Richard Smith considers the detail of the proposed amendments in just one of the areas involved: that of access to the occupation, and the likely impact for the UK.

Introduction

The European Commission has recently published its proposals for wide-ranging revision of many aspects of the rules relating to road transport under the banner of Europe on the Move, as summarised in a previous article on EU proposals for commercial transport. While it is highly unlikely that the consultation and legislative process could be complete by March 2019 when the UK is due to leave the EU, the recent election result has thrown doubt on what the future relationship might be. In any case, some aspects will have to apply to operators on international work irrespective of the UK’s membership of the EU.

Access to the occupation of road transport operator is governed by EC Regulation 1071/2009, which lays down the criteria to be met by operators and also details of the administrative processes to be carried out by Member States. Most of the proposed amendments fall within the administrative area and are thus concerned with the processes carried out by DfT and the Traffic Commissioners (TCs). These amendments mostly involve clarification of existing requirements and, as such, are unlikely to be contentious — indeed even welcomed in some respects. As is often the case, there is an element of spreading the UK best practice across the EU.

Granting of an operator licence — proposed modifications

This concerns the four criteria set by the EU to be satisfied for the granting of an operator’s licence and the Commission does not propose to amend these in any way.

However, at present, there is a provision to allow Member States to impose additional requirements to these four and the Commission proposes to delete that provision.

It is important to note here that s.15 of the Goods Vehicles (Licensing of Operators) Act 1995 requires TCs to consider environmental matters when deliberating on the grant of an O-licence and that is not echoed anywhere in EC Regulation 1071/2009. It would appear, therefore, that this comes into the category of “additional requirement” and the proposed amendment would mean it would no longer be possible to refuse a licence or impose conditions on one in respect of environmental matters concerning an operating centre. However, the establishment of a new operating centre would still require separate local authority planning approval, which may or may not provide adequate protection.

The proposal also clarifies some details concerning the four criteria.

1. Establishment

  • Commercial and labour contracts are added to the list of core business documents to be kept at the registered office of the business.

  • The ability for Member States to specify additional documents to be kept is restricted to those necessary to verify compliance with EC Regulation 1071/2009.

  • There is a separation of the requirements for the conduct of administrative and commercial activities from those concerning the operation of vehicles.

  • A requirement is added for undertakings to have a level of assets and staffing appropriate to the activity of the business.

2. Good repute

  • The proposal specifies that the requirement for good repute extends to executive directors, general partners and other legal representatives in addition to the “transport manager and any other relevant person”.

  • Infringements of national tax law, and the EU rules on posting of workers and contractual obligations are added to the list of offences to be taken into account in determining good repute.

  • The Commission is empowered to define the degree of seriousness of infringements according to their potential to distort competition (notably cabotage rules and undermining of working conditions).

  • A transport manager who has lost good repute cannot regain it in less than one year from the date of loss.

Additionally, under the proposed new administrative arrangements (see below), Member States must record convictions or penalties for serious offences incurred in other Member States during the last two years so these will clearly have a bearing on good repute.

3. Financial standing

  • The current levels of financial standing for HGV operators are not changed but new, lower levels are proposed for operators of light commercial vehicles (see below).

  • When the on-going requirement in respect of financial standing of an existing operator is not maintained, that operator may be allowed six months in which to satisfy the requirement again. The change here is that the required financial standing must actually be demonstrated within six months rather than just a demonstration that it will be satisfied at some time in the future, as at present.

The levels of financial standing proposed for operators of vehicles under 3.5t are €1800 for the first vehicle and €900 for each additional one. At the current conversion rate applied to HGVs, this would approximate to £1570 and £785, respectively.

4. Professional competence

  • The Commission is empowered to amend the details of the syllabus for the CPC examination and the details of certification to reflect market developments as well as technical progress.

National administrative arrangements

In respect of administrative arrangements, the proposal adds to the list of items to be recorded in the national electronic register the following information:

  • registration numbers of vehicles at the disposal of the undertaking

  • the number of employees

  • total assets, liabilities, equity and turnover during the last two years

  • the risk rating (OCRS rating in the UK)

  • convictions or penalties for serious offences incurred in other Member States during the last two years.

This additional information need not be available in the public domain but all the data must be available to the authorities in the Member States, either directly or within five working days of a request — a reduction from the 30 days at present allowed. While all of this is largely a matter for DfT, it is possible that at least those undertakings that are not required to place their accounts in the public domain will have to make an annual return to the TC with the details required. While the Member States have to ensure that all data in the register are up to date and accurate, there is no proposal to amend the periods of grace allowed for operators to report, for example, additions and deletions of vehicles in the fleet, which will require a change to the register entry.

Article 18 on administrative co-operation between Member States is completely revised and compels all Member States to respond to properly reasoned requests for information within 25 working days or, if the request is insufficiently reasoned or the information cannot be supplied, make that known within 10 working days. This will probably be welcomed by the UK authorities and operators since it is known that there have been difficulties in gathering information for enforcement activities from other Member States.

O-licensing for vans

While all the foregoing proposals are unlikely to be greatly contentious, there is one aspect that will be, both in the UK and probably elsewhere. This concerns the amendment of Article 1 to remove the 3.5t threshold for exemption from the complete regulation. While the application of the criteria to operators of vehicles under 3.5t is limited to the requirements for appropriate financial standing and an effective and stable establishment in a Member States (although the other requirements may be imposed by a Member States), the ramifications could be far-reaching.

While the requirement for good repute, professional competence and a transport manager, together with all the associated details, will not apply to operators of vehicles under 3.5t, the remainder of the regulation will. This means, inter alia, that such undertakings must be approved and registered on the electronic register, they must be periodically checked to ensure that they continue to meet the requirements and will be subject to revocation of approval to operate. Additionally, national authorities must report every year to the Commission information about the activities of operators of vehicles under 3.5t, including “the number of authorisations granted to operators engaged in the occupation of road haulage solely by means of motor vehicles with a permissible laden mass not exceeding 3.5t …”. All of this clearly amounts to O-licensing for vans and other small vehicles, though it could be “O-licensing lite”.

One group that may be forgotten in this is that group of individuals who carry out “last mile” parcel deliveries for larger companies using a small van or even a private car. These people clearly provide an effective service for the parcel companies and for consumers looking for timely and cheap delivery of internet purchases and secure an income for themselves. However, they are encompassed by the definitions of “undertaking”, “occupation of road haulage operator” and “occupation of road transport operator”, including those who use their own car for the regulation refers simply to “motor vehicles”. On the face of it, therefore, they will be covered by the regulation and Peed to be authorised to operate by the TC and comply with the financial standing and establishment criteria. There is, however, the possibility for a Member States to exempt operators engaged solely in national operations that have a minor impact on the market by virtue of the nature of goods carried or the short distances involved and that could certainly be applied in this case, though the fact that these operators probably work on a “zero-hours” contract basis may bring political opposition to that.

Conclusion

Much of this particular proposal is unobjectionable and some may even be welcome. However, there are two areas that ought to cause some concern and these are the possibility that environmental considerations could be removed from the licensing process and the requirement for operations using vehicles under 3.5t to be authorised.

While we might previously have been reasonably confident that Brexit would make these requirements irrelevant, that is no longer the case. Even if Britain’s exit from the EU is not stopped altogether, any softening of the negotiating position by an attempt to retain aspects of the single market or customs union will almost inevitably mean that the final regulation will have to be applied in the UK.

Last reviewed 27 June 2017