A DISPUTE between the Revd Mark Sharpe and the Bishop and diocese of Worcester must restart its long journey through the courts after a ruling that an employment tribunal had erred in deciding that clerics were office-holders. The judge declined, however, to rule on whether they should be awarded employee status.

The Revd Mark Sharpe says that the bishop and the diocese failed to protect him from parishioners who poisoned his dog and slashed his car tyres, and other "detriments" he suffered as a result of "public-interest disclosures" he made about them. He resigned his post in September 2009, and lodged two claims with the Employment Tribunal in Birmingham.

The Bishop and diocese argued that Mr Sharpe was an office-holder rather than an employee or a worker as defined in employment law, and was therefore was unable to bring a claim to an employment tribunal. At a preliminary hearing in November 2011, Judge McCarry agreed, saying that the conditions required under an employment contract were missing from the relationship between an incumbent and his bishop or diocese.

Mr Sharpe, supported by the Unite union, appealed. Legal arguments were rehearsed during a two-day hearing in November 2012 before Mrs Justice Cox. That case was stayed, twice, after the hearing, to allow the parties to make representations about two cases decided by the UK Supreme Court, including that of the President of the Methodist Conference v. Preston, which ruled that a minister was not an employee of the Methodist Church (News, 17 May 2013).

Judgment on Mr Sharpe's appeal was finally handed down on Thursday of last week, more than a year after the appeal hearing.

Mrs Justice Cox ruled that the judge in the Birmingham Employment Tribunal had "failed to apply binding authority", and did not "carry out the full analysis" set down by the Supreme Court.

She said that "the conclusion that [Mr Sharpe's] relationship with the Bishop was defined exclusively by ecclesiastical law led the judge into legal error in a number of other respects in his analysis as to the existence of a contract."

One of these was the area of "control and discipline", one of the tests for employment status. The judge referred to Canon C18(7), which provides that "every bishop has the power to correct and punish the disobedient or criminal within his diocese"; and to section 1 of the Clergy Discipline Measure (CDM), which says that anybody carrying out functions under the CDM will have "due regard to the role . . . of the bishop or archbishop, who, by virtue of his office and consecration, is required to administer discipline".

The employment tribunal had heard that such power was largely symbolic, and that a bishop had very little power to control or discipline priests. But Mrs Justice Cox ruled: "As a matter of law, how often the bishop may use these powers in practice, and how many complaints are referred to the Bishop's Disciplinary Tribunal each year, are not determinative of the legal relationship with the claimant, and whether that relationship is contractual.

"What matters is the existence of residuary powers of control and discipline, not the extent or frequency of their application in practice."

Mrs Justice Cox overturned the decision of the Birmingham tribunal, but did not rule on the key question of Mr Sharpe's employment status. Instead she remitted the case back to the tribunal "for a fresh hearing in accordance with the legal principles" set out in her 74-page judgment.

Unite has long argued that clerics should be treated as employees, with full access to employment rights and employment tribunals.

Under the Ecclesiastical Offices (Terms of Service) Measure 2009 and the associated Regulations, clergy are now appointed to posts under "common tenure" rather than the older system of the freehold. The Measure grants clergy certain employment rights, including the right to have cases for unfair dismissal heard by employment tribunals, but states: "Nothing in this Measure shall be taken as creating a relationship of employer and employee between an office holder and any other person or body."

Given the importance that both Unite and the C of E place on the employment status of clergy, the matter is expected at some point to reach the higher courts, whatever decision the employment tribunal reaches when it considers the matter afresh next year. The substance of Mr Sharpe's complaint against the diocese will not be considered until his employment status is resolved.

"This decision has come as an immense relief," Mr Sharpe said afterwards. "I never intended to set out on this journey, but I was forced down this route in order to seek recompense for my family and I. I feel vindicated by the stand that Unite has taken on my behalf, and hope to move to a swift resolution of the outstanding issues with the Church, so that I can move forward to the next chapter of my life."

Rachael Maskell from Unite called for a "constructive and open dialogue" with the C of E. The diocese of Worcester has not commented on the judgment.