Scully v Northamptonshire County Council
Summary for Direct Payment Practitioners Supporting Direct Payment Employers
The Employment Appeal Tribunal have handed down judgment in this case which questioned whether the claimant PA, Mr Scully, was employed by the local authority or by his brother (the care recipient) under a direct payment arrangement. Find the full judgment here.
Background
- Mr Scully provided care to his adult brother (“S”), who has a learning disability.
- Care was funded via direct payments issued by the local authority under the Care Act 2014.
- Mr Scully claimed he was employed by the local authority and brought claims for race and disability discrimination and unpaid wages.
- The employment tribunal at first instance found that Mr Scully was not employed by the council but by his brother (or his mother acting on his behalf) which was appealed.
Appeal Grounds
Mr Scully argued the tribunal erred by:
- Failing to consider the statutory purpose of the Care Act 2014.
- Overlooking the possibility that his brother lacked capacity to enter into an employment contract.
He also raised broader arguments, including:
- That direct payments did not meet statutory requirements.
- That the council retained control and thus was the true employer.
- That employment must be implied due to regulatory or trust law considerations.
Tribunal Findings (Upheld on Appeal)
- Direct payments were lawfully made to S or his family from 2013.
- Mr Scully received payslips naming S as his employer.
- The family arranged cover, managed recruitment, and made employment decisions.
- The council did not supervise, train, or manage Mr Scully.
- No evidence was provided to prove S lacked capacity to contract.
EAT Decision
- The tribunal made no error of law and was entitled to conclude there was no employment relationship between Mr Scully and the council.
- The Care Act 2014 explicitly allows local authorities to discharge duties via direct payments.
- No contract of employment (express or implied) existed between Mr Scully and the council.
- The appellant’s arguments about trust law, regulatory compliance, and capacity were either unsupported by evidence or legally irrelevant.
Key Takeaways for Local Authorities
- Direct payments, when properly administered, do not create an employment relationship between the council and the personal assistant (PA).
- The recipient (or their authorised representative) is the legal employer, even if the council provides payroll support or advice.
- Councils should ensure clear documentation and support for recipients to understand their employer responsibilities.
- Capacity concerns must be evidenced and addressed through appropriate legal mechanisms (e.g. authorised person under s.32 Care Act).
- Employment tribunals will not imply a contract of employment with the council unless the facts meet the legal test of necessity or the working relationship suggests otherwise.
ILG viewpoint
This case is a welcome addition to a body of case law that addresses the relationship between PAs and the local authority when a direct payment is provided under provisions of the Care Act.
The case speaks to concerns about the capacity of DP recipients alongside the degree of separation between a Local Authority and employed PAs. It further establishes that any employment occurring when a direct payment has been granted, is not the responsibility of the local authority. This remains the case when the local authority appoints an agent to manage payroll and provide support services to the budget holder. However, caution should be taken to ensure that sufficient information is issued to the budget holder explaining their responsibilities. Further, the local authority must ensure the budget holder retains full control of all employee management activities. Local authorities who do not properly administer the DP and take a controlling stance on the management of PAs are at greater risk of being found to be the employer.