Mr and Mrs Johnstone saw an advert in 2010 that stated, “Glasgow needs foster carers to join us in our new treatment fostering service for young people (aged 11-17)”. In the advert, Glasgow City Council offered a “professional fee of £30 160 per annum with significant tax benefits” and “a separate allowance for the young person of £172 per week” and “4 weeks paid holiday a year” .
This advert related to a new model of foster care to be provided by an organisation called Connex MTFC, a joint venture between Glasgow City Council and the NHS. The model was different from that used for ordinary foster care arrangements. The first point of difference was that unlike ordinary foster carers, a MTFC carer was not permitted to be in any other paid employment. It was a full-time commitment. The second point of difference was that they received the professional fee referred to in the advert. This was not paid to ordinary foster carers. This was paid whether or not a child was placed with them. They were required to attend meetings and training irrespective of whether at the time they had a child placed with them. They received a foster allowance if a child was placed with them. This was the allowance paid to ordinary foster carers. Thirdly they were permitted to take their holidays without the child placed with them. Ordinary foster carers were expected to take the child with them on holiday.
The Johnstones applied to become foster parents. After a period of intensive training, they signed an agreement under the Looked After Children (Scotland) Regulations 2009 SI 2009/210. The Regulations require local authorities to enter into a written agreement with foster carers about foster placements. The agreement said that the Johnstones would be paid £30,160 a year, including four weeks’ paid holiday. It also placed them under numerous obligations to the Council.
In the Employment Tribunal
The Johnstones sued Glasgow City Council in the Employment Tribunal (ET). For their main claim to be heard they needed to prove that they were employees of Glasgow City Council. The ET said that the Johnstones were employed by the Council under contracts of employment and allowed their main claims to proceed. Glasgow City Council appealed to the Scottish EAT arguing that the relationship with the Johnstones was based on statute, and therefore non-contractual.
In the Employment Appeal Tribunal
The EAT disagreed with Glasgow City Council on several points. The Court said that the terms of the written document that reflected the matters required by statute – such as the obligation not to administer corporal punishment and the procedure for handling complaints – were non-contractual. The EAT accepted that a contract which mirrors the general law may have independent contractual effect. In this case, the relevant terms were purely designed to provide information. There were other terms in the agreement that did not duplicate obligations or procedures required by statute, namely the terms regarding financial arrangements, powers of control and mutuality of obligations.
The EAT said that the contractual terms pointed towards a relationship of employment. Unlike an ‘ordinary’ foster care arrangement, the Johnstones were paid a substantial fee and not just expenses. And, again unlike ‘ordinary’ foster carers, they were permitted to take a holiday without being required to take the child with them. In addition, Glasgow City Council had a very high degree of control over the Johnstones, for example it required them to give up other employment. They also had to report every day. For these reasons, the ET was correct in concluding that the Johnstones were employees of the Council.
The EAT therefore ruled that the Johnstones were employees of Glasgow City Council. While many of the terms reflected matters that were required by statute, and were therefore non-contractual, the terms regarding financial arrangements and control exercised by the Council were not prescribed by statute and formed the basis of a contract. The payment of a yearly professional fee (over and above expenses), together with the degree of control exercised by the Council, pointed towards an employment relationship.