Last reviewed 19 June 2015

In this feature article, Richard Pelly looks at the importance of employment contracts in the commercial vehicle sector.


Drivers are the lifeblood of transport businesses. Without them most operators would not have a business to start with.

Anyone reading this article will know that HGV drivers need to be employed on a formal basis, and that this will mean documenting the terms of their employment. Most (hopefully all) operators will already have made sure that all of their drivers have contracts of employment in place for their full time drivers or contracts for employment if they are employing self-employed drivers. Operators who take drivers supplied by agencies must also have those arrangements set out in writing.

But before reading on — and assuming an operator does have contracts in place — it is worth asking oneself: what is in these contracts? Who drafted them? When were they last reviewed? And crucially, before “putting pen to paper”, did the person drafting the contract have any knowledge of the road transport world generally, and the operator’s business in particular?

Any operators should pause for thought if, on reading this, they do not know what is in their drivers’ contracts of employment or are not sure what should be in the contracts in the first place, but hope that they are “okay”. The contractual basis upon which drivers are employed forms the foundation for the way in which a driver will be inducted, trained and supervised.

Employment consultancies who do little more than charge to add the name and address of a new driver and then “press print” on their one-size-fits-all generic contract should be avoided like the plague.

HGV operations are very highly regulated. Operators holding national operators’ licences need to appoint qualified transport managers who are required to “effectively and continuously” manage the transport activities of the business. A contract that is fit for purpose is an essential part of this process, especially because, in road transport an innocent mistake (eg forgetting to record a walk-around check of the lorry before driving out of the yard) can mean committing a criminal offence: operators are required to have effective systems in place which are properly recorded to minimize the incidence of such mistakes and to have procedures in place to deal robustly with any such problems if and when they do arise.

Employment and driver retention

There is a growing concern throughout the commercial vehicle industry of a universal driver shortage. Even now there are continuing problems with Driver CPC and efforts continue to need to be made to help would be-drivers get back into driving HGVs and PCVs.

It is all too easy to focus on finding drivers in the first place and not enough time making sure that the drivers that an operator does have are properly employed and supervised. A common concern is that if operators overdo it and try to apply too much in the way of systems, controls and discipline, then drivers will leave. Many operators believe that they simply cannot afford to take that risk and as a result they turn a blind eye to the formalities of ensuring that the right contracts and disciplinary procedures are in place.

In any case, many operators take the view that if they are paying their drivers properly, scheduling them correctly, and supervising them effectively, then the presence or absence of properly drafted employment contracts makes little or no difference to their day to day operations.

Sorting out “proper” contracts costs money and managing drivers using a structured HR approach takes time, so it is easy to see why some operators might think that there is little meaningful benefit for anyone (operator or drivers) in return.

A lawyer’s answer to these objections is predictable and comes in two parts:

  • firstly, the law requires that an employer shall provide to every employee a written statement of particulars of employment (so operators have to do this whether they like it or not)

  • secondly, a properly drafted employment contract helps to ensure that the correct contractual structure is in place if and when things go wrong; and sooner or later something will go wrong.

Contractual protection

Regulation (EC) 561/2006, the well-known drivers’ hours rules that operators should be familiar with, provide that:

A transport undertaking shall not give drivers any payment, even in the form of a bonus or wage supplement, related to distances travelled and/or the amount of goods carried if that payment is of such a kind as to endanger road safety and/or encourages infringements of the Regulation, and a transport undertaking shall organize the work of drivers in such a way that the drivers are able to comply with the regulations and shall make regular checks to ensure that the regulations are complied with.

(paraphrased from articles 10(1) and 10(2) of the regulations)

On the employment side, Section 3 of the Employment Rights Act 1996 requires that the written statement of particulars shall include a note specifying any disciplinary rules applicable to the employee or referring the employee to the provisions of a document specifying such rules which is reasonably accessible.

Read together, the obligations on operators marry the employment and road transport regimes relatively harmoniously, ie

  • to have statements of particulars (usually contracts) in place, schedule drivers’ duties properly and to supervise their work effectively.

Operators should view their legal obligations to have contracts and systems in place as a positive aid to ensure compliance with the regulations and, in so doing, make sure that their drivers and vehicles are safe. If operators have to put everything in place because the rules require them to do so whether they like it or not, their focus should be directed to getting the most out of the work that they have to do anyway.

Next steps

So what should operators do next?

  1. Start with an up-to-date list of all employees. Divide them into different categories: office staff, drivers, and workshop etc.

    — Then divide each of those groups into difference classes: full time, part time, self-employed and agency.

  2. Check to see what documents are available for each employee in each category and each class.

    — Determine whether the documents available are up to date and have been drafted by advisers who know about transport and know about the operator’s business.

  3. Check that the contracts refer to handbooks or other policies. If so, do those additional documents exist. If they do, check to make sure that they are up to date and have been drafted by experts.

    — Then, when everything is up to date, operators must make sure that all the information has been circulated and that meaningful efforts have been made to ensure that employees (especially drivers, fitters and members of the traffic office — but really, everyone) has read and understood it all.

For self-employed staff, make sure they are actually self-employed and if there are any doubts, take advice. For agency drivers, read the agency agreement(s) and make sure that the agencies who are supplying the drivers are doing what they have promised to do, and that they are recording everything done to evidence that work.