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Employment Contracts and Spiritual Appointments

Engaging Pastors with Employment Contracts and Spiritual Appointments

There have traditionally been two alternative approaches to engaging pastors by local churches

  • Employment Contracts (EC).
  • Spiritual Appointments (SA).

These are very different approaches, having both advantages and disadvantages, and each having their own unique challenges.

Recent changes in the Fair Work Employment Legislation, has led QB has undertaken a thorough review of these approaches to engaging pastoral staff.  With the changes now in force, it is clear that there are serious implications for both approaches and for most of our churches, there is work that must be done as a result.

It is important for church leadership teams (especially administrators, treasurers, and pastors) to understand each approach and to make a decision about which approach is preferred for their pastoral staff and be aware of the implications for other staff which may be on employment contracts.

Below is some information for churches that QB prepared to help churches understand the recent changes and make the necessary changes.

Most Recent Advice to Note when reading the information presented below.

Fair Work Advice 5th December 2023:  which advised that there are additional exceptions to the limitations on fixed term contracts, specifically to positions funded by philanthropic entities or testamentary gift or contribution.  This exception being …

The limitations don’t apply to these contracts entered into on or after 6 December 2023 and before 1 July 2024 where:

  • the funding is provided either:
    • by a philanthropic entity registered under the Australian Charities and Not-for-profits Commission Act 2012, or
    • as a testamentary gift or contribution to a philanthropic entity for a charitable purpose (within the meaning of the Charities Act 2013), and
  • the employer or person who entered into the contract with the employee is not an associated entity of the philanthropic entity.
Read Fair Work notice at : Additional Fixed term Contract Exceptions URL View
Read ACNC full notice at : New rules to limit the use of fixed terms contracts | ACNC   URL View
Read the Fair Work Amendment at : Fair Work Amendment (Fixed Term Contracts) (F2023L01545) URL View

This provides a short extension for churches to continue to use fixed term contracts until 1 July 2024.

Fair Work Advice 24th November 2023:  Fair Work updated their website to clarify that

The limitations don’t apply to fixed term contracts entered into before 6 December 2023. However, fixed term contracts entered into before 6 December must be considered when applying the consecutive contracts limitation for a new fixed term contract that is entered into on or after 6 December 2023.

Read Fair Work notice at : Additional Fixed Term Contract Exceptions URL View

This provides clarity that any existing contract established before 6th December 2023 will remain in force and continue to run its course till any agreed completion date.  Any extension or renewal after this point will be subject to the new legislation.

Exploring the differences between these two approaches (ECs and SAs)

Several resources have been developed to help churches and pastors understand the differences between ECs and SAs including:

 

Spiritual Appointments & Employment Contracts Guide PDF Download
Implications of the Upcoming Fair Work Changes - a summary document PDF Download

An information session was held on 23 October 2023 to further explore these two approaches. Resources from this session are listed below.

The recording of this information session URL View
Powerpoint Slides shared during this session PDF Download
Frequently Asked Question and Answersheet about the information so far PDF Download

Actions related to Employment Contracts (Pastors & Other Staff)

If churches have fixed-term employment contracts in place, they will need to

  • seek to advise their congregations about the fact that any extension or renewal of these contracts after 1 July 2024 where the total tenure exceeds 2 years, will be considered permanent employees.
  • review their constitution and remove any clauses that refer to any fixed-term contracts, and
  • ensure they have the appropriate policies in place to manage their employees.

A suite of documents has been drafted to help churches in this regard including:

New Employment Contract Template for QB Pastoral appointments DOCX Download
Letter of Offer Template for ECs DOCX Download

Where to find help managing staff and access support from the Fair Work Ombudsman:

Employment Information Sheet PDF Download
Performance Management Factsheet PDF Download

 

The following two documents are updated so that these documents are equally relevant for an EC or SA approach:

Updated Draft QB Remuneration and Stipend Guidelines PDF Download
Draft Local QB Church Constitution Template DOCX Download

A set of Role Description templates have also been developed for Employment of Pastors. These can be downloaded from our QB website:

Role Description Templates

 

Actions related to Spiritual Appointments (Pastors only)

If churches are seeking to adopt spiritual appointments for their pastors, there is a critical need to ensure that the documents you have in place to facilitate this are up to date and that there is consistency across these. Churches will therefore need to

  • ensure their own documents are up to date and potentially reissue a new spiritual appointment document in-line with the most recent legal advice.
  • conduct a review of their constitution to remove any clauses that seek to infer employment contracts and ensure that the intent for spiritual appointments is clearly articulated.

The nature of Spiritual Appointments is that they can only be effectively applied to Pastoral Roles and so QB recommends that SAs only be used for Pastoral Appointments (for Senior Pastors, Solo Pastors or Associate Pastors). All other staff roles (including Ministry Workers) are better handled through Employment Contracts at this time.

A suite of documents has been drafted to help churches understand and implement SAs if they choose to. These include:

New Spiritual Appointment Template for QB Pastoral appointments DOCX Download
A Letter of Offer Template for SAs DOCX Download
QB Registration and Ordination Guidelines (update includes some expanded descriptions of the pastoral role) PDF Download

The following two documents are updated so that these documents are equally relevant for an EC or SA approach:

Updated Draft QB Remuneration and Stipend Guidelines PDF Download
Draft Local QB Church Constitution Template DOCX Download