in place at the point of signing:

  • Commencement date and duration of agreement-clear parameters should be given
  • Purpose of the agreement- a scope of the work required
  • Fees- is it a one off fee or hourly?
  • The ability to provide a substitute in the event that the individual is not available
  • Confidentiality and data protection rights
  • Publication of material- who owns the rights? Normally this would be the PCC
  • Insurance and liability- the individual should have their own public liability insurance
  • Responsibility for their own tax and NI plus confirmation of their registration with HMRC.
  • Termination clause

Try to avoid employment phrases such as ‘line management’, ‘salary’ or ‘Job Description’.

Remember: The HMRC may want to look at both the written contract of services and your working relationship with the individual. It is therefore necessary to ensure that regular reviews take place so that the documentation reflects the true situation.

Organists: employed or self-employed?

It is recommended that organists are employed by the PCC.  The appointment of Organists and Directors of Music is covered by Canon Law (Canon B20), contract law and, as appropriate, employment law.

The status of the working relationship between the Organist and Parish can usually be determined using the ‘Employment Status Indicators’.  In most cases, as there is generally a high degree of mutuality and control, you will find that the organist is an employee of the PCC.

In terms of the remuneration, there has been a tradition of describing payment to the Organist as an honorarium. However a true honorarium is a ‘one-off’ payment after the event to say thank you to someone, it is not usually pre-determined.  Therefore, paying a regular sum of money each week or month (even where it is topped up occasionally with separate payments for weddings, funerals etc.) is likely to be regarded as a ‘salary’.

Recent employment tribunal case law (2008 onwards) suggests that tribunals are of the mind that most if not all organists are employees; even if the parties have explicitly agreed at the beginning of the working relationship that it is one of self-employment.

FAQs

I would like to employ a member of our PCC to do some book keeping for a few hours each week. Is this ok?

We would always recommend that parishes think carefully before employing a trustee or even someone who worships in their congregation. Whilst it is likely the employment would work well, we do often hear of situations where it isn’t working which can mean there is not only the employment relationship to rectify but it also creates issues pastorally.

The Charity Commission does have guidelines relating to employing Trustees. The PCC’s governing documents (The Church Representation Rules and The Parochial Church Councils (Powers) Measure 1956) do not normally allow for trustees to be paid, so the PCC would need to apply to the Charity Commission for permission before employing the individual.

A member of staff has been on a fixed-term contract for 3 years and it is coming to an end in two months’ time, are they entitled to a redundancy payment?

The ending of a fixed-term contract counts as a statutory dismissal in law and as the individual has more than two years’ service they are also protected under the unfair dismissal legislation. Therefore, we would recommend that you follow a standard fair dismissal/redundancy procedure for the position, which will include entitlement to a statutory payment if the person is made redundant. Further details in relation to redundancy can be found on the ACAS website.

A member of staff has resigned but does not want to give their full contractual notice, can we insist that they do so?

The duty to give notice is part of a contract of employment. If your employee doesn’t give the right notice then that would be a breach of their contract. This can occur if the contract requires notice to be given in writing but it was only given verbally or for example, if not enough notice (or none at all) is given. The practical response would be to sit down with the individual and try to negotiate with them. A claim in the courts for breach of contract would cost the parish time and money, so trying to settle the issue informally would be the best solution.

Resources

FileAction
Template - Contract of Employment - including fixed term (GDPR Compliant)  Download  
Template - Self Employed Agreement - Contract for Services (GDPR Compliant)  Download  
Template - Casual Worker Bank Agreement - zero hours (GDPR Compliant)  Download  

 


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