Appeal Court finds foster carers to be employees

The claimants in Glasgow City Council v Johnstone responded to an advertisement for fostering services on behalf of a local authority. This represented a new treatment for fostering young people which differed from usual arrangements. The differences were as follows:

• unlike other foster carers, those under this scheme received a professional fee regardless of whether they had any current placements
• carers had to complete a rigorous training programme
• they also had to attend meetings and further training even when not caring for children
• could only take holidays outside of placements and
• could not be in any other paid employment.

There was, however, some flexibility in the arrangement. Carers did not have to automatically take all children they were told to by the authority, but they did have to justify why they were refusing some over others. The terms of the foster caring arrangement were outlined in an agreement signed by both parties. This agreement referenced a separate payment policy, which referred to carers as ‘self-employed’.

After a number of years operating under this agreement, a dispute arose between the claimants and the local authority. The claimants argued that they had been subjected to a detriment as a result of making a protected disclosure, when they had claimed the authority had denied them urgent specialist support in caring for a child with mental health concerns. They later sought to bring this claim to the Employment Tribunal (ET), alongside unlawful deduction from wages, however the local authority argued the claims should be struck out as the claimants were not employees or workers and therefore not protected under the law.

A preliminary hearing was held by the ET to determine the employment status of the claimants. They concluded that the claimants had entered into contractual arrangements with the authority to receive an annual salary, were subject to considerable day-to-day control, and were prohibited from taking other employment.

Having found this, the ET went on to conclude that the claimants were not just workers, but actually employees. In forming their decision, they outlined that the degree of control placed upon the claimants meant that they were clearly obliged to perform work personally for the organisation. The local authority appealed to the Employment Appeal Tribunal (EAT).

The EAT dismissed the appeal. They also began by addressing the terms of the agreement, finding that whilst a lot of the terms were simply outlines of statutory obligations placed on foster carers, additional terms on the financial arrangements between the two, and powers of mutuality and control, went further than this and suggested employment.

They went on to outline that, in situations where a local authority narrates the terms for which they are willing to authorise individuals to be foster carers, and these terms involve exercising control over their provision of this service, it will be up to tribunals to determine if there is an employment relationship.

It is important to remember that this outcome applies only to foster carers who work under the specific arrangement described; this is not necessarily how all foster carers operate.

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