Last month senior traffic commissioner (TC) Richard Turfitt issued many draft changes to the statutory documents that give guidance and directions to TCs and also provide useful information for drivers, transport managers and operators.
The TCs’ stated aim is to “promote fair, efficient and reliable transport of goods and passengers and deliver a modern, effective operator licence regime that ensures operators are fit to hold a licence while minimising the regulatory burden on the compliant”. The statutory documents aim to set out how this is carried out.
This is to ensure all aspects of O-licensing are processed and managed by the Office of the Traffic Commissioner (OTC) in a manner that is transparent, fair to all, consistently applied and where operators know where they stand.
The current set of documents has been reviewed and additions have been proposed, including material relating to good repute, finance, transport managers, legal entities, fronting, operating centres and impounding, among others. Included in the amendments, which are subject to an ongoing consultation, is the addition of material about self-employed driver status.
It is commonplace for companies to say a driver is self-employed when this is not the case. This issue has been a significant concern in the sector for some time: businesses may knowingly be avoiding HMRC obligations and rights that drivers would have as employees or workers - so gaining an unfair commercial advantage - or they may not understand employment law in this area and the way HMRC views matters.
The senior TC’s view of self-employed status, in broad terms, is summarised in new guidance: “In general someone is self-employed if they are in business on their own account and bear the responsibility for the success or failure of that business. Conversely, they will be employed if they personally work under the control of their engager and do not run the risks of having a business themselves.”
On the employment status of drivers, the senior TC states: “…haulage operators are wrongly treating workers as self-employed or are hiring workers through their own companies in ways that are not compliant with tax laws and therefore, not fair competition among other operators… in road haulage it is rare for someone to be genuinely self-employed unless they are an owner-driver”.
The draft guidance does not deal with wider employment law issues where an individual is not self-employed but may be either an employee or worker with certain employment rights as flagged up in the recent Pimlico Plumbers case and the Taylor Report. But it does mean operators can expect to have to justify how drivers, other than owner-drivers, can be self-mployed contrary to the HMRC approach.
In certain cases good repute might come into play - TCs do not want operators avoiding their legal and financial obligations so gaining commercial advantage. It is commonplace for any operator to seek a ‘period of grace’.
It will normally occur in one of two situations: either the operator is unable to satisfy the financial standing requirements, and/or has no nominated transport manager. In the latter case it may be because a transport manager has left and cannot be replaced or where he or she has died or been incapacitated.
Operators frequently fail to tackle these issues and need to be proactive by applying for a period of grace when necessary and often situations are allowed to drift. An application must formally be made for the period of grace and it is open to the TC to grant this for up to six months, or nine months in the event of death or physical incapacity.
The documentation has been revised to remind operators that “they are responsible for ensuring they demonstrate the requirement is met prior to the expiry of any period of grace” and that they “should therefore actively manage any dates and request an extension, when appropriate, while remembering that the grant and any extension is always at the discretion of the TC”.
Importantly it goes on to set out the stark consequence of not managing events properly. “If a period of grace expires without the mandatory requirement being met then the TC is obliged to revoke the operator licence.” The issue of Continuing Professional Development (CPD) for transport managers is flagged up in the revised guidance that notes drivers are required to complete 35 hours training every five years to keep their Driver CPC, and that proactive action on the part of transport managers is needed to “develop and enhance their abilities”.
The bottom line is that transport managers should be aware that if they have not carried out two-day transport manager CPC refresher training there will come a time when this will be an issue. It is already commonplace for TCs to raise this in the context of applications and public inquiries that often arise directly or indirectly through a lack of up-to-date knowledge.
The document identifies trigger events where transport managers should now expect to provide “evidence of their capacity to meet the statutory duty through continuing professional development”. These include:
. on initial application when a transport manager has not been specified as such within the previous five years or when a transport manager’s qualification is more than 10 years old;
. on application when a transport manager is proposing to be on more than one licence or when the proposed hours are less than the starting point;
. on renewal of an O-licence; and at a public inquiry when considering whether or not a transport manager has exercised continuous and effective management.
By Tim Ridyard
. Tim Ridyard is a partner and road transport regulatory lawyer at Ashtons Legal. Call 01284 732111 or email tim.ridyard@ashtonslegal.co.uk.
