In a significant case for local authorities and HR professionals involved in care provision, the Employment Appeal Tribunal (EAT) in Scully v Northamptonshire County Council [2025] EAT 83 clarified how employment status should be determined when carers are paid through direct payments under the Care Act 2014.
This decision reinforces that the source of funding is not the same as being the employer, and it sets out important principles and practical steps to avoid costly disputes.
Legal Context: Direct Payments and the Care Act 2014
Under the Care Act 2014, individuals with eligible care needs may receive direct payments from their local authority, enabling them (or someone acting on their behalf) to arrange their own care services. This model is intended to increase autonomy—but it also introduces legal complexities, particularly regarding who employs the carer.
Case Summary: Scully v Northamptonshire County Council
Mr. Scully worked as a carer for his brother, who received care funding via direct payments from the council. A dispute arose over who employed him: the local authority (which provided the funds) or his brother/family (who directed the day-to-day care).
The EAT found:
Payslips named Mr. Scully’s brother—not the council—as his employer.
Day-to-day decisions, such as arranging cover or dismissing carers, were made by the brother’s family.
The council provided funding and some administrative support (e.g., via a third-party payroll service) but did not train, supervise, or manage Mr. Scully.
There was no implied or express contract of employment between the council and Mr. Scully.
The council's statutory duties do not make it the employer when direct payments are in place.
Even if the care recipient lacks capacity, this does not automatically transfer employer responsibilities to the local authority. An authorised representative can still act as the employer under the framework of the Care Act.
Practical checklist for HR professionals and local authorities
To avoid misidentifying the employer in similar arrangements, HR professionals should:
Review care arrangements funded by direct payments to confirm the legal employer.
Check payslips and employment documentation to ensure the employer is clearly named.
Assess who exercises control over recruitment, training, supervision, and dismissal.
Ensure all HR responsibilities are allocated to the correct party—usually the care recipient or their representative.
Consider statutory duties under the Care Act 2014 but recognise they don’t equate to employer status.
Maintain clear records of contracts and employment relationships.
Recognise the risk of inadvertently becoming the employer by exercising too much control or involvement.
Risk management tips
Avoid providing day-to-day supervision, performance management, or disciplinary input to carers funded by direct payments.
Document any advice or support given, ensuring it is framed as guidance only and does not stray into employer-like responsibilities.
Review arrangements regularly, especially when there are concerns about the care recipient’s capacity, to ensure compliance and proper authorisation.
Conclusion
The Scully case is a clear reminder that funding care does not make you the employer. For HR teams working in local authorities or supporting individuals managing direct payments, it's essential to establish clear boundaries, proper documentation, and ensure that all parties understand their respective roles.
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