It is very important for operators to keep abreast of operator licensing developments at all times. The Senior Traffic Commissioner has drafted changes to the Guidance documents governing operator licensing. A consultation closed on 27 August and one can assume they all will come into force. ‘Self-employed’ drivers, ‘periods of grace’ and continued professional development for transport manager are just three areas of note we highlight here.
The need for Continuing Professional Development (CPD) for transport managers (TMs) is flagged up in the revised guidance and indicates that proactive action on the part of TMs is needed to ‘develop and enhance their abilities’. Trigger events, where transport managers should now expect to provide ‘evidence of their capacity to meet the statutory duty through continuing professional development’, have been identified:
The bottom line is that TMs need to be aware that if they have not carried out 2-day transport manager CPC refresher training there will come a time when this will be an issue.
Periods of grace
Very common is the need for operator to need to seek a ‘period of grace’ in two main situations: the operator is unable to satisfy the financial standing requirements and / or has no nominated transport manager. Operators frequently fail to tackle these issues and need to be proactive by applying for a period of grace when necessary. Often situations are allowed to drift. In the case of transport managers it may be because they have left and cannot be replaced or have died or been incapacitated. An application must formally be made for the period of grace and it is open to the Traffic Commissioner to grant this for up to 6 months (9 months in the event of death or physical incapacity).
The documentation has been revised to remind operators that ‘they are responsible for ensuring that they demonstrate the requirement is met prior to the expiry of any period of grace’ and, importantly, sets out the stark consequence of not managing events properly: ‘if a period of grace expires without the mandatory requirement being met then the traffic commissioner is obliged to revoke the operator licence.’
Businesses often say a driver is ‘self-employed’ when this is simply not the case. Avoidance of HMRC obligations and rights that drivers would have as ‘employees’ or ‘workers’ (thereby gaining an unfair commercial advantage) can occur; or there may be simple ignorance of employment law and the way HMRC views matters.
The Senior TC view of self-employed status, in very broad terms, is: ‘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.’
HMRC concerns with regard to the employment status of drivers stating are cited: ‘…. 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 fair competition amongst other operators. Their position is that in road haulage it is rare for someone to be genuinely self-employed unless they are an owner-driver.
Indeed HMRC has its own internal guidance for staff to consider cases relating to all industry sectors and this states ‘Drivers who only provide their labour, driving vehicles owned, maintained, and insured by contractors, are likely to be employees. Drivers who also provide the means of transport, that is the vehicle, are likely to be self-employed even if they work mainly for one principal. The vehicle may be one which they own or lease…. and…Hauliers sometimes claim labour-only drivers are not employees because they are engaged on a job-by-job basis with no guarantee of future work. Even if they are engaged on a job-by-job basis, the contract for each engagement may well amount to a contract of employment…. In some cases, the regularity of work done may indicate that there is a continuous contract…..
The draft guidance does not deal with wider employment law but does mean operators can expect to have to justify how drivers, other than owner-drivers, are in fact self-employed. In certain cases ‘good repute’ might come into play. Traffic Commissioners do not want operators avoiding their legal and financial obligations thereby gaining commercial advantage.
What are the Senior TC Statutory Documents?
The Traffic Commissioners’ 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 whilst minimising the regulatory burden on the compliant.’ The Statutory Documents aim to set out how this is carried out in a manner that is transparent, fair to all, consistent and operators know where they stand.
Operators, transport managers and drivers should regard the documents as a helpful resource. The sections relating to repute, finance and transport managers deal with the ‘Holy Trinity’ core of operator licencing and are recommended reading. The Driver Conduct document serves as a good guide to drivers with case studies designed with driver training in mind. Many further amendments can be found within the draft documents here:
Tim Ridyard is a Partner and road transport regulatory lawyer at Ashtons Legal email@example.com tel 01284 732111