Historically, Ministers of Religion, including pastors, were not recognised as employees. Instead, Ministers were seen as having been ‘called’ by God to their role, thereby sitting outside the employer-employee relationship. This meant that the normal employment rules did not apply.
Over time this has changed however, and it is now possible that a pastor may be considered an employee, depending on the ‘true nature’ of the working relationship between the pastor and the church.
This was seen in the recent 2025 Employment Court decision of Bread of Life Christian Church in Auckland v Chen, where the pastor was engaged by a Church charitable trust board, an arrangement that is not uncommon with some church denominations. When he was originally engaged, there was no written agreement but subsequently a fixed-term agreement was signed, alongside a “Call” document, acknowledging his call to ministry. The pastor was paid a salary with PAYE deducted.
When a dispute arose, following termination of the pastor’s engagement, the pastor claimed he was an employee. The trust board said that the pastor’s role was a spiritual contract or calling with the Church, not the trust board, and any relationship between the trust board and the pastor was simply functional for the purpose of paying his salary and deducting PAYE.
The pastor raised a personal grievance and filed a claim in the Employment Relations Authority. The Authority found that the pastor was an employee, and this was upheld by the Employment Court on appeal.
The Court said:
- Each church has different structure. No assumption can or should be made that the legal structure of any given church or community is necessarily similar to the legal structure of any other church. In other words, the focus should be on the particular rules and practices of the specific church and the arrangements between that church and its pastor in deciding if a pastor is an employee or not.
- There is no presumption against a minister of religion intending to be legally bound, such as via an employment contract. The facts of each case will have to be looked at to decide if the parties did intend to be legally bound or not.
- The spiritual nature of a role is important but it is not determinative when deciding if a pastor is in fact an employee. Each case still needs to be considered “on its merits with a focus on the real nature of the relationship between the parties.”
The Court also identified some key factors that indicated an employment relationship which are very useful for all Churches to be aware of, as it could affect the interpretation in their context:
- The agreement signed between the parties was consistent with an intent to be legally bound. It had all the ‘hallmarks’ of a contract and was described elsewhere as a contract.
- The call agreement did not exclude the pastor from being an employee and there was nothing in it which indicated that the parties did not intend to be legally bound by the other agreement.
- The agreement was consistent with aspects of employment law – with the salary based on minimum wage and leave provisions reflecting the requirements of the Holidays Act 2003.
- Kiwisaver was deducted from the pastor’s salary, which was more indicative of an employment relationship. The Court accepted however that PAYE deductions occur whether or not a pastor is an employee.
- While the pastor had some freedom in his work, the Trust had the power under the agreement to exercise control over him by undertaking performance reviews, reviewing and changing his salary, taking disciplinary action, dismissing him and making decisions about whether to renew his contract or not.
- The pastor was required under the agreement to work 40 hours a week and was required to carry out specific tasks on specific days. This further indicated considerable control over the pastor.
- The pastor was clearly fully integrated into the life of the church – he was the face of the church to the outside world.
- The pastor was clearly not in business on his own account so could not be an independent contractor. He was paid for time worked, not for task completion. He did not bear any risk of loss and had no way of making a profit from any task he carried out, including any work for other churches. While he was not prohibited from delegating his work to others, it was clear he could not do so. Though the church engaged other pastors to preach on occasion, the pastor did not personally subcontract his role to others/pay them to do so.
- Finally, the fact he was entitled to repayment of expenses or reimbursement for attending theological courses was consistent with being an employee rather than being in business on his own account.
As every situation will be influenced by the facts relevant to that situation, we are very happy to assist if you are looking to engage a pastor/minister or if you have any questions about an existing engagement.
We also have many free resources available for Church and Community groups such as our Churches Legal Handbook and Charities Health checks – you can find those, as well as videos, articles, and more here.
