How competent are you?
In the first of a monthly series of articles addressing legal issues, Solicitors Andrew Banks and Peter Woodhouse of Stone King’s Transport Team ask:
With very limited exceptions, anyone who holds a standard PSV operator’s licence is required to satisfy the requirement of professional competence.
At its most basic, this means that the operator himself has, or must employ someone who has, the relevant Certificate of Professional Competence (CPC). That person then acts as the Transport Manager (TM) nominated on the operator’s licence.
Contrary to a popular misconception, this nomination on the operator’s licence does not make the TM the “holder” of the licence, that is the operator itself.
Sound simple? Apparently not. In the last few years, the whole perspective on this area of practice has changed, and this change has been driven by the Traffic Commissioners both through statutory guidance and Public Inquiry decisions.
The EU Regulation 1071/2009 governs the access to and pursuit of the profession of road transport operators. It repealed the previous EU Directive. After consultation the Government responded by implementing the Road Transport Operator Regulations 2011. Since then there has also been a series of Senior Traffic Commissioner’s statutory guidance documents, including Statutory Document No 3 on TMs.
It has been interesting to see the effect the guidance has had on the approach and decisions that Traffic Commissioners have made in relation to both operator licence applications and inquiries. Of course the guidance documents did not really introduce anything new, they are a clarification of the Traffic Commissioners’ approach and expectations, incorporating interpretations of appeal decisions, existing legislation and common sense and as such are essential documents for anyone either applying for a new operator licence or concerned with their own regulatory compliance.
The role of the TM
Arguably, one of the most significant changes has been due to the Traffic Commissioners’ interpretation of the required role of the TM. The role of TM is defined by statute in s82 Public Passenger Vehicles Act 1981 as being a person “who effectively and continuously manages the transport activities of the undertaking”. It is a role that many involved in enforcement felt historically had been open to abuse with some organisations merely paying lip service to the concept. There was particular concern expressed about external TMs spreading themselves too thinly and being nominated on numerous operator licences.
The external TM
An “external” TM is a TM that does not have a genuine link, such as by employment, to the operator. External TMs are still permitted, but their potential activities have now been substantially curtailed. External TMs can only act for a maximum of four operators with a total responsibility for no more than 50 vehicles and the guidance also indicates that if a TM has more than 30 vehicles they should in any event have additional assistance.
Case law had already established, perhaps not surprisingly, that to manage a business from abroad is highly unlikely to be deemed acceptable. The real headache for external TMs now though is that their role is one that is scrutinised in a much more forensic way. The Traffic Commissioners will expect an external TM to have a contract of engagement setting out their responsibilities, which must include the statutory minimum obligations. If an external TM is involved in other operations the TC will want to know, with some precision, just how many hours are going to be spent on each operation and whether the transport management of the operation can be conducted effectively in that time. The first annex to the guidance is helpful in this regard but using that to conduct a simple mathematical calculation if someone was to be responsible for say 45 vehicles relating to 15 vehicles each over three operations then the expectation would be that 25 hours would be committed to each, making a total of 75 hours work a week. Using that template it is easy to see the challenges external TMs now have.
The internal TM
The guidance has not only affected external TMs but internal TMs as well, in particular those operators with multiple depots or garages. This is because of the increased focus of the Traffic Commissioners on having on-site TMs.
For smaller operators, this will not be too much of a problem, because there might only be one depot, possibly plus an outstation or two. However, some large operators with multiple depots are having to create an almost entirely new role as a consequence of the Traffic Commissioners’ approach.
Historically, the approach of large operators has been to nominate as TM a very senior manager (or indeed more than one senior manager) who has responsibility for a number of sites. When done properly, the “continuous and effective management” was effected by a clear and effective management chain. Thus, while the TMs may not have been on the same site as the vehicles for which they had statutory responsibility, they would be able to, it was argued, take effective responsibility for the operation as a whole through the management chain.
This approach has been struck a series of blows. Unlike the EU Regulation which refers to responsibility for the “undertaking” i.e the road transport operation, the Traffic Commissioners’ guidance (paragraph 25) refers to “continuous and effective management of the vehicles [our emphasis] on a day to day basis”. This reflects the Traffic Commissioners’ approach in practice. In other words, it will only be in rare cases that a remote TM will be acceptable and an operator should be looking to have a CPC holder at any site that has a significant number of vehicles kept at it.
For many larger operators the challenge is to fill the role with someone who is able to fulfil the role day to day, preferably with most of their working day being at the operating centre for which they have responsibility. This can be particularly challenging where there is a high turnover in staff and managers.
What else can go wrong?
Although sanctions have always been available against TMs who are not professionally competent or of good repute, EU Regulation 1071/2009 which became law in this country in December 2011, means that unless and until rehabilitation has been undertaken, an unfit TM will have their CPC invalidated in all EU member states. TMs can also now be called up to Public Inquiry alone and have their conduct scrutinised. The challenge for large operators is therefore to find individuals who are willing and able to commit to the role.
For directors it is difficult as many will not be able to satisfy the need for continuous and effective day to day management of the transport part of the operation. For less senior managers in a large business they may not wish to take on the risk associated with the change in the role and expose themselves to the danger of regulatory action.
Thus, Regulation 1071/2009 and the TC’s guidance have created a problem for large operators, which is only likely to be solved with the introduction of what is effectively a new and important role. This can give a significant personnel challenge. An operator may have to find people to employ at the depot who have, or are capable of gaining a CPC. This is not as easy as it sounds, especially as the test now includes the international element. Often the operator approaches the existing on site manager with a view to getting them the qualification. But you can imagine the conversation …
- Operator – we would like you to be our new CPC holder
- Manager – thank you, I am very excited about that
- Operator – and the even better news is that we will pay for you to get through the exam
- Manager – what about a pay rise after I pass?
- Operator – well I don’t have anything in the budget …
- Manager – will the TC be pleased that I have done this?
- Operator – well yes, until you screw up then they can take away your good repute
- Manager – and what will you do then?
- Operator – well I haven’t really thought about that, but we might need a new Depot Manager …
As you can see, this might not be an easy sell
If the TM and operator are not the same person then there are other challenges as a consequence of the guidance. What if a TM feels he is being overridden by his operator, for example? The guidance is clear on the steps to be taken by an unhappy TM in those circumstances. First they should put those concerns in writing to the operator. If that proves ineffective then the ultimate approach suggested in the guidance is resignation, although undefined appropriate action is also given as an alternative. A TM who remains in post but then complains at a Public Inquiry that they were overridden by their operator will not receive any sympathy from the TC, and risks the invalidation of their CPC.
The challenges faced by TMs in establishing that they have continuous and effective management of the operation for which they are responsible are increasing. The role of TM is not one that anyone should take on lightly. The guidance reflecting Regulation 1071/2009 indicates that the TM should have some knowledge of civil law, fiscal law, commercial law, social law, business and financial management, road safety, access to the transport market and the technical side of the operation. The requirement for that knowledge base gives a clear indication of the size of the task now facing the modern TM.
Written by Andrew Banks and Peter Woodhouse of Stone King’s Transport Team
Contact them on
Efficiency, understanding and communication
This article is for guidance only
The law and practice referred to has been paraphrased or précised and should not be construed or relied upon as legal advice