Operator Licensing:

Tachographs and Driver’s Hours, Financial Standing, Operating Centres, Transport Managers and Driver Conduct Hearings

Jared Dunbar BSc, MA, LLB

Associate, Dyne Solicitors Limited

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My background• Associate at Dyne Solicitors Limited, specialising in Road Transport Law. • Previously worked in the automotive industry throughout the UK and Europe. • Co-ordinator of a national trade association, the BSA. • Written legal content for UK Haulier website and quoted in Commercial Motor

magazine. • Discussed implementation of forthcoming European legislation with

Department for Transport.

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Transport Law – A complex area?• Senior Traffic Commissioner’s Statutory Guidance

– Totals over 300 pages

• Wilkinson’s Road Traffic Offences– Approximately 4000 pages long

• VOSA’s enforcement sanctions policy – Over 300 pages long– Over 600 different offences

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Sanctions for Transport Problems• You risk being:

– Prosecuted - fined, disqualified, imprisoned– Called to a Public Inquiry where you risk

• Losing your Operator’s Licence• Having you licence suspended• Having your licence curtailed

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VOSA – The statistics

Event Figure or %

Number of HGVs inspected for mechanical issues in 2012-13

144,472 (total specified vehicles (2012)=

342,473)

Proportion with prohibitions 39%

Proportion of MOT fails on HGVs 22%

Number of goods vehicles inspected for driver’s hours 2012-13

89,561

Proportion with driver’s hours prohibitions

19%

VOSA maintenance visits 2,656

Proportion unsatisfactory 78.4%

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VOSA Criminal Prosecutions – The statistics

Event Number

Total Fixed Penalty Notices issued (2012-13)

17,080

Total Prosecutions 6,209

Drivers’ hours prosecutions 2,509

Tachograph/records prosecutions 2,486

Overloading 247

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Public Inquiries – The statistics

Event Figure or % in 2011-12 (2010-11)

Number of Public Inquiries called for non-compliance for Goods Vehicle

Operators

943 (1113)

Licence Revocations 34% (33%)

Licence Suspensions 10% (7%)

Licence Curtailment or conditions imposed

22% (23%)

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(1) Driver’s Hours and Tachographs

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Drivers’ Hours Legislation• EU rules

– apply to drivers of most large goods vehicles (over 3.5T).

• GB rules– Apply to drivers exempt from EU rules

• Working time– Apply to all drivers in addition to EU and GB Rule

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Exempted Vehicles• Total exemption from all rules given to drivers of vehicles used by

– Armed Forces– Police – Fire Brigade

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EU Rules• Exemptions include

– Refuse collection– Radio and TV broadcasting– Gas, electricity and water services

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Basic Rules - Driving• Daily driving

– shall not exceed 9 hours– Can be extended to 10 hours on two occasions a week

• Weekly driving– Must not exceed 56 hours in a week

• Fortnightly driving– Must not exceed 90 hours in any two consecutive weeks

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Basic Rules - Rest• Breaks

– After 4 ½ hours, a 45 min break must be taken – (can be taken as 15 mins and then 30 mins, but not other way round)

• Daily Rest – 11 hours in 24 hour period– May be reduced to 9 hours but no more than 3 times between two weekly rests– Split daily rest: First must be at least 3 hours and the second at least 9 hours

• Weekly rest– After six 24 hour periods, a regular weekly rest of 45 hours– Or, reduced weekly rest of 24 hours (must be compensated by equivalent rest taken

before end of 3rd week)

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EU Rules - Emergencies• Drivers may disregard EU hours rules in order to

– Reach a suitable stopping place– Ensure safety of persons, vehicle or load

• Must record on their tachograph why the breach occurred

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EU Rules – Trains and Ferries• Daily rest may be interrupted twice• Total of all interruptions not to exceed one hour• During all rest, driver must have access to a bunk• At least 11 hours rest to be taken

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Liability of Operators• Operators must ensure drivers hours’ rules are obeyed• Operators may be prosecuted alongside drivers for offences• Operators and drivers offences need to be notified to the Traffic

Commissioner within 28 days of conviction

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GB Domestic Rules• Apply to most goods vehicles that are exempt from EU rules• Exemptions

– Police and fire brigade– Drivers who always drive off road– Private driving

• Daily driving – maximum permitted is 10 hours• Daily duty – maximum permitted is 11 hours

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Mixed EU and GB Rules• If a driver undertakes some driving under EU and some under GB then:

– Driving under EU cannot count as off-duty under GB rules– Driving under GB rules count as attendance at work under EU– Driving under EU count towards driving and duty limits under GB domestic rules– Any driving under EU rules in a week means

• that you must take a daily rest period on those days • as well as a weekly rest period

• Driving limits – GB must always be obeyed. Anytime driving under EU, then those rules on driving limits must be obeyed.

• Rest and breaks – must always obey EU rules on rest periods and breaks on days and weeks in which EU rules driving is carried out

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Working Time rules for EU drivers• If driving under EU rules, a driver:

– Must not exceed average of 48 hours per week (over 17 week period). – Maximum of 60 hours in any one week– If night work performed, working time must not exceed 10 hours in a 24hr period– Cant work more than 6 hours without a break– 30 minute break(s) for 6-9 hrs– 45 min break(s) if more than 9 hours– A break must be 15 minutes– Records kept for 2 years

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Working Time rules for GB drivers• If driving under GB rules, a driver:

– Must not exceed average of 48 hours per week (over 17 week period) (can opt out)– Health checks for night workers– Entitlement to adequate rest

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Powers of VOSA and Police• Prosecute a driver and/or operator• May prohibit drivers from driving when

– EU or GB rules limits breached– Continued driving will break rules– Tachograph charts fraudulent

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Analogue tachographs – Driver’s responsibilities

1. Verify tachograph is correctly calibrated2. Carry enough charts for whole journey (including spare)3. Use second chart if a chart is damaged while in use4. Ensure correct type of chart is used for specific model of tachograph5. Not use a chart to cover a period longer than 24 hours6. Enter centrefield details at first use and when changing vehicles7. Correctly operate the mode switch8. Make manual entries on chart to explain an ‘emergency’ breach9. Make manual entries when equipment malfunctions10. Report malfunctions to employer11. Return charts to Operator within 42 days12. Permit an authorised examiner or police to examine tachograph13. Not remove a chart before the end of a duty period14. Produce that day and previous 28 days charts at roadside15. If they have a digital card, carry it on their person

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Digital tachographs• Store data on driver card and vehicle unit• Operator must download data

– Driver card data every 28 days– Vehicle Unit data every 56 days

• Drivers must carry Digicard with them even if driving analogue vehicle

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Digital tachographs – generation 1• Introduced in 2006• When Digitach 1 was introduced, there were rounding errors in the

system• This meant that drivers were losing upwards of 30 mins a day of driving

time• Caused primarily by stop start driving• The problem was removed by the Generation 2 Tachographs.

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Comparison of Driving Time

Activity Start End Total Driving Analogue Generation 1 Generation 2

Drive 08:00:00 08:00:05 5 seconds 5 seconds 1 minute Zero

No Driving 08:01:00 08:01:59 Zero Zero 1 minute Zero

Drive 08:02:55 08:03:00 5 seconds 5 seconds 1 minute ZeroTotal Driving time

  

10 secondsDriving time = 3 minutes

Driving Time = 0 minutes

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Operators’ Responsibilities1. Ensure tachographs have been calibrated 2. Supply type-approved charts and print roll to drivers3. Properly instruct drivers on rules4. Ensure drivers return charts within 42 days5. Schedule work so that it complies with the rules6. Download data from Vehicle Unit7. Download data from Driver Cards8. Check chart and digital data compliance9. Keep records for at least 12 months10.Take all reasonable steps to prevent breaches of rules e.g. analysis

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Tips• Get all tachographs independently analysed• Make sure all drivers have undergone tachograph training (as part of

Driver CPC)• Have annual refresher training• Test all new driver’s understanding before they go on the road• Have written contracts and a written disciplinary procedures in place to

allow you to deal with errant drivers• Seek advice early if called to Public Inquiry

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Questions?

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(2) Financial Requirements for an Operator’s Licence

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Purpose of Financial Requirement?• To ensure that the holder of an Operator’s Licence has the resources to

keep its vehicle safe on the road

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Maintenance Contract Hire• Even if you hire your vehicles and maintenance is included in that hire

agreement, still need to demonstrate financial standing

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When do I need to meet Financial Standing?• Continuing requirement throughout duration of licence• Operators must notify TC of material changes in the availability of finance

within 28 days (condition of licence)– E.g. if a company is heading to administration the TC needs to be notified before

administrators are appointed

• Burden on the Operator to satisfy the TC that financial standing met

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What happens if I can’t meet it?• Proportionality doesn’t come into it• Revocation for lack of financial standing is mandatory• Licence will be curtailed – if you ask

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Level of Finance Required• Levels differ for a Standard and Restricted Licence• Amounts change every 1st January• Requirement for number of vehicles on the licence (not just number being

operated)

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Amounts Required (2013)

Licence Type Amount Required

Standard First Vehicle £7,200

Each additional vehicle £4,000

Restricted First Vehicle £3,100

Each additional vehicle £1,700

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Assessing availability of Finance• Do not need specified amount available 365 days per year• But an average balance over 3 month period for existing licences and 1

month for applications• What are available funds?

– capable of being used

• Leading case poses 3 questions:– How much money can the operator find if he needs it? Amount depends on licence– How quickly can he find it? Must be at most 30 days– Where will it come from? Various options

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Names on financial statements• All financial documents should be in the name of the applicant• Partnerships and sole trades can (at TC’s discretion) use statements from

someone else but only if supported by a statutory declaration• Companies could be supported by Group or cross-company guarantees

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Types of evidence which can be used• Bank statements• Building society statementsAt TC’s Discretion: • Credit Card accounts• Working capital loan facility or revolving credit agreement • Invoice Finance or Invoice Agreement• Annual accounts • Real Assets

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Physical assets – in practice• In the case of NCF (Leicester) Ltd in 2012, the Upper Tribunal said:

“while it might appear possible, in theory, to put forward physical assets in order to meet the requirement to be of appropriate financial standing the practical difficulties are such that it is unlikely to prove possible in practice”

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Types of evidence generally NOT allowed

• Cash• Bank letters (other than formal overdrafts)• Children’s accounts• Shares, savings bonds, PEPs/ISAs, savings certificates, insurance policies,

unless accompanied by accountant letter certifying value and notice period for cashing

• Physical assets such as livestock or perishable goods• Property, plant and machinery if their disposal would affect the business

i.e. can’t rely on the vehicles your using!• Age debt registers

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Assessing Bank Statements • Assessing an average balance over 3 months (1 month for applications)• Take average of the 10 figures over 3 month period:

1. Latest figure e.g. 30 August 20132. 20 August3. 10 August 4. 30 July5. 20 July6. 10 July7. 30 June8. 20 June9. 10 June10. 30 May

• Then add in overdraft facility• Then add any other sources of finance

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Example

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Date Details Debit (£) Credit (£) Balance (£)

30.08.13 TNT Ltd 26.00 24883.00

29.08.13 O2 37.00 24909.00

27.08.13 Fuels Ltd 2920.00 24946.00

20.08.13 Nearly Construction

1374.00 27866.00

18.08.13 N Buckle 300.00 26492.00

09.08.13 C W Holdings 2044.00 26792.00

02.08.13 H Lendox Ltd 3020.00 28836.00

30.07.13 Fuels Ltd 2920.00 31756.00

Interpreting Financial Accounts• Two most important elements are

– Profit and loss account – Balance sheet

• On a review, Leeds will check:– Profit and loss account is positive– Balance sheet ratios

• Total assets / total liabilities > 1.0 i.e. Company should own more than it owes• Current assets / current liabilities > 0.5 i.e. Company can realise at least sufficient cash to pay half of its

creditors

• Current assets ratio of between 0.5 and 1.0 may indicate difficulties and will be referred to TC

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Statutory Declaration?• Can only be used for partnerships or sole traders• Guarantee from a 3rd party to provide the operator with the funds

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Period of grace• TC’s have discretion to allow holders of standard licences a period of up to

6 months to demonstrate that the requirement will be met on “a permanent basis.”

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Tips for Public Inquiry• TC’s ask for financial evidence to be supplied to them 1 week before the PI• Get the bank statements (or copies) , overdraft letter and accounts etc to

your solicitor quickly• Solicitor needs to assess them before the hearing• If there is an issue, it can be addressed by using other resources but only if

sufficient time

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Questions?

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(3) Operating Centres

Jared Dunbar BSc, MA, LLB

Associate, Dyne Solicitors Limited

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When should vehicles be parked at the Operating Centre?

• Vehicles should be parked or ‘normally kept’ at the Operating Centre when not in use

• This is a question of fact and degree in each case• Traffic Commissioner has stated that “this is a difficult area” and “there is

little guidance which can be issued in this regard”.• The Traffic Commissioner only has jurisdiction over authorised vehicles

and does not extend to visiting vehicles.

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Unauthorised Use• Criminal prosecution (level 4 fine, £2500)• Issue will be discussed at Public Inquiry

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Changing Operating Centre• Need to submit an application to the TC• Use GV81 form – available online

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Adverts• On an application for an Operator’s Licence, need to advertise the

Operating Centre. Same applies if moving Operating Centres. • If not correctly published, a TC will refuse the application • If advert refused then new application must be made• Must publish a notice of the application in a local newspaper with 21 days

before or 21 days after the application is made• It must be in a ‘local newspaper circulating in the locality’ of the Operating

Centre

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Available• TC merely needs to be satisfied that the Operating Centre is available for

use by the Operator • i.e. the Operator owns the land, is a tennant or had permission from the

owner to use the land.• TC shouldn’t become involved in matters of planning law or consent or

property law.

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Suitable• Onus is on the applicant to satisfy the TC that the site is suitable as an

Operating Centre

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Opposition by local residents (Representors)• Neighbours in the vicinity are entitled to object to an Operating Centre• No definition of ‘in the vicinity’.• General rule is that if a representor can see, hear or smell an operating

centre from his property then he will be considered ‘in the vicinity’.• Neighbour can only object on environmental grounds i.e. noise, vibration,

fumes and visual intrusion.• Neighbour cannot object on road safety matters.

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Opposition by Statutory Objectors• Statutory Objectors are

– Police– Local Authority– Planning Authority– FTA and RHA

• They can object to the Operating Centre on environmental grounds and on grounds that applicant is not

– Of good repute– Finance– Adequate facilitates to keep vehicles safe– Adequate arrangements for complying with law– Stable establishment– Be professionally competent

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Conditions and Undertakings • The TC can impose certain conditions on an operating centre (in response

to neighbours complaints) such as:– Limiting operating hours;– Limiting number of vehicle movements in and out;

• Offence to breach a licence condition.• Conditions only apply to the Operators authorised vehicles, so third

parties vehicles are unaffected

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Site visits• Traffic Commissioners may decide an application on the papers• However, they may personally undertake a site visit• It is regarded as essential for a TC to conduct a site visit before presiding

over any public inquiry convened with regard to the suitability of a proposed operating centre

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Address for Service and Correspondence• Doesn’t need to be your Operating Centre• Needs to be somewhere you can reliably receive important letters• Can’t be your representative’s address

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Complaints about existing operating centres• TC can review an Operating Centre

– where the operator is said to be operating outside his terms of the licence– On a variation application– At 5 yearly intervals if a neighbour has complained

• Those complaints should be in writing

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Schedule 4 – Transfer of Operating Centre• If accepted there is no need to advertise• Allows a currently used Operating Centre to be transferred to a different

operator’s licence

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Tips• If you need to move Operating Centre, put in an application.• Make sure the form is completed correctly.• If you can, use a schedule 4 transfer to avoid the need to advertise• Do not start using a new Operating Centre until you are authorised to

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Questions?

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(4) Transport Managers

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Who needs a Transport Manager?• Applicants for standard licences must hold a CPC or employ someone who

has a CPC• In simple terms, operators that transport other people’s goods need a

CPC.

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How do you become a Transport Manager?

• Need to have a Certificate of Professional Competence (CPC)

• By Acquired Rights– Has replaced grandfather’s rights

• By Examination

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Definition of a Transport Manager• A natural person – so can’t be a company• Who effectively and continuously manages the transport activities of that

undertaking

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External or Internal Transport Manager?

• Can either be– Internal: be employed by the operator with a “contract of employment”– External: be a service provider with a “contract for the supply of services”

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Requirements of a Transport Manager• Be of good repute• Be professionally competent (i.e. have a CPC)• With an external transport manager, not acting for more than 4 operators

or for more than 50 vehicles (4 and 50 rule)

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General responsibilities• “Effectively and continuously manage the transport activities of that

undertaking”• Ensure compliance including:

– Monitoring driver’s hours and tachograph use– Preventing of overloading of vehicles– Checking driving licences (every 3 months and keeping a copy)– Ensuring vehicles correctly tax– Ensuring vehicles being used are specified – Ensuring MOT’s completed on time– Ensuring drivers undertake checks and auditing them?– Ensuring vehicle inspections undertaken on time and sheets completed correctly– Ensuring convictions and other matters are notified to Traffic Commissioner

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Repute• Simply are they fit to work as a transport manager?• To be discussed later by John Dyne• Problems if convictions or penalties for:

– Commercial law– Insolvency law– Pay and employment conditions in the profession– Road traffic law– Professional liability– Trafficking in human beings or drugs

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Hours required to do the role?• Dependant on the number vehicles they look after

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Motor Vehicles Proposed Hours (per week)

2 or less 8

3 to 5 15

6 to 10 20

11 to 14 25

15 to 29 Full time

30 and above (Full time) Additional assistance required

Can you be a Transport Manager and a Director?• Yes, in theory!• But, depends how many hours you work as a director and how many

vehicles you operate.

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4 and 50 rule• External transport managers are only allowed to be specified on 4

different licences or look after up to 50 vehicles, which ever is lower.• External Transport Managers should consider

– keeping a diary of each time they attend site – Record the hours worked – Get operator to sign to confirm

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Geographical location of O’ Licences?• TC has the discretion to refuse a Transport Manager from being allowed

on Licence.• May happen if the 4 licences he looks after are at different ends of the

country.• Rule of thumb of 1 -1.5 hours travel time each way

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TM delegating his responsibilities? • A Transport Manager can delegate certain aspects of his job as long as he

is still ‘effectively and continuously manages the operation’• Grey area as to how much delegation is allowed:

– But he doesn’t need to file every sheet of paper

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Declaration of unfitness• Since October 2011, rules changed.• Transport Managers are now called up in their own right and advised to

consider getting independent legal advice.• Can now get disqualified from acting as a transport manager anywhere in

the EU• 37 Transport Managers lost their repute in 2011-12

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Transport Manager’s options if problems with Operator

• If Transport Manager is overridden by Operator and being prevented from doing his job properly, then

– Transport Manager should give the Operator a written warning– If problem progresses, then resign

• Remaining on the licence whilst unable to perform his duties risks damaging his repute and future job prospects

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Change of Transport Manager• Resignation or departure of Transport Manager is a material change -

must be notified to the TC within 28 days• Can request a period of grace (up to 6 months)• Information you want from a prospective Transport Manager:

– Has he been to a Public Inquiry before and, if so, why?– What was the OCRS score for his previous employer(s)?– Has the Operator he worked for been convicted for any transport offences?

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Questions TC will ask• Key questions asked by Traffic Commissioners will include:

– How many hours does the nominated person work for the licence holder?– On how many other licenses is such person nominated?– How many vehicles are they responsible for?– What is the distance between each of the operating centres for which they are

responsible?– What is the nature of the nominated person’s other duties?– Does the nominated person have sufficient time to fulfil his or her duties as Transport

Manager?– How will such person apportion his or her time between the entire licence holder’s

employing them?– Is the nominated person of good repute?

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Questions?

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(5) Driver Conduct Hearings

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The Facts

Event Figure or %

Total driver conduct cases closed in 2011-12

13,531

Number of drivers called to a hearingin 2011-12

2,164

Licences refused 2,004

Licences revoked 128

Licenses suspended 474

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Hearings• Most hearing are called as a result of convictions• They are inquisitorial in nature • They provide a drive the opportunity to explain the circumstances • The hearings exist to decide whether a particular driver is ‘fit’ to hold a

vocational licence

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Decisions• TC may issue a written warning• TC can disqualify a driver until he passes a test if it appears appropriate

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Likely Outcomes• Mobile phone use – 21 day suspension• Falsification of tachograph charts – disqualification 1-12 months

depending on number• Drivers’ hours offences – 28 days suspension if persistent or habitual• Drink drive disqualification – from warning letter up to a further period of

6 months disqualification depending on length of ban and whether 1st offence

• Totting up ban – from warning letter to disqualification• Serious criminal offences (sexual, violence, theft) – revocation and

infinite disqualification• Possession of drugs – suspension or revocation

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Questions?

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