A vicar has lost his claim for unfair dismissal against his Church of England diocese, as the courts upheld church law that implies he is 'employed by God'.

The Bishop of Worcester, John Inge, said the ruling meant clergy will retain 'freedoms' that they would lose if considered to be employees under the law rather than 'office holders' as they currently stand.

Rev Mark Sharpe joined the Worcestershire parish Teme Valley South in 2005 with his wife and four children, but left in 2009. He claims he was the victim of a hate campaign and had his post tampered with, his dog poisoned and his car tyres slashed.

He claimed to have experienced health problems as a result of the situation.

Supported by trade union Unite, he brought an unfair dismissal claim against the bishop, arguing that he should have been warned about the situation in the parish.

However the church has defended itself using ecclesiastical law, which states that vicars are not employees and so exempt from employment regulations.

Sharpe had previously won his case in 2013. Unite said at the time that the harassment experienced included: "the tyres to Rev Sharpe's car being slashed twice; the poisoning of a pet dog; the theft of central heating oil three times; his family being sworn at; his post being tampered with: and his internet and phone connections being cut. Because of constant prowlers, CCTV cameras were installed at the rectory."

However the CofE took the case to the Court of Appeal, which ruled this week.

The Bishop of Worcester, Rt Rev Dr John Inge described Rev Sharpe's experiences in his parish as 'disheartening'. However he said of the court ruling, "We are delighted that the Court of Appeal has taken this view of the matter. There has been considerable consultation with the clergy on this issue as well as discussions at General Synod, and clergy have consistently said that they don't wish to change their status as office holders.

"To become employees, clergy would lose the freedoms which are at the heart of the Church's ministry and this is not something that they want to give up.

"It is regrettable that UNITE fails to understand the context in which parish clergy exercise their ministry whilst the Church seeks to uphold the freedoms enjoyed by its clergy."

He also said that other vicars in that parish had not had negative experiences. "I am encouraged to note that the clergy who have ministered in these churches both before and since Mr Sharpe's appointment have all spoken very warmly of the people there and their experience doesn't reflect any of the negativity that Mr Sharpe claims to have faced."

Unite has been fighting for church workers to be given employment rights under law. There are other pending tribunal cases against the CofE from vicars. Canon Jeremy Pemberton is fighting a decision to block his appointment as a hospital chaplain following his marriage to another man.

A Unite spokesman gave a statement regarding yesterday's ruling, "We are deeply disappointed by this judgement which looks back over 800 years to the Magna Carta and historical texts from when the Holy Roman Empire was formed to overturn the decision of an employment appeal tribunal in the present day. This judgement has serious ramifications for faith workers in accepting that aspects of the law of the land don't cover the church. We will be considering the judgement fully and deciding on our next steps over the coming days."