A Methodist minister is not an "employee" of the Church, the Supreme Court has ruled by a majority of four to one. He or she is not, therefore, entitled to bring a claim against the Church for damages for unfair dismissal.

In a judgment released on Wednesday, the Supreme Court ruled that the rights and duties of Methodist ministers arise entirely from their status in the constitution of the Methodist Church. It is a vocation by which candidates submit themselves to the discipline of the Church for life.

Haley Anne Preston (formerly Moore) was ordained as a minister of the Methodist Church in 2003, after a period as a probationer minister. In 2006 she was appointed Superintendent Minister of the Redruth circuit in Cornwall. It was agreed that she would receive a stipend, a manse, and a pension, that she would pay tax under Schedule E, and that she would be entitled to a pension.

In June 2009, she submitted a letter of resignation, and in September she commenced proceedings in the employment tribunal, alleging unfair constructive dismissal.

Under the Employment Rights Act 1996 only an employee has the right not to be unfairly dismissed. Section 230 of that Act defines an employee as "an individual who has entered into or works under . . . a contract of employment". The Employment Tribunal ruled that Ms Preston was not an employee. The Employment Appeal Tribunal ruled that she was, and the Court of Appeal agreed.

Lord Sumption, with whom Lord Hope of Craighead, Lord Wilson, and Lord Carnwath agreed, said that the question whether a minister of religion served under a contract of employment could no longer be answered simply by classifying the minister's occupation by type: office or employment, spiritual or secular. Nor could it be answered by reference to any presumption against the contractual character of the service of ministers of religion generally. The primary considerations were the manner in which the minister was engaged, and the character of the rules or terms governing his service.

Methodist ministers have no written contract of employment. Their relationship with the Church is governed by its constitution, which is contained in the Deed of Union, the standing orders of the Methodist Conference, and by any specific arrangements which were made with a particular minister.

The Deed of Union, which dates from 1932, states: "Christ's ministers in the Church are stewards in the household of God and shepherds of his flock. Some are called and ordained to this sole occupation and have a principal and directing part in these great duties but they hold no priesthood differing in kind from that which is common to all the Lord's people and they have no exclusive title to the preaching of the gospel or the care of souls."

To become a minister, a candidate must first obtain the judgment of the Ministerial Session that he or she was fit to be admitted into "full connexion" and ordination. The Representative Session must then resolve that he or she was to be admitted and ordained.

Lord Sumption said that the manner in which a minister was engaged was incapable of being analysed in terms of contractual formation. Neither the admission of a minister to a full connexion nor his or her ordination were contracts in themselves.

The stipend and manse were due to the minister by virtue only of his or her admission into full connexion and ordination. While in full connexion, those benefits continued, even in the event of sickness or injury unless he or she was given leave of absence or retired.

The minister disciplinary scheme set out in the Deed of Union and the standing orders was the same for all members of the Church, whether ministers or lay members. The relationship between the minister and the Church was not terminable except by the decision of the Conference or its stationing committee or a disciplinary committee. There was no unilateral right to resign, even on notice.

In all those circumstances, Lord Sumption concluded, the ministry described was a vocation by which candidates submitted themselves to the discipline of the Church for life. Unless some special arrangement was made with a particular minister, the rights and duties of ministers arose entirely from their status in the constitution of the Church, and not from any contract. Ms Preston was serving as a minister at Redruth pursuant to the lifelong relationship into which she had entered when she was ordained.

Lord Hope, agreeing, said that the court could not ignore the fact that, because of the way the Methodist Church organised its own affairs, the basis for Ms Preston's rights and duties was to be found in the constitutional provisions of the Church, and not in any arrangement of the kind that could be said to amount to a contract.

Baroness Hale disagreed with the majority, and said that it would be odd if ministers who were not paid their stipend or were evicted from the manse could not rely on their terms of appointment to enforce the payment or regain possession. Everything about the arrangement between the minister and the Church looked contractual, Lady Hale said. It was a specific arrangement for a particular post, at a particular time, with a particular manse and a particular stipend, and with a particular set of responsibilities.

The Supreme Court reversed the decision of the Court of Appeal, and reinstated the decision of the Employment Tribunal. It follows that Ms Preston will not be able to bring a claim for unfair dismissal against the President of the Methodist Conference.