Glasgow City Council v Johnstone & Anor

A foster-care arrangement required by statute may nevertheless contain a contract of employment. Terms which merely restate statutory duties or provide procedural information do not ordinarily create parallel contractual obligations. However, statutory powers enabling a local authority to make financial and placement arrangements do not prescribe their content or prevent contractual effect.

Whether the arrangement is contractual, and whether it is one of employment, depends on its objective character. Payment which is remuneration for services, mutual obligations, and a substantial degree of control over the delivery of care may support that conclusion. The result is fact-sensitive. No conclusion was reached about ordinary foster-care arrangements.

The claimants were treatment foster carers engaged by Glasgow City Council under a Connex multi-dimensional treatment foster-care agreement. Unlike ordinary foster carers, they received a professional annual fee whether or not a child was placed with them, could not ordinarily undertake other paid work, and were subject to extensive training, reporting and supervisory requirements.

An Employment Judge held that the arrangements were contractual and amounted to contracts of employment. The Council appealed, contending that the relationship was wholly statutory or, alternatively, contractual only as to non-statutory additions. Although the Council did not oppose the claimants' status as workers, employee status remained material to their health-and-safety detriment claims under the Employment Rights Act 1996.

The central issue was whether the statutory fostering framework prevented the agreement from being a contract of employment.

1. Appeal dismissed. The Employment Judge was entitled to hold that the claimants' arrangement with the Council contained a contract of employment. The case was remitted to the Employment Judge to proceed accordingly.

2. Regulation 24 and Schedule 6 of the Looked After Children (Scotland) Regulations 2009 required a written agreement, but its contents were of mixed character. Provisions restating statutory duties, such as duties concerning corporal punishment, confidentiality and removal of a child, were informational or statutory in force. The court found no intention to create separate contractual obligations duplicating those duties.

3. By contrast, Schedule 6 paragraph 4(b) left financial arrangements, including special arrangements, to the local authority and foster carer. The parties' agreement was needed for the arrangement to operate. Its provisions on fees, holidays and tax were characteristically contractual. The placement provisions also permitted agreed obligations and control over how services were delivered.

4. The professional fee was remuneration for fostering services, rather than an allowance to meet the costs of a placement. Together with mutuality of obligation and the Council's very high degree of control over training, reporting and the performance of services, this supported a contract of employment. The control requirement described in Ready Mix Concrete was satisfied.

5. The English foster-care authorities were not binding because they arose under different statutory schemes and English contract law. In any event, they concerned materially different arrangements. They did not require the Scottish agreement in this case to be treated as non-contractual.

6. The court left unresolved the precise boundary between statutory duties and contractual obligations where they overlap. It also expressly declined to decide whether an ordinary foster-care arrangement would amount to a contract of employment.

• Employment Appeal Tribunal: Appeal by Glasgow City Council dismissed. The case was remitted to the Employment Judge to proceed in accordance with the EAT's decision.
• Employment Tribunal: The Employment Judge held that the claimants' fostering arrangement with the Council was contractual and amounted to a contract of employment. The judgment appealed has no citation stated in the judgment.