In this briefing, we discuss a recent decision against Glasgow City Council and a similar claim raised south of the Border where foster carers have been ruled by a tribunal to be employees.
James and Christine Johnston v. Glasgow City Council
A couple, backed by the Independent Workers Union of Great Britain, successfully established in the Glasgow employment tribunal that they are employees of Glasgow City Council. The couple had raised a claim of detriment on account of making protected disclosures and unlawful deduction from wages. These were rights employees or workers have, but the agreement signed by the couple expressly stated they were self-employed.
Historically foster carer agreements with local authorities have been considered not to be contracts. In 2011, the case of Bullock v Norfolk County Council, observed that the relationship between a foster carer and a local authority is governed by statute as the local authority must enter into the agreement on the terms laid down in the statute and cannot freely negotiate. Therefore, although terms such as payment of allowances and expenses are present, it does not mean there is a contract. Similarly, the Court of Appeal held in Rowlands v City of Bradford Metropolitan District Council that a foster carer was not ‘in employment’ for the purposes of a discrimination complaint.
Circumstances of the case - what changed?
The first hurdle was that there must be a contract between parties in order that the foster carers could be regarded as employees or workers for the purposes of the Employment Rights Act 1996. The tribunal analysed the agreement and found that there was a de facto contract between the claimants and respondents in this case.
This was found because the agreement between the Council and foster carers differed from normal foster care agreements. They were referred to as 'elite foster carers' and were based on an 'Oregon model' from the US, offering more generous remuneration than usual foster care agreements. The claimants were under a Multi-dimensional Treatment Foster Care (MDTF) scheme. MTFC carers were viewed as a 'full time commitment' and expected not to engage in other paid employment. The claimants were paid an allowance of £32,000 per annum, and payment was not dependent on whether a child was placed with them or not. There was an express term that the claimants were obliged to accept a placement, and they could only turn it down in exceptional circumstances. Additionally, four weeks' paid holiday (where the foster child would not be present) was provided.
However, the claimants still required to attend meetings and training even when they had no child placed with them. If they had a child placed, an allowance would be paid in respect of the child. The agreement stated various other obligations that the foster carers required to comply with, for example, guidelines on children allowances and household bills. A manual stipulated how they should care for the child. The social work department would provide all essential furniture and equipment to the carers. The Tribunal also noted that Glasgow City Council did have a separate generic foster care agreement.
In light of this, the tribunal went on to apply the traditional tests for employment status. It found that there was a very high degree of control and supervision over the claimants by the council. This went beyond what the statute required of the local authority. Therefore, the Tribunal concluded that the rights and obligations could not be solely or mainly governed by the statutory scheme (which, it did note, may well be the case for 'ordinary' foster carers).
The tribunal found that the provisions of the agreement were entirely consistent with it being a contract of service (i.e. an employment contract), notwithstanding the statement in the agreement that they were self-employed for tax purposes. The circumstances of this case were distinguished from the two previous decisions. The tribunal judge was careful to add that this finding in favour of the claimants should not be taken as a finding about the status of ordinary mainstream foster carers. It was due to the specific facts of the case.
South of the Border ...
A claim has been raised in England by The Independent Workers of Great Britain (IWGB) v Hampshire County Council in which the Claimants – who are 'general' foster carers - will seek to be declared employees and entitled to employment rights. The IWGB are arguing that, unlike the previous Court of Appeal ruling in Rowlands where foster carers were not workers due to the absence of a contract of employment, under EU law contracts are not a requirement of an employment relationship. This claim raises similar points as in Johnston, though with a different factual matrix in more widespread usage in Scottish foster care arrangements. The tribunal will apply the same tests, focusing on the express terms of the agreement, the requirements for training, strict provisions over compliance with care manuals, and the degree of control and supervision exercised by the council over the day-to-day care provided by foster carers.
Foster carers and vicarious liability
The Supreme Court decision in Armes (Appellant) v Nottinghamshire County Council (Respondent) has recently been issued. This case concerned the liability of local authorities for abuse suffered at the hands of the foster carers. The ruling said that the vicarious liability was 'inherent' when the local authority chooses to place a child in their care. The Supreme Court ruled it is not necessary for there to be “micro-management, or any high degree of control”, in order for vicarious liability to be imposed. Therefore councils will bear this risk and liability irrespective of whether or not their foster carers are able to establish employment status.
Going forward – Get in touch
Whilst the particular facts of Johnston were the key for the decision, local authorities should consider a review of their foster care arrangements, and will no doubt wish to keep updated on the outcome of the Hampshire County Council case.
We can assist in reviewing relevant documentation and practices and discussing options to mitigate risk.