Scully v Northamptonshire County Council
Scully v Northamptonshire County Council [2025] EAT 83
Facts
Parties and Complaint: Mr Kieron Dominic Scully (Appellant) brought complaints of race and disability discrimination, and claims for arrears of pay, asserting that Northamptonshire County Council (Respondent) was his employer.
Care Arrangements: The complaints stemmed from arrangements for the care of Mr Scully's brother, "S", an adult with a learning disability. Mr Scully provided care and support to S.
Funding Mechanism: Mr Scully was paid for his work using sums provided by the Council in the form of direct payments under the Care Act 2014.
Employer Identity Dispute: It was undisputed that Mr Scully worked under a contract of employment, but the Council denied being his employer.
Tribunal Findings: The Employment Tribunal (ET) found that from April 2013, S (or V acting on his behalf) controlled his budget and the family received direct payments to fund S's care. Mr Scully had an express contract of employment with S, and his payslips named S as his employer. S's mother ("V") was responsible for arranging cover, making decisions about engaging carers, and once dismissed a carer. The Council did not provide training, appraisals, or manage Mr Scully's performance. The ET concluded that the evidence pointed to Mr Scully being employed by S or V acting on S's behalf, not the Council, and dismissed all complaints. The ET noted "significant doubt" about S's legal capacity but made no finding on it due to lack of medical evidence.
Grounds of Appeal: Mr Scully appealed on two main grounds: (i) the ET failed to consider the underlying statutory purpose of the Care Act 2014, and (ii) the possibility that his employment contract with S might have been vitiated due to S's lack of capacity to contract. He argued that had the ET done so, it would have concluded the Council was his employer.
Held
The Employment Appeal Tribunal (EAT), presided over by Lord Fairley, refused Mr Scully's appeal.
The EAT held that the employment tribunal had not erred in law.
The tribunal was entitled, based on the evidence it accepted, to conclude that there was no contract of employment—express or implied—between Mr Scully and Northamptonshire County Council during the relevant period.
Comment
Lord Fairley's analysis provided several key insights into the decision:
Validity of Direct Payments and Statutory Purpose: The EAT rejected Mr Scully's argument that the Council could not discharge its statutory duty through direct payments. It affirmed that making direct payments is an explicitly identified method under Section 8(2) of the Care Act 2014 for a local authority to meet care needs. The purpose of direct payments is to give the individual control and autonomy over their care.
Identity of Employer and Implied Contract: The EAT found no basis in the tribunal's factual findings for an employment relationship between Mr Scully and the Council. The existence of an express contract between Mr Scully and S, where S controlled his budget and family members (like V) managed care arrangements, was consistent with the statutory scheme. The EAT clarified that implying a contract of employment between Mr Scully and the Council would require a test of "necessity" to explain the parties' actions.
Distinction from South Lanarkshire Council v Smith: The EAT distinguished this case, relied upon by the appellant, noting that its reasoning on "control" was superseded by James v. Greenwich London Borough Council, which focuses on "necessity" for implied contracts. Furthermore, South Lanarkshire Council involved a different statutory framework and significant retention of control by the local authority over care provision (e.g., advertising, interviewing, training), which was not present in Mr Scully's case.
S's Capacity to Contract: The EAT agreed that S's capacity was a matter requiring medical opinion evidence, which was not presented. Even if S had lacked capacity, the express contract would have been voidable, not void. Crucially, the tribunal's findings about V's significant role in arranging S's care removed any necessity to imply a contract between Mr Scully and the Council.
Lawfulness of Care Provision: The EAT dismissed the argument that Mr Scully's care provision would be unlawful unless he was a Council employee. It confirmed that the services provided by Mr Scully to S were excluded from the scope of "regulated activities" under the Health and Social Care Act 2008 (Regulated Activities) Regulations 2014.
Trust Law: The EAT found Mr Scully's submissions regarding trust law irrelevant, stating that even if a direct payment recipient were a trustee, it would not prevent them from being an employer or necessitate the local authority being the employer.
EAT's Role: The EAT reiterated its role is limited to correcting errors of law, not re-trying factual assertions unsupported by the tribunal's findings. The tribunal's unchallenged factual findings supported its conclusion.
