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IN THE SUPREME COURT OF JUDICATURE EATRF 98/0492/3

IN THE COURT OF APPEAL (CIVIL DIVISION )

Royal Courts of Justice

Strand, London W2A 2LL

Friday 26th March 1999

B e f o r e

LORD JUSTICE STUART-SMITH

LORD JUSTICE POTTER

LORD JUSTICE BROOKE

VALERIE ROWLANDS Respondent

v.

CITY OF BRADFORD METROPOLITAN DISTRICT COUNCIL Appellant

(Computer Aided Transcript of the Stenograph Notes of

Smith Bernal Reporting Limited, 180 Fleet Street

London EC4A 2HD Tel: 0171 421 4040

Official Shorthand Writers to the Court)

MR MARTIN KURREIN (instructed by Legal Services, Bradford Metropolitan District Council) appeared on behalf of the Appellant (Defendant).

MISS RACHEL CRASNOW (instructed by Commission for Racial Equality, London SW1E 5EH) appeared on behalf of the Respondent (Plaintiff).

J U D G M E N T

(As approved by the court)

LORD JUSTICE STUART-SMITH: This is an appeal by leave of Lord Justice Beldam against a decision of the Employment Appeal Tribunal given on 20 November 1997, whereby they dismissed the appellant's cross-appeal and held that the relationship between the local authority and a foster carer is one of employment within the meaning of the section 78 of the Race Relations Act 1976.

The matter arose in this way. The applicant, the present respondent, was employed as a race equality officer with the West Yorkshire Race Equality Council. In the course of her employment she provided assistance and advice to people complaining of race discrimination, and accordingly in the course of her employment frequently appeared before industrial tribunals as an advocate on behalf of various applicants. One such applicant was a Mrs Amos-Abanyie (who was referred to as Mrs Amos) who had brought proceedings against the appellant council ("the council"). In the course of those proceedings the claimant, Ms Rowlands, came into contact with somebody called Michael Stow, who was the council's assistant director of Social Services. It appears that they did not get on very well, though the reasons for that do not appear.

Subsequently to that Ms Rowlands was minded to become a foster carer with the council. Apparently there are two processes by which that can come about. One was called the "fast track", which was usually, but not exclusively, reserved for blood relations. The other was a longer process to see whether or not the potential foster carer was suitable. The council started off using the fast track system but they then changed their minds and they told Ms Rowlands that it would take longer than she had initially expected and that they were going to require her approval to be subject to independent assessment. Ms Rowlands objected to that. The council replied to her letter of objection but it did not meet her objection. She wrote again and she did not get satisfactory replies. So she brought a complaint alleging racial discrimination. She herself is white but by virtue of the provisions of the Act it is possible for somebody in her position to claim under the Act. That is what she did.

When the matter came before the Industrial Tribunal it was submitted that the council had no case to answer. That was because it was contended by them that they had initially treated her more favourably than anyone else by applying the fast track to her and that, because they were thereafter somewhat dilatory or postponed matters, that could not be said to amount to discrimination. The Industrial Tribunal accepted that submission and therefore dismissed her case.

She then appealed to the Employment Appeal Tribunal. The Employment Appeal Tribunal disagreed with the Industrial Tribunal on that point.

In both tribunals below it had been necessary to consider whether under section 78 of the Race Relations Act 1976 the potential or actual relationship between the foster carer and the council was one of employment. Section 78 of the Act provides:

"In this Act, unless the context otherwise requires-

´employment' means employment under a contract of service or of apprenticeship or a contract personally to execute any work or labour, and related expressions shall be construed accordingly;

´profession' includes any vocation or occupation."

Both the tribunals below rejected the council's submission that the relationship of foster carer and council was not one of contract. The submission briefly was that it was a statutory scheme and there were features which were wholly inappropriate to the ordinary concept of contract.

As I say, that submission was rejected. But subsequently to the Employment Appeal Tribunal's decision this court, in a case called W and Others v. Essex County Council [1998] 3 W.L.R. 534, held that the relationship was not one of contract. That was a case where foster parents were suing the council both for breach of contract and for alleged negligence for breach of duty of care. This court unanimously held that there was no contractual relationship between the foster parents and the local authority. The other ground of decision in that case (in which the court was divided) is not relevant to this appeal.

In the course of my judgment at page 550 at paragraph 50 I said this:

"There are, in my judgment, a number of reasons why the plaintiffs' claim in contract must fail. First, although the Specialist Foster Carer Agreement had a number of features which one would expect to find in a contract, such as the payment of an allowance and expenses, provisions as to National Insurance, termination and restriction on receiving a legacy or engaging in other gainful employment and other matters to which the judge referred... I do not accept that this makes the agreement a contract in the circumstances of this case. A contract is essentially an agreement that is freely entered into on terms that are freely negotiated. If there is a statutory obligation to enter into a form of agreement the terms of which are laid down, at any rate in their most important respects, there is no contract: see Norweb Plc v. Dixon [1995] 1 W.L.R. 636, 643F."

I then went on to deal with various other matters which bore upon the question, but it is not necessary to cite extensively from that case.

Mr Kurrein, who appears for the appellant council, has also drawn the court's attention to various provisions to be found in the schedule to the Children and Young Persons, The Foster Placement (Children) Regulations 1991, SI 1991 No.910, which deal with questions of information as to prospective foster parents and members of their household, which deal with questions of religious persuasion, racial origin and matters of that sort; also, in Schedule 3, matters of obligation to be covered in the foster placement agreement, which relate to such matters as the child's personal history, religious persuasion and cultural and linguistic background and racial origin. These are matters which, Mr Kurrein says, reinforce the view taken by this court in the W v. Essex case that the foster parent/local authority relationship is not a contractual one because of the nature of the obligations and so on, which are between the parties.

It has been accepted by Miss Crasnow on behalf of Ms Rowlands and the Commission for Racial Equality that, in the light of the decision of this court, this appeal was bound to succeed and I agree that that concession was rightly made.

For those reasons the appeal will be allowed.

LORD JUSTICE POTTER: I agree.

LORD JUSTICE BROOKE: I agree.

Order: Appeal allowed with costs.