"Church Management - PDF"
CHURCH MANAGEMENT GUIDELINES For Staff and Boards 2006 Fully revised January 2006 (Remuneration range revised July 2008) INTRODUCTION These guidelines have been compiled by the Churches of Christ Association in WA as the first step in an evolving document that is designed to help member Churches to establish a sound framework of management. Many of the issues covered are subject to legal impositions from State and Federal authorities. As good stewards, we are all obliged to understand the complexities of the environment in which we now operate. We can no longer afford to think that because of the nature of our work, we are somehow exempt from secular litigation! The guidelines are compiled using the best available information and will be updated and expanded at regular intervals. For this reason, the retention of an electronic master copy at each church is highly recommended. Amendments will be issued electronically whenever possible to save time and paper resources! They will also be posted on our website. References will be provided to external sources of information whenever possible. Enquiries on any items are welcome – but it must be emphasized that on some issues churches may need to seek professional and / or legal advice. The administration of most churches lies in the hands of committed volunteers, although this will change as the size of the average church increases. Our thanks to everyone who has contributed in some way to this project that will hopefully be helpful to our current and emerging churches. Management should enable churches to become better churches – not bureaucratic institutions! Good ideas and suggestions for this document are warmly invited – please email or send to the Association office. 08 9471 8500 Sue.Stride@cocwa.asn.au 2 CONTENTS WHAT CAN I FIND HERE? The Guide comprises several sections containing information on different aspects of Church organization: SECTION 1 – STRUCTURE AND GOVERNANCE............................................ 7 WHY HAVE A STRUCTURE? 7 THE BASIC COMPONENTS OF THE STRUCTURE 8 A SUGGESTED BASIC ORGANISATIONAL STRUCTURE 9 SECTION 2 - MAIN DOCUMENTATION .......................................................... 13 MAIN FRAMEWORK FOR CHURCH OPERATIONS 13 CONSTITUTIONS AND INCORPORATION 14 SECTION 3 – STRATEGIC PLANNING........................................................... 19 WHAT AND WHY? 19 SECTION 4- STAFF ISSUES ........................................................................... 23 STAFF STRUCTURE 24 RECRUITING – PASTORS 24 SECTION 4A – MINISTERS’ EMPLOYMENT ISSUES.................................... 29 HR ISSUES FOR BOARDS AND MANAGERS 29 TERMS AND CONDITIONS OF EMPLOYMENT 31 SECTION 5 – FINANCES................................................................................. 39 MINISTERS’ SALARY ADMINISTRATION 39 REMUNERATION PACKAGE 39 The Appendices contain a range of useful documents. 3 4 6 Section 1 – Structure and Governance WHY HAVE A STRUCTURE? A basic management structure is essential in any organization once it reaches a size where it is more than just a group of people meeting together. It is simply a framework which facilitates some important things: Determining agreed Purpose and Direction Communication Accountability Authority Responsibility The management structure does not have to be complex. As a church grows however, better processes and systems are needed to keep information and decisions flowing. The structure can and should change to meet changing needs of the church. It is vital that this aspect of the church is reviewed and overhauled as a church grows. It is important that everyone in the church knows the basic structure and also has a detailed understanding of the area that they are working in. Once structure is established it will make it easier to produce important documents like a constitution) or job descriptions. A simple brochure that outlines “how things work” is a valuable tool to put in the hands of new and existing staff and church members. 7 THE BASIC COMPONENTS OF THE STRUCTURE Governance is the process by Leadership is a which an elected complex issue, Management is body governs an but in this the process of organization on context it is deciding HOW behalf of its about deciding to achieve the members. In a WHAT gets done desired church, like many in the church – outcomes and other bodies, this setting direction, then is done by a small goals and coordinating group of trusted inspiring others. the resources individuals – In the Church to get the work usually referred this is the job of done. This is to as a Board – or the Board and the job of staff in modern the Minister and – paid or parlance a forms part of voluntary. Leadership Team. their important relationship. It is essential that these three elements are understood to be different and are the responsibility of different parts of the organization. If they become confused and overlap the result is at best inefficiency, at worst chaos and conflict! 8 A SUGGESTED BASIC ORGANISATIONAL STRUCTURE This all translates into a simplified structure as follows: appoints who do the work to achieve the church’s goals engages a and report back to the Board. through the who leads and manages This simple structure can be expanded in many directions but it contains the basic elements which: • separate the Board (eldership) responsibilities from the management functions. • show the pastor being accountable to the Board whilst other staff (if applicable) are accountable to the pastor. The Board and Minister exercise LEADERSHIP and determine policy. The Minister, staff and ministry team leaders exercise MANAGEMENT by implementing policy. 9 10 11 12 Section 2 - Main Documentation MAIN FRAMEWORK FOR CHURCH OPERATIONS The Constitution The strategic Policies define is a fundamental plan sets out the the Board’s document which broad Vision and views and sets out the Mission of the requirements in basic operating Church and then many areas of parameters of gives broad operations. the church. It brush strategies They set limits addresses to accomplish on staff activity, issues such as the major goals. state how the how the Board is It is the basis for church will elected, the deciding whether govern itself minister progress is being and allow staff appointed and made and guides to make meetings and the staff and decisions. voting Board in conducted .It resource should not be allocation. overly detailed! This basic suite of documents provides the main framework for the church’s operations. Policies should be reviewed regularly and always when changes are needed, the Strategic Plan should be reviewed every 3 years and the constitution at 5 year intervals. 13 CONSTITUTIONS AND INCORPORATION A small group of people, meeting as believers, may be able to operate on very informal structures, but when a church reaches the stage of hiring a pastor it has become, in legal and business terms, a significant entity in its own right. At this point some form of structure becomes essential to give the church the framework for effective growth. CONSTITUTIONS The constitution provides a means of regulating the management, accountability, and in some senses the behaviour, of the church. It will specify how the church is led and managed and will therefore describe the systems outlined in Section 1. It will state how decisions are made, how staff are hired, when meetings are called and also broad descriptions of lines of accountability and authority. Compiling a constitution is an arduous task and wording is important – lack of clarity can lead to great confusion long after authors leave the scene! Many models are available to assist in this task and there is little point in “reinventing the wheel”. The core components of a constitution are contained in a model available from the Ministry of Fair Trading in WA. A complete sample constitution is available from the Association offices if required, and staff are able to offer advice on this subject. It is always worth showing the final draft to an external proofreader, as small mistakes can often creep into such documents… Notes: • If the document is complex, due to property or other issues, it is wise to have it checked by a lawyer prior to adopting it formally. • Avoid the temptation to prescribe every process or provide detailed instructions – these inhibit progress, restrict creativity and lead to technical disputes over interpretation. • It is useful to keep notes of the drafting process to assist in interpretation if future disputes arise on the meaning of specific Items. • Constitutions, like structures, need to be reviewed periodically – at least every 5 years and changed if necessary to reflect new needs. It should NOT be a document that impedes innovation or growth! 14 INCORPORATION This is an issue that has not been well understood, but in principle it is prudent for any non-profit organisation that is operating as an employer and as a business entity (for Taxation purposes or otherwise) to incorporate. A clear explanation of the issues involved are contained on the website of the WA Department of Local Government and Regional development (www.communitywise.wa.gov.au). The Association has resources available on this topic including a video of a 2003 seminar. Incorporation establishes a separate entity, apart from the organisation’s members and officers, which can be dealt with at law. The advantages of incorporation are: • Formal recognition as a legal entity; • Perpetual succession – independent of membership changes; • Members acting in good faith have some protection from legal action; • The organization may enter into contracts and hold property; and • Have some trading advantages – e.g. it can deal directly with funding bodies. On the grounds that most churches are now operating in a complex administrative and legal environment, it is prudent to carefully consider the advantages of incorporation to offer some protection to individual leaders. (It is also important to consider insurance protection for leaders.) Incorporation of an individual church does not affect its relationship or standing with the WA Association, which is itself incorporated. It cannot be assumed that an unincorporated church gains any protection from the incorporation of the Association in the event of any litigation. The process of incorporating is fairly straightforward, provided that some basic items are covered in the Constitution and a simple series of actions is undertaken. Incorporation kits are available from: Ministry of Fair Trading, 219 St Georges Tce, Perth WA 6000. 15 The following items must be included in the constitution of a body that applies for Incorporation in WA: 1. The name of the incorporated association. 2. The objects or purposes of the incorporated association, including a provision in, or substantially in, the following terms. The property and income of the association shall be applied solely towards the promotion of the objects or purposes of the association and no part of that properly or income may be paid or otherwise distributed, directly or indirectly, to members of the association, except in good faith in the promotion of those objects or purposes. 3. The qualifications (if any) for membership of the incorporated association. 4. The register of members of the incorporated association. 5. The entrance fees, subscriptions and other amounts (if any) to be paid by members of the incorporated association. 6. The name, constitution, membership and powers of the committee or other body having the management of the incorporated association (in this Item referred to as “the committee”) and provision for the: (a) election or appointment of members of the committee; (b) terms of office of members of the committee; (c) grounds on which, or reasons for which, the office of a member of the committee shall become vacant; (d) filling of casual vacancies occurring on the committee; (e) the quorum and procedure at meetings of the committee. 7. The quorum and procedure at general meetings of members of the incorporated association. 8. The time within which, and manner in which, notices of general meetings and notices of motion are to be given, published or circulated. 9. The manner in which the funds of the association are to be controlled. 10. The intervals between general meetings of members of the incorporated association and the manner of calling general meetings. 11. The manner of altering and rescinding the rules and of making additional rules of the incorporated association. 12. Provisions for the custody and use of the common seal of the incorporated association. 13. The custody of records, books, documents and securities of the incorporated association. 14. The inspection by members of the incorporated association of records and documents of the incorporated association. 16 17 18 Section 3 – Strategic Planning WHAT AND WHY? Strategic planning is simply a means of establishing where a church believes God is leading it, to function for His Kingdom. The overarching strategic plan for us all is to follow Christ’s commission to go into the world and make disciples…It is useful however to break that down into specific local goals and strategies which can be used to measure local progress. A church’s strategic plan sets a clear course for the whole congregation – leaders and members – to achieve something for the Kingdom. The planning process is well covered in many management texts, but is essentially quite simple. It is best done by the leadership team of the church – usually the Board (elders) and senior staff – in a context of prayerful consideration of the church’s current condition, the needs of the community and the leading of the Holy Spirit. Other key leaders should be involved in the development to give them ownership of the plan but the final shape belongs to the Board and Pastor as primary leaders. 1. Pray – and pray again – think carefully about the church’s current situation and the opportunities for growth. 2. State a Vision – this answers the question “What will things look like when we have achieved our goals?” Keep it short and “punchy” – it should be easily memorized! Don’t be afraid to aim high! 3. State a Mission – this answers the question “what do we need to do, in very broad terms, to achieve our Vision?” Again a short phrase is best… Identify about 5 key functions, which must be done well to put the Mission into practice. (These are often called Critical Success Factors – CSF’s). For each CSF identify specific goals which are practical and measurable and which can be communicated to the ministry teams and/or staff – they will become responsible for achieving these goals. 4. Communicate the Plan to everybody and ask them to commit to its achievement. For more detail see the basic plan in the Appendix section. Leadership is about keeping the plan on track… Management is about harnessing the resources to get it done… 19 20 21 22 Section 4- Staff Issues THE ONE AREA WHICH CAUSES MOST CONFLICT AND DISCOMFORT IN NON PROFIT ORGANISATIONS, INCLUDING CHURCHES IS STAFF RELATIONS. GOOD STEWARDSHIP OF THIS FUNCTION WILL PAY DIVIDENDS IN THE HEALTH OF ANY CHURCH. One of the most challenging areas for small to medium churches is that of the role as an employer. Human resource management is a specialized field and the legal issues surrounding the selection, support and termination of employed staff can be complex. Ignorance of the law is no excuse and a church that unwittingly breaches any statutory obligation can be heavily penalized under legislation at both State and Federal levels. Whilst good will and trust operate well in most contexts, there are still certain obligations that must be observed. The key items to be addressed in any employment environment include: • Staff selection procedures • Documented Job descriptions • Documented conditions of employment • Regular performance and salary reviews • Grievance and conflict resolution procedures • Well-kept records • Clear lines of authority and accountability. • Good communications The relationship between the employing group (the church) and staff, is critical to the success of the whole body. Clearly the Christian nature of our operations places different factors on the relationship when compared to a purely business context. This tends to make the matter more difficult if the guidelines are not clearly documented for the benefit of all parties. The following notes are designed to provide some guidelines on a range of issues. The former booklet “salaries and conditions for Churches of Christ Ministers” has now been included in this manual as many of the issues therein were management-related. 23 STAFF STRUCTURE As outlined in Section 1, the structure of the church will define how working relationships are to operate. This must be clear to all staff, from the senior pastor down to volunteers. This structure should be well communicated and should also minimize overlaps and gaps…. This manual is not meant to be prescriptive – but the recognized “best practice” structure for a church with our style of governance is as outlined in Section 1 with the senior pastor being accountable to the church board, but with total supervisory control of other staff. This means that the board sets guidelines for ministry and direction but then allows the staff, through the direction of the leading pastor to “get on with the job”. A church engages a leader to lead – not to be led! RECRUITING – PASTORS In view of the perceptions of the secular environment, the association strongly recommends that any pastor engaged should be at least eligible for endorsement as a Church of Christ Minister and must be credentialed to COCWA standards – for the protection of the church and the minister. The church lay leadership will generally engage a pastor – not an easy process. The method used should be clearly understood by all involved. Outside assistance, from a larger church or the Association staff, may be beneficial in terms of keeping the process on track. The senior pastor must have leadership qualities – his or her other gifts will shape the ministry, but the pastor must be able to gather other gifted people to do the work of ministry. A typical employment contract is appended for guidance - it is important to specify the terms and conditions of employment in a suitable format that all parties agree prior to the formal engagement. The document may seem cumbersome, but it is invaluable when clarifying issues that may arise during a pastor’s tenure. 24 APPOINTMENT OF A PASTOR Various methods may be adopted for appointing a pastor – each church will have a process of ratifying an appointment and then introducing a new leader. If a probationary period is specified it is important that this is clear to the applicant and that any review is conducted within the correct timeframe. RECRUITING– OTHER STAFF MEMBERS Under the proposed model the principal driver in the process will be the senior pastor in conjunction with a selection team that he or she appoints. The process is then the same in terms of advertising, interviewing and selection etc. Again all terms and conditions must be clearly documented for future reference. This applies to volunteer staff as well as paid staff – they all deserve the courtesy of knowing their role and conditions of service in unambiguous terms! FINANCIAL CONSIDERATIONS Financial conditions of employment should be carefully discussed with prospective staff members and clearly recorded. Churches must observe all statutory obligations with respect to superannuation; workers compensation insurance and long service leave entitlements. Association staff are able to advise on these matters which are addressed in the Finance Section of this booklet. A basic recruitment step by step process is provided in the Appendix section. 25 26 27 28 Section 4a – Ministers’ Employment Issues HR ISSUES FOR BOARDS AND MANAGERS This part of the guide has been given a separate subsection as it is one of the most important areas of the Church administrative structure. INTRODUCTION The information in this section is intended to be a minimum standard that can be applied to meet the needs of all churches and organisations. (Recognising that some ministers are employed by bodies other than local churches.). It is impractical to cover every variable to account for the differing sizes and complexities of our churches. Large churches with team ministries and multiple staff will develop internal standards to meet their circumstances - and that is entirely appropriate provided that these minimum requirements are met and all statutory obligations are observed. NOTE for ease of reference the notion of “Church” in this document hereafter will be assumed to be inclusive of employing bodies other than local congregations. GENERAL PRINCIPLES The relationship between the church and the minister is complex. The Church Board is ultimately responsible for the overall health and wellbeing of the Minister in the context of the working relationship and as a spiritual duty under biblical principles. Ministers are first and foremost servants of Jesus Christ, called to exercise a public and representative ministry in His name within and through the church. They are both servants and leaders. Their primary purpose is to further the work of the Kingdom of God at a particular place and in a particular time. Thus the relationship between church and minister is to be influenced by the Holy Spirit. This places responsibilities on both parties above and beyond those that apply in an employer/employee relationship in the commercial world, but it must also be understood that a significant body of industrial legislation still applies to the church or other agency which employs a minister. 29 Government legislation related to such matters as taxation, employment conditions, social security benefits, superannuation, workers compensation insurance, workplace health and safety legislation and long service leave all applies to churches. The relationship between the minister and the church will be regarded, in secular contexts, as an employee/employer contract under some industrial legislation, but not in other areas such as social security law. The Minister’s Remuneration s It is unjust to use God' call of a minister to imply that he or she can be remunerated at a low level. The church has the responsibility to observe the Biblical principle (1 Corinthians 9:8-14) that ministers are to be paid a fair wage that enables them (and their families) to "receive their living by the gospel". It is inappropriate to justify a high level of remuneration on the sole basis that ministers could be receiving higher remuneration (in some cases as a professional) if they were in secular employment. However the relevant qualifications, experience, workload and skills of a minister may be used to justify a range of remuneration rather than a “one size fits all” approach. It is wrong for reimbursement of work related expenses incurred by a minister to be regarded as part of their remuneration (e.g. car expenses for church business). In some instances a minister may have financial resources that are independent of the remuneration from the church (e.g. through family inheritance or a pension). This should not affect the level of salary and reimbursements to the minister. He or she may choose to forego some benefit in this context, but that is a personal decision. Part time Remuneration There are situations in which the church does not have sufficient finance to pay the recommended full time remuneration rate. If this is so, as in the case of a newly formed or very small fellowship, the following principles should be considered before a minister is sought: If an increase in the level of church giving is not possible or not enough, the s Association recommends that the minister' appointment be a part-time one according to the proportion being paid. If a part-time appointment is necessary, the remuneration may be structured in various ways to improve the benefit for the minister and the church. Advice from the Association office may be useful in this context. What ministers do with the amount of time for which they are not being employed is for them to decide. If they choose to work for part or all of that time voluntarily for the church, that is their choice, but they should be free (if they so desire) to take a casual or part-time job to assist with the family' s finances. The church (and especially the leadership) should, by words and attitude, provide them with that freedom. 30 Matters of salary and conditions should not become issues that affect the level of confidence and relationship between the minister and the church. Thus the Association recommends that the Church's Board formally adopts a policy that recommendations of the Association be accepted automatically (i.e. without discussion at Board level). Such a motion is not intended to prevent the Board from considering special circumstances (e.g. a financial deficit), but it provides for a degree of objectivity in handling routine issues. RECOMMENDED SALARY PACKAGE ARRANGEMENTS - The details of this topic are contained in the Finance Section. TERMS AND CONDITIONS OF EMPLOYMENT It is essential that the church and the minister reach agreement on terms and conditions of employment prior to an appointment being made. A Ministry Employment Agreement, or Contract, signed by both the minister and an authorised representative of the church, should confirm those terms and conditions. It should define the responsibilities that the minister is to undertake and the authorities that are to be applied in the exercise of those responsibilities. It is usual for those responsibilities and authorities to be defined in an attachment to the agreement headed "Sample Employment Contract” (see Appendix C). Further, the church should ensure that all decisions regarding ministry appointments and salaries should be properly recorded in official minutes and brief details conveniently kept to allow for quick reference (see Appendix H). The following are the suggested minimum guidelines for establishing Terms and Conditions of Employment. PAY Pay Period While churches are free to pay the salary at whatever interval is convenient to both parties, i.e. weekly, fortnightly or monthly, an electronic transfer of salary to a minister’s account on a Thursday will align this with normal practice.. Work Related Expenses Any legitimate expense incurred by ministers in the course of their ministerial function, within any limits or conditions contained in the employment agreement, should be reimbursed by churches. 31 Holiday Leave A minimum of four weeks annual leave is to be provided (including four s Sundays). The minister' leave entitlement accumulates pro rata for the time of employment when a full year is not served. Benefits and components are based on a full year of 52 weeks and should therefore be paid during periods of leave. Allowing leave entitlements to accumulate from year to year is undesirable for both the minister and the church. Ministers need periods of rest and renewal each year and should be encouraged, and in some cases, required, by the governing body of the church to take leave. Under State legislation, a loading of 17.5% of 4 weeks salary should be added s to the minister' salary for Annual Leave. (NOTE: The loading is to be paid on the TAR, irrespective of the amount paid as cash salary in a Fringe Benefits package). It is the responsibility of the Church to maintain an accurate record of leave accruals and usage. (See Appendix G). Long Service Leave The church has a legal obligation to make the appropriate contribution to the s minister' Long Service Leave (LSL) entitlement. The Churches of Christ Provident Fund (CPF) acts for churches throughout Australia in the legal administration of LSL and churches must make an annual payment to CPF of 1.3 times the weekly salary package. This payment is to be made by March 31 each year. No taxation payment is deducted from remittances to CPF for LSL. The general Long Service Leave Act in Western Australia, provides for 13 weeks leave after 15 years service, with a pro-rata entitlement after 8 -10 years being a possibility, through negotiation with the Provident Fund. Churches of Christ in Australia are regarded as one employer for this purpose, thus giving portability of entitlement to ministers, (through the Provident Fund) without an excessive cost burden on an individual congregation. The church should ascertain the LSL credit entitlement from CPF when negotiating a ministry appointment, and ask the minister for details of any intended use of that entitlement. Working Week For most people, a working week means five days. The minister' salary s package is also formulated on this basis, although in a ministry situation there can be no hard and fast rules. It is important for the church (i.e the Board) to acknowledge the need for a minister to have appropriate recreation days and to ensure that the minister has the opportunity to use them conveniently. Where circumstances require that the minister works on a public holiday, an alternative holiday should be arranged, preferably in the same week. 32 Similarly, when an agreed day off falls on a public holiday, an alternative day off should be arranged preferably with the evening before also free of work commitments. Notwithstanding the foregoing, ministers will recognise that their call to involvement in the life of a church may take priority over a rigid interpretation of hours worked within a given working week, but they should be encouraged to take adequate days off wherever possible. A legalistic interpretation of these areas of work is unhelpful in an environment where the majority of a congregation gives time above and beyond their “work time” to the service of the church. Ministers should be sensitive to this fact and arrange their own time accordingly. Sick Leave A minimum of ten days paid Sick Leave per year is recommended. The entitlement is cumulative over the term of a specific ministry appointment, but sick leave is not portable, nor is the entitlement able to be paid out in cash. It is essential that both the accumulation and the use of sick leave are adequately documented (See Appendix G.) Extended sick leave may be granted solely at the discretion of the employing church. Churches are encouraged to consider insuring against loss of ministry services due to accident or extended sickness of their minister. In some cases, it may be necessary to employ another person to undertake the ministry role and, for a small outlay, insurance will cover the salary of the sick or injured minister, freeing up funds to pay the person called in to assist. Compassionate Leave Churches will, naturally, be very supportive of ministry families in times of bereavement and/or grief. Bearing in mind that ministers have often moved long distances from their home and possibly from their home State, leave should be granted on compassionate grounds for such things as funerals and major family trauma. The Church leadership should also understand that, like others, the minister and family need follow up pastoral care from time to time. Study Leave If a minister wishes to undertake a course of study or attend a seminar which will benefit his ministry the church should be prepared to negotiate study leave to enable the minister to do so without using up normal annual leave entitlements. s Worker' Compensation There is a legal requirement for churches to be registered for Workers' Compensation. To comply with the legislation, the salary calculation entered in the declaration should cover all items in the remuneration package (TAR), and not just the cash salary component. 33 Where the compensation paid in the event of a claim does not totally cover s the minister' remuneration, the church should accept responsibility to make up the difference for up to twelve months. Payments of other benefits may be adjusted by mutual consent according to the circumstances of the case. Housing In general terms the TAR includes any consideration of a minister’s housing needs. If he or she is buying a home any associated expenses can legitimately be paid from the FB account. If a manse is provided, the TAR should be paid and the church may then decide whether it will charge the minister rent for the manse. Car Purchase And Finance s Dependent upon the vehicle supplier, fleet owner' discount and other factors, concessions may be available to ministers when purchasing a vehicle. The Association staff can provide documentation to assist in this regard. The COCWA Mutual Fund may also lend up to 75% of the purchase price of a vehicle to a minister to assist with such purchases. Churches may also consider leasing a vehicle on the minister’s behalf. Telephone It is expected that the church will pay a proportion of the minister’s telephone account on the basis that it will be used for ministry related matters. The relevant quantum is to be negotiated and stated within the employment agreement. A fixed percentage is more convenient administratively than the keeping of a call log. Removal Expenses Reasonable relocation expenses for the ministry family, their furniture and effects should be paid by the church when a minister takes up a new appointment. Wherever possible, these should be paid to the contractors or parties involved rather than being reimbursed to the minister. Adequate transit insurance should be considered, and the normal practice of obtaining competitive quotes from cartage contractors will ensure that the overall removal expense is minimised. Professional Development Ministers need to keep pace with the spiritual and practical demands of contemporary ministry. The value of continuing study and in-service training is commended to both church and minister, and churches are encouraged to:- 34 State & National Ministers’ retreats/camps s Pay the costs of the minister' attendance at State ministers'retreats/camps /seminars and the National Ministers'Seminar normally held in conjunction with National Conference. Participation of the minister in both State and National Conferences is strongly recommended. Ministers should be allowed sufficient leave with pay to enable him/her to travel, to attend and return from such conference, convention or seminar. Leave granted should not be deducted from Annual Leave entitlement. The church should also consider the reimbursement of any additional travel expenses. Study Leave Consider favourably any reasonable request from the minister for study leave that is used for legitimate study purposes. Association Work Release the minister for participation in the wider work of the Association. Church visits Offer its minister a periodic opportunity to visit another church to gather ideas, learn and be refreshed. 35 36 37 38 Section 5 – Finances MINISTERS’ SALARY ADMINISTRATION The Association will seek to make annual review recommendations by April 30 to allow churches to include any increases in their Budget for the following year. Ministers’ Salary Components The past practice of splitting the minister’s remuneration into a variety of sub components is now seen unnecessary. The most important aspect of the ministerial remuneration process is the significant advantage given to the church and the minister under current Taxation Law, which allows the church to provide benefits to the minister that do not attract Fringe Benefits Tax (FBT). This area deserves further explanation so that all parties understand its implications. Fringe Benefits Normally, if an employer provides non-cash benefits to an employee, then the employer has to pay FBT on the value of the benefit. Currently churches are exempt from this requirement of the Tax Law in relation to payments and services provided to bona fide ministers, which are directly related to their ministry work. This means that a church can provide goods and services, to its minister(s) and not have to pay FBT on those items which are directly related to their ministry work. This is the principle on which the minister’s remuneration can be split into a cash component (which is taxable under normal Tax Law regulations) and a non-cash benefit component that is supplied by the church. In the past this has often been referred to as a “ministry working account arrangement” whereby the church has paid for items for the minister from an account held for that purpose. This terminology refers to the process of applying the principle rather than the principle itself. For clarity and for legal purposes, it is better to refer to tax exempt Fringe Benefits that are provided to the minister by the church. REMUNERATION PACKAGE The minister’s remuneration is therefore split into two components: A cash salary component – which is treated as his only income for Tax purposes ;and, A Fringe Benefit component – which is ignored for income Tax purposes but which may be regarded as income for Social Security purposes (see below). 39 Splitting the total Remuneration The actual method of the splitting of the total annual remuneration (TAR) into these two components is a decision that each denomination has decided for itself. The principle used by Churches of Christ, and many other groups, is based on an ethical premise that evasion of Tax is illegal and any notion that churches or ministers are exploiting the law for that purpose must be avoided. It is also important to note that the exempt Fringe Benefits must be related to the work or role of ministry – so there are some areas of the minister’s expenditure which fall outside this category and must be taxed in terms of the income or benefit provided. The Association considers that a simple formula can be used for the basic remuneration package. In this model, the total remuneration is set at a figure, which is believed to be a reasonable, and it is then split on a 50/50 basis into cash and fringe benefits. This system of remuneration takes advantage of the additional value of the fringe benefit system in that the gross value of the package to the minister. (i.e. a package split in this manner is of more value than a straight salary taken in cash at the total amount – so $40,000 split 50/50 is, in broad terms, equivalent in purchasing power to an unsplit cash salary of around $50,000 because the fringe benefit is, in effect, a tax free component, but other variables such as Social Security payments will distort this comparison.) Total Remuneration Amount In reaching a figure for the total remuneration several factors should be considered – so a single “bottom line” number is probably inappropriate. What the Association has done is suggest a range of salary that can be applied across a number of situations. The “brand new” pastor just out of college for example will generally start at a slightly lower figure than a minister who has several years experience. Similarly, a larger church will place different demands on its staff than a small, solo minister position. Whilst the ideal may be to offer everyone the same package, practicality suggests that this is unrealistic and that improved skills and capacities should be recognised. The total annual remuneration (TAR) range which is regarded as the MINIMUM acceptable standard for full time ministry within COCWA as of 1 July 2008 is, therefore: $48,000 to $56,500 The total will then be split 50/50 between a cash component and fringe benefits. So, a minister with a TAR of $48,000 would receive $24,000 in cash, plus Fringe Benefits paid by the church to a total value of $24,000 per annum. 40 In Summary Taxed Income PLUS Exempt EQUALS TAR 50% + Fringe Benefits 50% = This portion is paid This portion is NOT paid in The TAR is used to in cash as “normal” cash – it is used to pay for calculate salary and taxed goods and services which superannuation and and declared to the are related to the leave entitlements Tax Office and minister’s role and NOT (including Long Social Security declared for tax purposes, Service Leave) It is Dept (if applicable). but MAY have to be adjusted annually by declared for Social CPI. Security purposes. The TAR And Other Payments It must be emphasised that the TAR may, by mutual agreement, include any leave loading payment (usually paid at 17.5% on leave pay) but NOT superannuation or long service leave provisions – these are paid by the church under legal obligations and are separate from salary and fringe benefits. Similarly any REIMBURSEMENT of work related expenses is outside the remuneration package. It is not appropriate for the fringe benefit component of the package to be used to reimburse expenses incurred in the work of the church, which would not normally be paid by an employee. To clarify, if the minister owns a computer which he or she uses for work it is appropriate for the costs of running it to come from the FB account. If paper is purchased to produce a document for the church on that computer, then the cost of the paper should be reimbursed from church funds NOT the minister’s FB account. This all indicates the importance of having a clear written arrangement with the minister which sets out exactly what the TAR contains and which expenses, if any, the church will reimburse separately. TAR + Super- + Long = total annuation Service package provision 41 Accounting Issues The cash salary should be paid in arrears on a basis agreed with the minister, but fortnightly is a good norm. It is mandatory by law for the church to provide a pay slip each pay period, which is a statement of gross salary, paid and details of any deductions (e.g. PAYG tax instalments). Totals should be given for the current pay period and a cumulative figure for the year to date. Electronic transfer of funds to a bank account is preferable to payment by cheque and this can be set up by the church’s bank. The Fringe Benefits are provided by the church paying for items on the minister’s behalf – usually on the production of accounts or tax invoices. For example, if the minister has repairs done to his vehicle it is legitimate for the church to pay for those repairs from the fringe benefits account either “up front” or when the minister produces a receipt (including GST) or a tax invoice. It is important that all relevant receipts are filed for the FB account as GST can be recouped – on the basis that the church is obtaining the goods, not the minister. It is also essential that the minister has no authority to operate the FB account and that he or she does not receive any cash benefit from it. Superannuation This subject is governed by Federal legislation and is not optional. A 9% [2003-2004 figure] minimum superannuation contribution, based on the annual salary of the minister (or other employee) is the legal obligation of each employer. It must be emphasised that this is legal obligation on the church – not the minister or any employee– to pay this benefit independently of salary or any other remuneration. In view of the low level of contribution made at this minimum standard. The Association strongly recommends that churches pay the superannuation levy on the total TAR . This is the practice in secular organisations and it is manifestly unreasonable to expect ministers to accept a lower level of retirement benefit. In 2004 the former Churches of Christ provident fund transferred all investments to Christian Super. This body now receives payments from churches that formerly used the Provident Fund system. In the event that a particular minister is not a former member of the Provident Fund, the church still has a legal obligation to contribute to Superannuation. Ministers may now maintain an independent Superannuation fund and exercise a choice to have their payments made to any legitimate fund. Superannuation benefits vary according to a number of factors, including the age of the minister on entry to the Fund. Details of benefits for a particular minister are available from the Christian Super administrators. The Fund has been non-contributory since 1982 (ie. the church pays the total contribution), but ministers can make additional contributions that attract further benefits. 42 Churches of Christ Church Management Guide Appendix SAMPLE EMPLOYMENT CONTRACT SAMPLE EMPLOYMENT CONTRACT AGREEMENT Between ABC CHURCH OF CHRIST and Pastor………. THIS AGREEMENT is made on the th 20 BETWEEN The body corporate described in item 1 of the Schedule (“THE CHURCH”) AND name of address (“the Title of position) 1. RECITAL The parties have agreed that the Team Leader Pastor will be employed by the church in the Position upon the terms and conditions set out in this document. 2. OPERATIVE PROVISIONS 2.1 INTERPRETATION Definitions In this document: “Confidential Information” means any and all information, data, reports, operations, know-how, accounts, dealings, records, materials, plans, statistics, finances or other documents and things (other than a document or thing which is already in the public domain), whether written or oral and of whatever type or nature relating to the property, assets, liabilities, finances, dealings or functions of the church or any undertaking from time to time carried on by the church. “CPI” means the Consumer Price Index All Groups (Perth) published from time to time by the Australian Bureau of Statistics. “Industrial Relations Law” means: the Industrial Relations Act 1988 and the Industrial Relations Reform Act 1993 (Commonwealth); the Industrial Relations Act 1979 (Western Australia); and any other law of the State or the Commonwealth which affects the subject matter of this document; “Performance Criteria” means the performance criteria set out in Annexure 1 to this document (to be defined by respective churches); “Position” means the office or position described in Item 3 of the Schedule; “Position Description” means Annexure 2 to this document (to be defined by respective churches); “Remuneration” means the remuneration specified in Item 5.1 of the Schedule; “Term” means, subject to Item 8 of the Schedule, the period commencing on the commencement date specified in Item 4 of the Schedule and ending on the expiry date specified in Item 4 of the Schedule. “Elders” means the persons appointed under the Church Constitution to govern the Church. 2.2 CONSTRUCTION Unless expressed to the contrary: words importing: • the singular include the plural and vice versa; • any gender include the other genders; • if a word or phrase is defined cognate words and phrases have corresponding definitions; a reference to: • a person includes a firm, unincorporated association, corporation and a government or statutory body or authority; • a person includes its legal personal representatives, successors and assigns; • a statute, ordinance, code, regulation, award or other law includes regulations and other statutory instruments under it and consolidations, amendments, re- enactments or replacements of any of them; • a right includes a benefit, remedy, discretion, authority or power; • an obligation includes a warranty or representation and a reference to a failure to observe or perform an obligation includes a breach of warranty or representation; • provisions or terms of this document or another document, agreement, understanding or arrangement include a reference to both express and implied provisions and terms; • time is to local time in Perth, Western Australia; 2 • “$” or “dollars” is a reference to the lawful currency of Australia; • this or any other document includes the document as varied or replaced and notwithstanding any change in the identity of the parties; • writing includes any mode of representing or reproducing words in tangible and permanently visible form, and includes facsimile transmissions; • any thing (including, without limitation, any amount) is a reference to the whole or any part of it and a reference to a group of things or persons is a reference to any one or more of them. Headings Headings do not affect the interpretation of this document. 3. EMPLOYMENT 3.1 TERM The church shall employ the Team Leader Pastor in the Position for the Term upon the terms and conditions set out in this document. Extension of Term There is no compulsion on either the church or the Team Leader Pastor to agree to an extension of the Term, however: • the church shall invite the Team Leader Pastor in writing not later than 12 months prior to the expiry of the Term to discuss the possibility of the parties entering into a new agreement for a further term with the intent of concluding those discussions not later than 6 months prior to the expiry of the Term; and • in the event that the church and the Team Leader Pastor agree to an extension of the Term, this document shall continue to apply unless varied in writing by the parties. Application of Industrial Relations Act 1988 For the avoidance of doubt, this document is not made for the purpose or with the intention of avoiding the church’s obligations as employer under the provisions of the Industrial Relations Act 1988 (Commonwealth) including Subdivisions B, C, D and E of Divisions 3 Part VIA of that Act. 3 3.2 PREAMBLE This agreement is designed to cover the general conditions of employment of pastoral staff at ABC Church of Christ . It is to be applied in conjunction with the constitution of the Church and any relevant documents issued by Churches of Christ in Western Australia. When new documents are issued which impinge on any conditions within this agreement, any incongruence will be clarified by the leadership, in consultation with the pastor, and any decision made is to be appended to this agreement and duly dated and signed by both parties. Both parties to this agreement will apply it in good faith and in a context of Christian standards of ethical and open dealings. Any difficulties experienced by either party will be brought to the attention of both parties as quickly as possible with a view to its effective resolution. 3.3 TEAM LEADER PASTOR’S DUTIES AND AGREEMENTS WITH THE CHURCH Duties The Team Leader Pastor shall exercise such powers and carry out such duties and functions as are set out in the Position Description; and Team Leader Pastor ‘s Agreements with the church: General The Team Leader Pastor agrees with the church that the Team Leader Pastor must: • unless absent on leave as provided in this document or through illness or involuntary injury, devote the whole of the Team Leader Pastor’s time and attention during normal working hours, and at such other times as may be reasonably necessary, to the business of the church and to performing the Team Leader Pastor’s obligations under this document; • not have any direct or indirect pecuniary interest in any business, partnership, corporation, club, organisation or group that would in any way compromise the performance of the Team Leader Pastor’s obligations under this document, unless a disclosure of that interest has been made to the church and the Team Leader Pastor has complied with any directions of the church in respect of that interest; and • not hold any position for monetary or other reward which may in any way be seen to conflict with the Team Leader Pastor ’s obligations under this document. Team Leader Pastor ’s Duty of Confidentiality The Team Leader Pastor agrees with the Church that the Team Leader Pastor must: • not at any time during or after the expiration or sooner determination of the Term divulge or reveal to any person any Confidential Information which may come to the Team Leader Pastor’s knowledge in performing the Team Leader Pastor’s obligations under this document, except as far as: may be necessary or required in connection with the proper performance of the Team Leader Pastor’s obligations and duties to the Church; or the Church may from time to time in writing direct or recognize the Team Leader Pastor to divulge or reveal; 4 • take or cause to be taken all reasonable precautions as may be necessary or desirable to maintain the confidentiality and to prevent disclosure or other release of any Confidential Information to a person other than as may be approved from time to time in writing by the Church; and unless otherwise instructed in writing by the Church, at any time when, pursuant to the relevant recognized policies the Church, the Team Leader Pastor is disclosing any Confidential Information to any person advise the person that the Confidential Information is of a confidential, private and secret nature 3.4 PERFORMANCE CRITERIA AND REVIEW OF TEAM LEADER PASTOR 3.4.1 PERFORMANCE CRITERIA The Performance Criteria shall be as set out in Annexure 1 (to be defined by respective churches). The Team Leader Pastor agrees with the Church that the Team Leader Pastor must, in performing the Team Leader Pastor’s obligations under this document, use every endeavour to measure up to the Performance Criteria. 3.4.2 PERFORMANCE REVIEWS The Team Leader Pastor’s performance pursuant to this document shall be reviewed by the Church from time to time during the Term. The Church must give to the Team Leader Pastor at least 30 days’ notice in writing that a performance review is to be conducted. A performance review must be conducted by the Church at least once, but not more than twice, in every 12 months. An informal review shall be conducted 6 months after the commencement of this contract. CONDUCTING PERFORMANCE REVIEW Any performance review will be conducted on behalf of the Church by a panel appointed by the elders. (“the Reviewing Panel”). The Performance Appraisal and all matters directly associated with it shall be private and confidential as between the Team Leader Pastor and the Reviewing Panel except to the extent of this contract or any other requirement of law. Procedure A performance review shall follow the following procedure: As soon as practicable after receipt of notice pursuant to 2 above, the Team Leader Pastor shall prepare a report assessing the Team Leader Pastor’s own performance of the Team Leader Pastor’s obligations under this document measured against the Position Description and the Performance Criteria; the Team Leader Pastor will present his report to the Reviewing Panel, and be available for interview; Within one month of the conclusion of the performance review the Reviewing Panel shall prepare a report, in consultation with the Team Leader Pastor, to be signed by both the elders and the Team Leader Pastor, such report to include; • any conclusions about the Team Leader Pastor’s performance during the period the subject of the performance review; 5 • any agreement between the Reviewing Panel and the Team Leader Pastor to vary the Performance Criteria as a consequence of the performance review and any comments by the Team Leader Pastor on any such proposal; • any directions or recommendation made to the Team Leader Pastor in relation to future performance by the Team Leader Pastor of the Team Leader Pastor’s obligations under this document; and • details of the extent, if any, to which the Team Leader Pastor disagrees with any statement in the report. 3.5 REMUNERATION The Church must pay to the Team Leader Pastor the remuneration specified in Item 5 of the Schedule. 3.5.1 PAYMENT OF CASH COMPONENT The cash component of the remuneration shall be payable fortnightly in arrears to a bank account nominated by the Team Leader Pastor. 3.5.2 VARIATION OF CASH COMPONENT As long as the Team Leader Pastor advises the Church, in writing, that the remaining cash component is adequate for the Team Leader Pastor’s ongoing living expenses, the Team Leader Pastor may, at the Team Leader Pastor’s option, receive payment of a portion of the cash component in such manner as suits the Team Leader Pastor’s personal circumstances, provided that in such circumstances the method of payment complies with all relevant State and Commonwealth laws and that any liability with respect to the taxation implications including, without limitation, fringe benefits tax, shall be borne by the Church and reimbursed by the Team Leader Pastor and in this regard the Church may deduct such amounts from any outstanding sum due from the Church to the Team Leader Pastor and the Team Leader Pastor consents to such deductions being made. 3.5.3 REVIEW OF REMUNERATION The remuneration must be reviewed at the times and in the manner specified in Item 7 of the Schedule, provided that under no circumstances shall the remuneration be reduced as a result of such a review. 3.6 EXPENSES 3.6.1 REIMBURSEMENT OF EXPENSES The Church must reimburse the Team Leader Pastor for all reasonable and necessary out-of-pocket expenses properly incurred in the performance of the Team Leader Pastor’s obligations under this document, but only to the extent that the Team Leader Pastor submits an account of such expenses incurred with supporting documentation. (NOTE the following para is optional – this may be included in salary ) For clarification this includes the payment of all equipment costs of maintaining a telephone at the pastor’s residence and 75% of all call costs incurred on that line and 75% of the cost of internet services provided to the pastor’s home. 6 3.7 LEAVE 3.7.1 ANNUAL LEAVE The Team Leader Pastor is entitled to four (4) weeks paid annual leave each year. 3.7.2 LONG SERVICE LEAVE The Team Leader Pastor is entitled to long service leave in accordance with the relevant legislation and prevailing Churches of Christ (WA) policy. 3.7.3 OTHER LEAVE The Team Leader Pastor is entitled to: (a) sick leave; at the rate of 10 days per annum which shall accumulate to a maximum of 100 days; (b) bereavement and emergency leave as approved by the elders from time to time; (c) study leave of up to two weeks per annum; (d) parental leave as approved by the elders from time to time 3.7.4 LEAVE LOADING Leave loading shall be paid on the period of annual leave at the rate of 17.5% 3.8 TERMINATION 3.8.1 AUTOMATIC TERMINATION AT END OF FIXED PERIOD The employment of the Team Leader Pastor shall, unless the Term is extended, terminate on the expiry date specified in Item 4 of the Schedule without the requirement of either party giving notice. 3.8.2 TERMINATION BY CHURCH: TEAM LEADER PASTOR’S DEFAULT The Church may terminate the Team Leader Pastor’s employment in terms of this document at any time, but only after due observance of the provisions of the church constitution in this regard, by giving notice in writing to the Team Leader Pastor specifying a period of notice not less than 14 days if the Team Leader Pastor: (a) Is guilty of any serious misconduct, as assessed by the eldership, which is related to the Team Leader Pastor’s employment in terms of this document; or not less than 28 days notice if the Team Leader Pastor (b) Fails to substantially measure up to the Performance Criteria and such failure continues for a period of 3 months after the Church serves upon the Team Leader Pastor written notice of that failure and of the course of action which the Church wishes the Team Leader Pastor to follow in order to address and correct that failure; (c) Becomes a mentally incapacitated person; or 7 (d) Becomes permanently incapacitated by reason of accident or illness from performing the Team Leader Pastor’s duties under this document (and for the purpose of this paragraph, incapacity in excess of ninety (90) consecutive days or for an aggregate period of ninety (90) days in any period of twelve (12) months is deemed to be permanent incapacity) provided that the Church may not terminate the Team Leader Pastor’s employment in terms of this document pursuant to this paragraph (d) unless and until the Team Leader Pastor no longer has any entitlement to paid sick leave and the matter has been fully considered by the elders. 3.8.3 TERMINATION BY TEAM LEADER PASTOR: CHURCH’S DEFAULT The Team Leader Pastor (without prejudice to any other rights of action which he may have) may terminate the Team Leader Pastor’s employment in terms of this document at any time without prior notice if the Church breaches any of the provisions of this document and does not remedy that breach within fourteen (14) days of the Team Leader Pastor serving written notice of the breach upon the Church. 3.8.4 TERMINATION BY TEAM LEADER PASTOR: ANY REASON The Team Leader Pastor, for any reason, may terminate the Team Leader Pastor’s employment in terms of this document by giving to the Church six (6) weeks notice in writing in the first and second year of the term and four (4) weeks in the third and subsequent years of the term; or such lesser period in any year as is agreed to by both the Team Leader Pastor and the elders, for any reason other than a reason specified in 3. 3.8.5 TERMINATION BY CHURCH: ANY REASON The Church, for any reason, may terminate the Team Leader Pastor’s employment in terms of this document, but only after due observance of the provisions of the church constitution in this regard, by giving to the Team Leader Pastor three months notice in writing, but if the Church does so for any reason other than a reason specified in Item 3.8.2, the Church must pay to the Team Leader Pastor the payment calculated as set out in item 8 of the Schedule (as adjusted from time to time). 3.8.6 TERMINATION BY OTHER MEANS If the Church, for any reason, ceases to exist, and the Team Leader Pastor’s employment is terminated, the Church must pay to the Team Leader Pastor the payment calculated as set out in Item 8 of the Schedule (as adjusted from time to time). 3.8.7 CONFIDENTIAL INFORMATION Upon termination, the Team Leader Pastor must deliver up to the Church all Confidential Information that may be in the custody, possession or control of the Team Leader Pastor and all copies thereof and the Team Leader Pastor may not keep or retain any copies whatsoever. 8 3.9 INCONSISTENCIES AND SEVERANCE 3.9.1 INCONSISTENCY: INDUSTRIAL RELATIONS LAW If there is any inconsistency between this document and any Industrial Relations Law, the Industrial Relations Law prevails, but only to the extent of the inconsistency. 3.10 ALTERNATIVE DISPUTE RESOLUTION 3.10.1 PROHIBITION OF COURT PROCEEDINGS Unless a party to this document has complied with Items 3.10.1 to 3.10.4, that party may not commence Court proceedings or arbitration relating to any dispute arising from this document except where that party seeks urgent interlocutory relief in which case that party need not comply with this Item before seeking such relief. Where a party to this document fails to comply with Items 3.10.1 to 3.10.4, any other party to this document in dispute with the party so failing to comply need not comply with this Item before referring the dispute to arbitration or commencing Court proceedings relating to that dispute. 3.10.2 NOTICE OF DISPUTE AND DESIGNATION OF REPRESENTATIVES Any party to this document claiming that a dispute has arisen under this document between any of the parties to this document shall give written notice to the other party or parties in dispute designating as its representative in negotiations relating to the dispute a person with authority to settle the dispute and each other party given written notice shall promptly give notice in writing to the other parties in dispute designating as its representative in negotiations relating to the dispute a person with similar authority. 3.10.3 RESOLUTION OF DISPUTE BY REPRESENTATIVES The designated persons shall, within fourteen (14) days of the last designation required by Item 3.10.2, following whatever investigations each deems appropriate, seek to resolve the dispute. 3.10.4 MEDIATION If the dispute is not resolved within the following fourteen (14) days (or within such further period as the representatives may agree is appropriate) the parties in dispute shall within a further fourteen (14) days (or within such further period as the representatives may agree is appropriate) seek to agree on a process for resolving the whole or part of the dispute through means other than litigation or arbitration, such as further negotiations, mediation, conciliation, independent expert determination and on: • the procedure and timetable for any exchange of documents and other information relating to the dispute; • procedure rules and a timetable for the conduct of the selected mode of proceeding; • a procedure for selection and compensation of any neutral person who may be employed by the parties in dispute; and 9 • whether the parties should seek the assistance of a dispute resolution organisation. 3.10.5 PRIVILEGE The parties acknowledge that the purpose of any exchange of information or documents or the making of any offer of settlement pursuant to this Item 3.10 is to attempt to settle the dispute between the parties. No party may use directly or indirectly any information or documents obtained through the dispute resolution process established by this Item 3.10 for any other purpose than in an attempt to settle a dispute between that party and other parties to this agreement. 3.10.6 COURT PROCEEDINGS After the expiration of the time established by or agreed under Item 3.10.4 for agreement on a dispute resolution process, any party which has complied with the provisions of Items 3.10.1 to 3.10.4 may in writing terminate the dispute resolution process provided for in those Items and may then refer the dispute to arbitration or commence Court proceedings relating to the dispute. 3.11 MISCELLANEOUS 3.11.1 LEGAL COSTS Subject to any express provision in this document to the contrary, each party shall bear its own legal and other costs and expenses relating directly or indirectly to the preparation of, and performance of its obligations under this document. 3.11.2 AMENDMENT This document may only be varied or replaced by a document in writing duly executed by the parties. 3.11.3 WAIVER AND EXERCISE OF RIGHTS A single or partial exercise or waiver of a right relating to this document will not prevent any other exercise of that right or the exercise of any other right. A party will not be liable for any loss, cost or expense of any other party caused or contributed to by the waiver, exercise, attempted exercise, failure to exercise or delay in the exercise of a right. 3.11.4 RIGHTS CUMULATIVE Subject to any express provision in this document to the contrary, the rights of a party under this document are cumulative and are in addition to any other rights of that party. 3.11.5 GOVERNING LAW AND JURISDICTION This document is governed by and is to be construed in accordance with the laws in force in Western Australia. Each party irrevocably and unconditionally submits to the non-exclusive jurisdiction of the courts of Western Australia and any courts which have jurisdiction to hear appeals from any of those courts and waives any right to object to any proceedings being brought in those courts. 10 3.11.6 AGREEMENT PERSONAL AND NOT TO BE ASSIGNED This document is personal to the parties and is not capable of being assigned. 3.11.7 MEDIATION COSTS The costs of the expert’s determination referred to in Item 7(b) of the Schedule shall be paid by the Church. 11 SCHEDULE SCHEDULE 1. CHURCH: (Preamble) Name & Address of church: 2. TEAM LEADER PASTOR: (Preamble) Name & Address of pastor: 3. POSITION (Item 1 - Contract) Team Leader Pastor 4. TERM (Item 3.1 - Contract) 5 years Commencement date: Expiry date: 5. REMUNERATION (Item 3.5 - Contract) 5.1. Remuneration Package The Team Leader Pastor shall be entitled to a total remuneration package made up of the following components: A cash salary component valued at $….. per annum and adjusted annually. Additional benefits as set out in Item 6 of this Schedule. 5.2. Cash Component Adjustment The amounts referred to in 5.1 and 6 below shall be adjusted on the anniversary of the commencement date by the percentage movement in the CPI for the previous twelve (12) months using the index for the quarter immediately preceding the anniversary of the commencement date or by such greater amount as agreed between the parties. Except that if the movement in the CPI is negative, the adjustment shall not apply. 6. ADDITIONAL BENEFITS 6.1. Fringe Benefits The church shall provide Fringe Benefits under the terms applicable to Churches of Christ Ministers from time to time as promulgated by the Churches of Christ in WA Inc. 6.2. Superannuation The Church shall contribute, on a monthly basis, to a superannuation fund, or funds meeting all legal and statutory requirements an amount in accordance with the churches of Christ in WA prevailing policy on superannuation payments. This contribution by the Church is inclusive of any superannuation guarantee charge (as defined in the 12 Superannuation Guarantee (Administration) Act 1992 and the Superannuation Guarantee Charge Act 1992 payable by the Church in respect of the Team Leader Pastor. 6.3. Professional Membership Fees The Church shall pay annual membership fees for up to two professional organisations that are relevant to the Team Leader Pastor’s employment. 7. REMUNERATION REVIEW (Item 3.5 - Contract) The Church must, before the expiration of each year during the Term, review the remuneration and the following shall apply: The Church must, before the expiration of each year during the Term, review the remuneration, and in addition to any adjustment payable in accordance with Schedule Item 5.2, the following shall apply: not earlier than one month prior to a review date, either party may present the other with written submissions and evidence as to an appropriate increase, if any, in the remuneration and matters which the parties must consider include the following: • accomplishment of objectives and satisfactory service; • how the Position has changed and whether there has been a significant net increase or decrease in work value and responsibilities; • if the parties are unable to agree on the amount by which the remuneration is to be reviewed within one (1) month after the review date then either party may request the Churches of Christ in WA to appoint an expert to determine the matter and both parties shall be bound by the expert’s determination; and The total value of the remuneration so reviewed and varied shall be payable from and including the review date, irrespective of when the review and variation is finally determined. 13 8. TERMINATION PAYMENTS (Item 3.8 - Contract) Termination by Church In the event that the Team Leader Pastor’s employment is terminated by the Church otherwise than by those reasons specified in Item 3.8.2 of the Schedule, then the Church shall pay to the Team Leader Pastor an amount not less than one third of the cash amount specified in Item 5.1 of the Schedule (as adjusted from time to time) plus any benefits accrued under relevant legislation. EXECUTED by the parties: ........................................................... SIGNED by the Team Leader Pastor ........................................................... SIGNED by an elder on behalf of the church in the presence of: ............................................................ Witness (signed) ............................................................ Name of Witness 14 APPENDIX D FORMAT FOR JOB DESCRIIPTIION FORMAT FOR JOB DESCR PT ON 1. Title 2. Accountability (who does the position report to?) 3. Key Responsibilities – State main duties only– not every minor detail. List here 4. Outcomes Expected – what results are expected (this will be used to assess performance) List here 5. Main Skills / Experience Required List here 6. Terms Of Employment – salary and period, general conditions (in contract if necessary) review frequency etc. 7. Special Conditions – if relevant 15 APPENDIX E ABC CHURCH OF CHRIST SAMPLE DUTY STATEMENT SAMPLE DUTY STATEMENT 1. TITLE: TEAM LEADER PASTOR 2. POSITION OBJECTIVES Maintain the spiritual integrity of the church within the boundaries established by scripture, the ethos of Churches of Christ in WA and the church constitution and policies as determined by the leadership team from time to time. Coordinate, in conjunction with the leadership team, the church’s resources to meet agreed objectives in ministry. Manage the day to day running of the church and supervise all employees. 3. REQUIREMENTS OF THE POSITION Skills: • Leadership and management • Public ministry – communications • Interpersonal • Staff management and development • Meeting / groupwork • Project management Knowledge: Contemporary church structures and dynamics Contemporary management issues including contemporary industrial and legal issues pertaining to an employing organisation. Office administration and staff supervision Experience: At least 5 years prior experience in a senior ministry leadership role. Qualifications: Essential: A recognized qualification in a relevant Christian discipline. Desirable: A tertiary qualification in a relevant discipline. 16 4. KEY RESPONSIBILITIES • Direct the spiritual life of the church and promote its evangelical work • Coordinate, in conjunction with the eldership team and designated lay leaders, all key functions and ministries of the church • Manage staff in conjunction with the administrator • Develop and review, with the elders, the church’s mission and vision for ministry. • Maintain, in conjunction with the administrator, all administrative functions in accordance with sound practice and statutory requirements. • Attend to, and resolve, all matters of discipline involving any members in leadership roles. • Train leaders to resource the ongoing growth and life of the church. • Represent the church in public roles involving the media, public relations and ceremonial activities. • Attend to the personal spiritual needs of members and adherents with particular focus on those in leadership roles. 5. ORGANISATION RELATIONSHIPS (a) Responsible to: Eldership Team, as representatives of the congregation. (b) Supervision of: All paid staff and volunteers who undertake work of a professional or quasi-professional nature within the church. Internal and External Liaison: Internal – Elders, Staff, coordinators, committees. External – Churches of Christ in WA, Local clergy, statutory authorities, media. 6. EXTENT OF AUTHORITY Exercises spiritual and disciplinary authority over all members, subject only to the authority of the eldership in matters relating to the pastor’s own conduct. Manages day-to-day resources as required to meet objectives within limits agreed by the Elders and in accordance with the constitution. 7. SELECTION CRITERIA Essential • Appropriate tertiary qualifications • Previous pastoral experience, preferably in a senior role • Compatibility with the ethos and theological position of the Churches of Christ in WA. • A mature but contemporary vision of church dynamics • Current driver’s licence 17 Desirable • Management experience: • Training experience • Computer literacy 8. APPOINTMENT CONDITIONS Length of contract – maximum 5 years Salary – cash component – to be negotiated Allowances – manse, vehicle, phone, study. Non cash benefits Leave – minimum 4 weeks plus 2 weeks study leave Superannuation – 10% of total salary package Long service leave provision – 3 months LSL after 10 years service. Other conditions – to be negotiated. 18 APPENDIX F SAMPLE PERFORMANCE REVIIEW PROCESS SAMPLE PERFORMANCE REV EW PROCESS Performance reviews are often poorly conducted because of lack of clarity and structure in the process. A review should achieve several things: 1. Assessment of performance against agreed and predetermined criteria – usually specified in the job description. 2. An interchange of ideas about future directions and priorities. 3. Setting of goals for the next review period – usually 12 months. 4. Discussion of personal development strategies and goals. In this context a review should be a non-threatening discussion about the role, the individual’s performance in it and an opportunity to clarify issues. The review IS NOT an occasion for dissecting faults and analyzing weaknesses ! Any shortcomings should be addressed in a different forum as the year progresses and as they arise – it is unhealthy and unnecessary to accumulate such issues until a review is undertaken. Some sample headings for a review discussion are as follows: 1. Achievements during the review period. 2. Non-achievements – with frank discussion on reasons. 3. Review desired outcomes with actual – did we meet the goals? 4. What are the key goals for the coming period? 5. Does the job description require an amendment? 6. What areas of personal development are to be worked on? 7. What training is needed? 8. What new resources are needed and how will they be generated? SALARY REVIEW This should be conducted separately from the performance review. Discussion should involve consideration of • Cost of living increases • Industrial trends – national awards etc. • Special needs • Special allowances An agreed position should then be reached on any appropriate changes. This review SHOULD NOT be used as any form of punitive measure. 19 APPENDIX G STAFF LEAVE APPLIICATIION AND RECORD STAFF LEAVE APPL CAT ON AND RECORD ABC COMMUNITY CHURCH OF CHRIST To be completed prior to annual leave being taken and retained in the church personnel files. *Also to be completed after sick leave is taken. NAME OF APPLICANT DATES OF LEAVE from to (inclusive) TOTAL LEAVE DAYS TAKEN TYPE OF LEAVE: (CIRCLE) annual sick other Action (initial when complete) Senior Pastor advised Management advised (Treasurer) Leave bonus noted Records adjusted Filed Any remarks/comments Form date 05/2003 20 APPENDIX H SAMPLE EMPLOYMENT RECORD SAMPLE EMPLOYMENT RECORD 1. s Minister' Personal Details: Name: ……………………………………… Date of Birth: …………….… Tax File No: ………..…….… Name of Spouse ……………………………. Names of Dependent children and Dates of Birth:- 1..………………..…… ……/… /…… 2.……………………… .…../…./…… 3 ………………..…… …../…../…… 4.………………………. …../…./…… 2. Record of Employment: Employment commenced: ………………………. Length of initial term: ...……… ………… Extensions approved: ……………………………………….. (Date & Period of extension)……………………………………….… …………………………………………………………... Employment Concluded: ……………………………………… 3. Employment Agreements: Dates on which agreement negotiated/approved. Total weekly remuneration:- i) …………………………………… $ …………… ii) …………………………………… $ …………… iii) …………………………………… $ …………… 21 APPENDIX I RIISK MANAGEMENT CHECKLIIST R SK MANAGEMENT CHECKL ST COCWA, Youth Vision and KidsVision recommend that churches implement ChildSafe, which has integrated risk management processes. ChildSafe is not just for children’s activities, but can be used for all church programs. COCWA has negotiated a licensing deal for ChildSafe. Contact the COCWA office for further information or to join the scheme. Information on ChildSafe can be obtained from www.childsafe.org.au. (SPECIAL EVENT) NOTE: – this is a guide only and is not exhaustive. It gives an idea of the issues to be considered and the questions which MUST be answered if good risk management is to be demonstrated. 1. Who is involved in this activity? 2. What will they be doing? 3. Who has overall responsibility? 4. Are there any potentially dangerous/injurious activities? List them with possible hazards. 5. Are the venues hazardous in any way? If so what are the hazards and how will they be addressed? 6. Is travel involved? 7. If travel is involved who else has a full briefing on the itinerary and procedures? 8. What insurance cover is in place or is required? 9. Does any formal approval need to be given by other authorities (eg Council?) 10. Are minors involved (under – 18’s) 11. Is parental consent required? 12. Do emergency services need to be advised? 13. Is first aid a consideration and if so who is responsible for its provision? 14. What plans are in hand to deal with accidents? 15. Can emergency services access the venue? 16. Has equipment been tested if necessary? 17. Have relevant people been trained in the use of equipment? 18. Do any participants have special needs? if so, what? and how will they be addressed? 19. If a remote site – what communications are available in emergencies? 20. Have clear instructions been issued for emergency/incident procedures? 22 APPENDIX J FRIINGE BENEFIITS FR NGE BENEF TS 1. INTRODUCTION The Fringe Benefits Tax Assessment Act (1986) was brought into being to tax the provision of non-cash employment benefits. That is, the provision by employers of such things as motor vehicles, housing, subscriptions and other ' . fringe benefits' extras' The Act requires the employer to pay a tax on such ' . However, Section 57 of the Act exempts the church from payment of Fringe Benefits Tax where:- " (a) the employer of the employee is a religious institution and (b) the employee is a religious practitioner and (c) the benefit is not provided principally in respect of duties of the employee other than - (i) any pastoral duties or (ii) any duties or activities that are related directly to the practice, study, teaching or propagation of religious beliefs". (Quoted from the Act) religious practitioner' A' means a: a) minister of religion b) student at an institution who is undertaking a course of instruction in the duties of a minister of religion c) full-time member of a religious order, or d) student at a college conducted solely for training persons to become members of religious orders (extract from Taxation Ruling TR 92/17) In practice then, this means that a church can offer non-taxable Fringe Benefits to its minister (and to others who meet the strict conditions), without having to pay Fringe Benefits Tax on goods or services which are directly related to their ministry work., thus effectively increasing the value of the minister' s remuneration package at no cost to the church. In allowing this, the Act recognises the contribution that the church and minister make in service to the wider community. The FBT exemption is available to churches in relation to their employment of full or part time ministers, youth workers, pastoral assistants, student ministers, and educators (within the context of ministry). Note that the exemption does not cover Administrators, Secretaries or Caretakers. 23 2. EXEMPT FRINGE BENEFITS Examples of fringe benefits that are tax exempt include, but are not limited to: Housing expenses: Mortgage payment Repairs and maintenance Rates and Taxes Furnishings Insurances Telephone Electricity & gas Motor vehicle expenses: Registration Insurance s Driver' licence & RAC membership Repairs & running expenses (petrol, oil, tyres) Loan repayments & lease payments Purchase of vehicle Personal Expenses: Life insurance Personal superannuation Health insurance Unrecouped medical, dental, hospital expenses School fees and text books Professional development expenses: Books, journals, newspapers, tapes, stationery Seminars, conferences, continuing education Study leave Office equipment 3. FRINGE BENEFIT AND PAYMENT SUMMARY (Group Certificate) REPORTING: payment summaries' (Note that group certificates have been replaced by ' since June 2001.) Though payment summaries' require the value of fringe benefits provided to an employee to be recorded, this requirement does not apply to the provision of exempt benefits for ministers. As the benefits provided by churches to their ministers are exempt benefits, churches are therefore not required to record the value of these exempt s benefits on the minister' payment summaries. 24 4. S TS FRINGE BENEFITS - INCLUDING DO' AND DON' FOR TREASURERS AND MINISTERS There are, at the outset, two fundamental points to be noted in the consideration of this subject. Firstly, and of paramount importance to those who are called to ministry in the Christian Church, is the advice given by the Apostle Paul in a number of places to be "above reproach" and "blameless" in all our relationships with the world in which we live. The second principle is the need for each individual to obtain accurate advice relating to his or her own circumstances from a qualified tax agent and/or the Tax Office. Whilst the Church is exempt from paying FBT, where the benefit provided enhances ministry activity, it is still not exempt from Audit to ensure compliance with the Act. With the system of self assessment in taxation matters, it is not a case of considering "ÍF" we are audited, but "WHEN" we are audited, churches need to be properly prepared to be sure we are complying with the Act. In terms of the Act, employees who could receive benefits that are exempt from FBT include: - Ministers and Assistant Ministers - Youth Ministers - Full Time Educators in the ministry area But NOT EITHER FULL OR PART TIME - Administrators - Secretaries - Caretakers. If Fringe Benefits are provided to the latter group of people, then FBT is payable by the employer (the Church) and returns and payments must be submitted to the Taxation Office. It is noted that superannuation contributions DO NOT at any time attract FBT. Fringe benefits beyond the scope of those listed should be avoided to eliminate possible breach (even though unintentional) of the Act and rendering the Church liable to pay FBT (and penalties if the breach is uncovered in an audit situation). Further, restriction of benefits to the scope listed would ensure that the high moral tone required of the Church in the community would be maintained. Penalties involved in the provision of questionable benefits make it clear that they should be avoided altogether. COMPONENTS - Where Provided In order to maximise the value of the remuneration package provided to a minister, allowances should not be paid. Rather, fringe benefits should be provided as part of the package. 25 The reason for this is that for taxation purposes, allowances paid to a minister form part of income and are subject to income tax in the hands of the minister. On the other hand, benefits provided within the guidelines set out in this booklet are exempt both from income tax and fringe benefits tax. An allowance is an amount paid to an employee (in this instance, the minister) to cover an estimated expense. The employee does not have to account to the employer as to how the money is spent. Neither does the employee have to return any unspent portion to the employer. Most if not all the benefits provided by the church to the minister would constitute reimbursements. A reimbursement is an amount paid to an employee to compensate the employee for the exact amount of an expense incurred. The amount will still be a reimbursement if it forms only a proportion of the total cost. The main s criterion is that there is accountability on the employee' part. s For example, the agreed amount of a minister' book component may be $400 for the year. The minister may in fact spend $600 on reference material but be reimbursed for the agreed sum only. He must account to the church for how the $400 was spent by providing receipts etc. In this way, the reimbursement of the $400 will be treated as a benefit falling within the FBT law. All expenses paid s for through the Minister' Fringe Benefit Account must be subject to this form of accountability. If the minister simply gets paid $400 without having to account for the money (eg. He may spend less than $400 and keep the difference), then the payment is an allowance for income tax purposes. The church is then liable for PAYG tax (PAYE under the old tax system) on that $400 and the amount must also be s included on the minister' payment summary (the equivalent of a group certificate, as from 1 July 2001). FRINGE BENEFITS As stated above, fringe benefits should, in order to ensure that they remain exempt under the Act be capable of demonstration that they enhance the pastoral ministry of the Minister. It is essential that they should be carefully documented BEFORE they are provided. IMPROPER USE OF FBT The provision of excessive benefits, rather than cash, can lead to improper situations and major adverse publicity when exposed through tax audit to the community at large. Every local church (including the minister) has the obligation under God to avoid bringing the name of the church into disrepute through improper use of the fringe benefit exemption provisions. 26 TYPES OF FRINGE BENEFIT - (a) Provision of a Manse This is the most common fringe benefit which has been traditionally provided by churches, but this occurs less frequently in recent times (b) Provision of House Payments/Rental Where no manse is provided, there are two alternatives: i) either the payment of all or part of housing loan instalments, directly to the s minister' finance provider, or ii) payment of all or part of the regular rental on the minister' s accommodation, directly to the landlord. It is simple to cost this benefit and to then determine the extent to which a benefit can be paid. (c) Motor Vehicle Benefits It is usually beyond the reach of most churches to purchase a motor vehicle for its employees, however, it is still appropriate for the church to provide fuel, maintenance and running costs. This can be based upon actual cost OR a predetermined limit. Costs which can be covered include:- Registration Maintenance Fuel, oil and tyres Insurance and licence RAC membership NB. In this case, the employee can still claim a depreciation component for his vehicle as a deduction in his/her personal tax return - but obviously not the running costs which have been met by the Church. A viable alternative is for the church to lease a vehicle for the minister(s). (d) Paid Study Courses and Materials Study courses are many and varied, encompassing part time or full time courses, correspondence courses and seminars. Costs should be pre-budgeted and included as part of the total remuneration package. If a course is substantial in cost and will have an extended benefit to the Minister and the church, its "package cost" can be spread over a number of years. Eg. To the end of the current appointment. 27 s (e) Books for the Minister' Library Most ministers have historically been paid a book allowance which they then have to substantiate for taxation purposes. The church may provide a benefit for the purchasing of books and research materials directly for the Minister, up to an agreed annual amount. Where this is done the minister must take care not to include a depreciation claim for the provided books in the personal Taxation Return as this would be seen as "double dipping". (f) Travel to Enhance Ministerial Practices The provision of travel for "ministry related matters" is an acceptable fringe benefit. However, care needs to be taken to ensure that the primary purpose of the travel is for "ministry related matters" and not entertainment or recreation. To this end, travel diaries should be maintained and a formal written report should be presented to the church, covering what has been accomplished in the course of the travel provided. This type of fringe benefit is difficult to price and substantiate for the Taxation Office, so care needs to be taken with documentation. (g) Telephone It has long been a practice to provide telephone rentals and business calls for a minister. It is however, appropriate to set a pre-determined limit within the annual package for the church to meet the total phone bill. Ministers to reimburse for private calls. s Church office telephones are the church' financial responsibility and should not be considered as part of this benefit. (h) Subscriptions to Ministry Associated Organisations An annual limit may be set for subscriptions to cover membership of Evangelical s Associations, Minister' Fraternals, Journals and Book clubs, etc. Subscriptions which should be avoided are typically secular journals and membership of service clubs which may be considered to be outside the exemption conditions of the fringe benefit legislation and therefore, difficult to justify. (i) Record Keeping Requirements Ministers who wish to be provided with non-cash benefits, must undertake to keep good records. This is necessary to ensure that the church meets its obligations under taxation laws. Record keeping is also vital to enable churches who are registered for GST to claim back input tax credits included in the cost of benefits provided to ministers. The Salaries Review Committee has recommended that all GST credits claimed back on the Minister’s Fringe Benefit Account be added back to that account. We strongly suggest that ministers fill in a Minister’s Fringe Benefit Account Summary on a monthly basis to assist church treasurers in managing the churches'GST obligations. 28 S TS 4.1 DO' AND DON' FOR TREASURERS DO'S 1. Do open a separate bank account, styled (church name) Minister’s Fringe Benefit Account. 2. Do agree on the proportion of the salary package to be transferred to the Bank Account 3. Do pay cheques for accounts covered in the listing provided, or if not listed, accounts which come under the scope of the Act. 4. Do transfer funds on a weekly or regular basis as agreed with your minister. 5. s Do ensure that private cash withdrawals are included in the Minister' Statement of Earnings. 6. Do have "Minister’s Fringe Benefit Account" audited annually. DON'TS 1. Don't pay cash cheques from the account without adequate documentation 2. Don't include any of the amounts passing through the Minister’s Fringe Benefit Account in his/her Statement of Earnings (save those amounts mentioned above). S TS 4.2 FRINGE BENEFITS - DO' AND DON' FOR MINISTERS DO'S 1. Do assist the Treasurer 2. Do agree on the proportion to be transferred to the special account. Usually this should not be more than 50% of your package. 3. Do submit only those accounts which apply. 4. Do keep diary notes, receipts and documents. Remember, the church pays, if you do the wrong thing. DON'TS 1. Don't abuse the system 2. Don't get reimbursed for expenses if you can help it. Try to get accounts paid direct. 3. Don't lose dockets 4. Don't "double dip" ie. If your expenses are paid by the church, do not claim them on your Tax Return as deductions. 29