Decision

Written decision for Baldwin Skip Hire Ltd (OF1036215), Stanley Alan Mattioli and Roy Weir – former transport managers, and Baldwin Skip Hire 2020 (OF2031164)

Published 26 October 2020

In the Eastern Traffic Area.

Traffic Commissioner’s written decision.

1. Background

Baldwin Skip Hire Ltd holds a Standard National Goods Vehicle Operator’s Licence authorising 5 vehicles and 2 trailers. The Directors are Robert Anthony Baldwin, Anthony Walter Baldwin and Ella Websdale. The nominated Transport Managers were Stanley Alan Mattioli from December 2014 and Roy Weir under an Acquired Rights certificate from January 2018. I can find no record of notification that Mr Mattioli was unable to fulfil his duties following his visit to Italy.

The Operating Centre is at Walnut Tree Farm, Silver Street, Besthorpe, Attleborough NR17 2LF. The Preventative Maintenance Inspections are said to be carried out in-house and at 6 weekly intervals. The licence is subject to additional undertakings for roller brake and decelerometer testing.

In correspondence I was told that this is a family run business, which was initially established as a partnership in 1987 and incorporated in June 2003. Robert Baldwin is described as the only ‘active director’. Mr Anthony Baldwin and Ms Ella Websdale are now both retired. There are said to be 11 employees (including Robert Baldwin). It also engages between 4 and 6 agency staff at any given time. The business is involved in skip hire and waste processing. As at March 2020, the operator was running 5 vehicles: RX59 AJO, GJ63 FYN, GN63 FBK, MX06 GWZ, AY10 EEW, and 3 trailers: C125279, C303883, and C231912, with another spare. It is only C125279 in general usage now.

The record shows that the operator and its then Transport Manager, Ella Websdale, were called to Public Inquiry on 24 June 2014 (page 137). Ms Websdale resigned as a consequence. The operator was given the strongest possible warning as to its future conduct, with personal warnings issued to all three Directors. Undertakings were offered to the Deputy Traffic Commissioner at a Preliminary Hearing held in Cambridge on 13 October 2017 (page 139), when Mr Mattioli was considering retirement.

I am told that the business has a turnover in the region of 1.25 to 1.5 million pounds per year and that the main income is obtained through waste recycling. It has approximately 400 skips and undertakes about 18 skip exchanges a day.

Baldwin Skip Hire (2020) Ltd seeks a Standard National Goods Vehicle Operator’s Licence authorising 6 vehicles and 3 trailers. The sole Director is Robert Anthony Baldwin, who has nominated himself as the holder of a Certificate of Professional Competence.

The proposed Operating Centre is at Walnut Tree Farm, Silver Street, Besthorpe, Attleborough NR17 2LF. The application proposes that vehicles and trailers should be subject to Preventative Maintenance Inspections carried out in-house at 6 weekly intervals.

2. The Hearing

Messrs Birketts responded to correspondence dated 6 May 2020 (page 141) indicating a proposal to revoke on behalf of the operator and requested that the application be heard at the same Public Inquiry. The operator was notified on 6 July 2020 of the intention to list for Public Inquiry. The Public Inquiry was listed for 6 August 2020, in Tribunal Room 1 of the Office of the Traffic Commissioner in Cambridge. The operator was present in the form of Robert Baldwin; the applicant was also present through Mr Baldwin; both were represented by Ms Philippa Dyer, a solicitor, of Birketts LLP.

Stanley Alan Mattioli appeared but Roy Weir failed to attend. He remained nominated on the Operator’s Licence at that time, so I asked Mr Baldwin for information. He told me that “he did not want to come; he wants to retire and doesn’t want to come up here”. I was satisfied that I could proceed in his absence, but it then emerged that the bundle sent by OTC had not arrived with Mr Mattioli. It subsequently emerged that his neighbour had signed for the papers. He indicated that he also wished to retire and was content to proceed but I was concerned as to the fairness of the position that he should have opportunity to consider the matters raised. In the circumstances I felt obliged to adjourn the hearing to another date, 10 September 2020, but reserved the case to myself.

On 24 August 2020, my office was informed that Roy Weir and Stanley Mattioli had been removed as Transport Managers on 22 August 2020. An application to add Mazvydas Mikalajunas was submitted on 15 August 2020. The operator requested a Period of Grace. An adverse finding was made under section 27(1)(a), in order to make that direction to run until the Public Inquiry or for 3 months (whichever was sooner). On 7 September 2020, Ms Dyer informed me that neither Mr Weir nor Mr Mattioli would attend the reconvened hearing.

3. Issues

The Public Inquiry was called for me to consider whether there were grounds for me to intervene in respect of the operator’s licence and specifically by reference to the following sections of the Goods Vehicle (Licensing of Operators) Act 1995:

• 26(1)(b) - condition to notify convictions, matters of repute and which might affect financial standing
• 26(1)(c)(i) and (ii) - relating to those convictions
• 26(1)(c)(iii) - prohibition notices
• 26(1)(f) - whether the operator has not honoured the undertakings signed up to when they applied for their licence, namely that vehicles would be kept fit and serviceable;
• 26(1)(h) - a material change in the circumstances, namely that the company may no longer be of good repute, that the company may no longer be of the appropriate financial standing;
• 27(1)(a) - that the operator continues to be of good repute, have financial standing and is professionally competent.
• 28 - disqualification

The then nominated transport managers, Stanley Mattioli and Roy Weir were called to consider whether they have exercised continuous and effective management of the transport undertaking and therefore remain of good repute, so as to continue to enjoy their Certificates of Professional Competence. They have now resigned but their repute remained an issue for me to consider.

The Public Inquiry was listed to allow the applicant opportunity to pursue its application and specifically in relation to the following requirements:

• 13A(2)(b) – to be of good repute
• 13A(2)(c) – to have the appropriate financial standing
• 13A(2)(d) – to be professionally competent by reference to a Transport Manager who meets section 13A(3)(a) and Article 4
• 13C(4) – satisfactory facilities and arrangements for maintaining the vehicles in a fit and serviceable condition

Finance was submitted covering January to May. The requirement for this licence is £25,800. The average available for that period was calculated and exceeded the requirement. The applicant relies upon a closing balance, which appears to have resulted from a loan from W C Baldwin & Son to be repaid 6 months from the start of trading and secured against property. Under cover of a letter dated 7 September 2020, I was informed that WC Baldwin & Son is a partnership between two of the named: Directors, Anthony Baldwin and Ella Websdale. Walter C Baldwin was Robert Baldwin’s grandfather. However, the land is owned by Anthony Baldwin. The operator pays what is termed a ‘nominal rent’. The applicant will apparently be charged a higher rent.

The application proceeds based on a personal loan from Anthony Baldwin to Robert Baldwin to be secured against property held by Robert Baldwin. It proposes the transfer of the Operating Centre from the current operator to the applicant under section 33 and schedule 4 of the Act.

4. Summary of Evidence

In a letter received on 10 February 2020, the Managing Director of Baldwin Skip Hire, Robert Anthony Baldwin, declared convictions relating to breaches of health and safety duties (page 145) following a six-day trial in March 2019 over the death of an employee in 2017. The company had previously pleaded guilty to a charge under the Health and Safety at Work Act 1974 for failing to discharge general health, safety and welfare. Appearing at Norwich Crown Court in May 2019, Mr Baldwin was jailed for 12 months and the company Baldwin Skip Hire was fined £75,000. The applicant has provided a letter of explanation from solicitors Birketts LLP suggesting that Baldwin Skip Hire will go into administration due to not being able to afford to pay.

A subsequent letter of 20 February 2020 (page 146) confirmed that the operator had pleaded to an offence where its employee, James Criddle, had died through a breach of the duty owed under section 2 of the Health and Safety at Work etc. Act 1974. Mr Baldwin was convicted after a trial under section 37 of that Act, so that the operator’s offence was committed through his consent, connivance or neglect as a Director.

Mrs Bell describes Robert Baldwin as the ‘brains’ of the operation, whilst his parents retain an interest in the business. Mrs Bell also recounts how Mr Baldwin thought that the equipment was safe and compliant even though there were no safety guards or external stop button. 15 pages of Mr Baldwin’s various qualifications are to be found in the bundle from page 180, including IRTEC accreditation and his CPC from January 2019.

The correspondence dated 18 March 2020 demonstrates the difficulty in obtaining the correct details surrounding the conviction and sentence. A copy of the relevant memorandum for Mr Baldwin was obtained in June 2020. The above conviction(s) were not declared by the company until 9 months after the event. The delay notifying this conviction was attributed to Mr Baldwin receiving an immediate custodial sentence. In representations the operator accepts that there was a lack of effective communication in relation to the conviction of the company and Mr Baldwin. I am asked to accept that this was a difficult time for the business personally and professionally. In evidence I was told that Robert Baldwin signed the 2019 checklist shortly having been released from imprisonment on 19 August 2019. He described being dazed by the experience. Audrey Robinson prepared the checklist and he signed it. This gives me grounds to question the arrangements which are said to work effectively, and which are proposed as part of the application. Mr Baldwin told me that he relies on her for much of the paper administration.

On 15 May 2017, James Criddle was using a compact screening machine belonging to the operator, to separate large pieces of rubble and debris from excavated soil. While using that machine, Mr Criddle’s clothing became caught because of a missing guard and he was asphyxiated. A letter from Ms Dyer dated 25 March 2020 (page 156) indicates that the operator pleaded guilty in 2018 to an offence contrary to section 33 for breaching the duty imposed by section 2 of the Health and Safety at Work Act 1974. I am told that the operator accepts that it had failed to provide a safe system of work for the operation of a compact screening machine, which was not guarded. The second-hand machine had been purchased by Robert Baldwin on behalf of the business.

Mr Baldwin was acquitted of gross negligence manslaughter and convicted after trial of the offence to which I have referred. The letter indicates that Mr Baldwin accepted that the ultimate responsibility for health and safety management at the site was vested in him. His plea indicates otherwise. I am confused by the reference to that culpability arising as he was ‘the main director’.

Ms Dyer supplied me with a sizeable report prepared by Beverley Bell Consulting Ltd into the activities of the operator. That report very sensibly avoids any attempt to deflect the safety breaches, which resulted in the death of Mr Criddle.

Mrs Bell did not meet with Mr Mattioli who was still unable to carry out his duties at the date when she carried out her assessment in March 2020. She did assess Mr Weir’s abilities. It is hearsay but I include it here. She recounts him describing his responsibilities as “I assist with bits of paper and look round the yard I checked there was nothing lying around which shouldn’t be” and “Robert is hands on and a bit of a control freak and I check things when Rob asks me to help”. Mrs Bell set Mr Weir some simple tasks from which she concluded that he was unable to meet the statutory duty. He was unable to answer simple questions regarding maintenance and stated, “I don’t have anything to do with maintenance”. She anticipates my concerns at his apparent response to the amount of missing mileage, which he attempted to attribute to shunting within the yard. As the operator acknowledges the amount of missing mileage was too prevalent to be dismissed in this way. In March 2020 Mrs Bell recommended that the transport arrangements be reviewed, and that Mr Weir assume other responsibilities.

In the absence of either gentleman there was no evidence to address my concerns around the relative responsibilities of Mr Mattioli and Mr Weir. The ‘contract’ such as it is (at page 202) suggests that Mr Weir has a subservient role in respect of the Transport Manager duties. This is not recognised in the statute, as the declaration, which Mr Weir signed in December 2017, makes clear. In representations dated 7 September 2020, I am told that this was in response to the Preliminary Hearing in 2014 but that ‘subservient’ is too strong. I can only refer to the contract itself. I am not particularly attracted to arguments which appear to demur from the simple statutory requirement for any named Transport Manager to exercise effective and continuous management. I note that Mr Weir completed refresher training in October 2013, which would have stressed that duty. I compare Mr Weir’s ‘contract’ with the example of a driver contract at pages 246 to 256. I am also aware of the comprehensive employee handbook, issued in July 2017. The health and safety sections are difficult to comprehend given the context of this hearing.

It would appear that, even on the evidence of the operator’s consultant, Mr Baldwin, aided by his partner, Audrey Robinson, had essentially assumed responsibility for the effective management of the transport undertaking. As far as I was aware those duties were being undertaken by Mr Mattioli and Mr Weir. Hearsay evidence recounted in Mrs Bell’s report suggests that Mr Weir checked the work of Ms Robinson in filing the paperwork. She was also told that Mr Mattioli goes through the vehicle files and signs the defects and checks the Preventive Maintenance Inspection sheets.

In written representations dated 3 August 2020, i.e. 2 days before the first hearing, I was informed that Mr Baldwin “had been intending to take over as transport manager for some time prior to the HSE case”. He apparently passed the CPC prior to his conviction and sentence. It is accepted in representations that: “as a result of the health and safety case against him, it was not appropriate for him to be added to the licence and indeed it would have led to questions being raised by the Traffic Commissioner”. This was confirmed in evidence: in the context of the criminal prosecution, Mr Baldwin felt that he should take responsibility for compliance. He described how it was him that undertook all the checks even during the trial. He was still responsible for the maintenance activities but also the maintenance documentation and went through everything to confirm that it was as required. He also completed training to obtain his qualifications. He described picking up advice during those courses and bringing it back to be implemented, to which the former Transport Managers just agreed.

I am asked to credit the operator that Mr Baldwin had recognised a need for a change. At no time was I informed that Mr Baldwin and Ms Robinson had been undertaking much of the day to day role of transport manager. I remain unclear how checks by Mr Weir or Mr Mattioli would amount to effective and continuous management. Even after receipt of Mrs Bell’s report (which was also copied to my office) there was no attempt to correct the position. In examination, Mr Baldwin accepted that he knew they were not meeting the statutory duty but there was a conscious and commercial decision for them to remain in post pending determination of the application. I am told that Mr Baldwin wishes to take over control of this side of the business. I refer to the additional improvements below. On the evidence presented this appears to have already occurred and without authority. The question is, how effectively. Mrs Bell refers to a diligent operator, but this did not extend to a correct or accurate notification.

I have noted the following observations made by Mrs Bell during her audit in March 2020. The operator does not employ many drivers or other employees and there is no formal system or process for recruitment. The operator seeks to minimise the risks from the employment of agency drivers. The number has worked for the operator for a long time but there is no formal induction and training process or even medical checks. That means there has been no formal check on the driver’s digital card before they are permitted to drive. There has been no check on their infringement history either. I do note that licence checks were being carried out monthly and I have seen printouts from the DVLA website. The operator is apparently committed to one session of driver professional development each year with regular updates on drivers’ hours and tachograph as well as driver walk round checks. This work is outsourced to a training company.

From the test given to Mr Weir I note that Mrs Bell had opportunity to consider the vehicle maintenance files. My copy of the index at page 416 is illegible. She indicates that she saw evidence of annual test certificates, payment of vehicle excise duty and insurance. She had opportunity to consider the forward planner in place and I have seen the photographs included as an annex to her report, apparently completed by Ms Robinson. She was told that maintenance inspections are being carried out every four weeks as against the declared six weeks. Mr Baldwin carries out these inspections himself with the assistance of another member of staff. I refer to their qualifications below. Mrs Bell’s report alerts me to incidents where driver detectable defects appear to have been left until the preventive maintenance inspection date. In her report she states that the main offender was Robert Baldwin. Mr Baldwin explained what occurred in his evidence: drivers, including him, were identifying defects but assessing them and determining that they were not safety critical. He used the example of a crack in a marker light but unfortunately none of that was recorded.

The operator apparently employs a nil driver defect reporting system. I was concerned to note that drivers “generally” record the walk round check on their tachographs. The operator has apparently implemented a process where they are only paid for work that is recorded. I share Mrs Bell’s consternation at the audit process. I am unaware of the RHA ever having advised that completing the walk round with the driver was an effective check. Roller brake tests are apparently conducted on laden vehicles and carried out by a third-party supplier. I have seen evidence of the documents around the wheel retorque procedure. Mrs Bell recommended that the policy required updating. However, she was apparently pleased with the tyre management policy, but checks of tyre pressures were not acceptable. I would adopt her warning to the operator at page 175 although I note that processes are now in effect.

I am told that tachograph data is analysed by TWC data and that reports are provided on a weekly basis. The drivers apparently download their digit cards at the operating centre every Friday night or Saturday morning. The data is then sent to TWC by email. The vehicle unit is currently downloaded at the safety inspection every four weeks, as confirmed in Mrs Bell’s report. Mr Baldwin was advised to carry out a vehicle unit download on a weekly basis. There is also a clocking in record which Mrs Bell records as representing unnecessary crosschecks. The operator has been advised that drivers should be paid from their tachograph records and elsewhere in the report it was suggested that this has been adopted to incentivise the recording of driver walk rounds. Mr Baldwin receives a report from TWC data about missing mileage, but he has also devised his own paper-based system. Again, Mrs Bell noted that this system was time consuming and vulnerable. None of the descriptions in this section of her report suggests that the named transport managers are involved in this part of the transport undertaking. Ms Robinson apparently indicated that Mr Baldwin is also responsible for the routing and journey planning. This appears to have been confirmed by appendix 14 to Mrs Bell’s report (page 392 onwards). To quote Mrs Bell, Mr Baldwin appears to be doing far too much. She questions whether these duties are consistent with the responsibilities as managing director.

DTC, Ms Davis, recorded the annual test pass rate as 71.43% at the Preliminary Hearing in October 2017. There has been some improvement to the 81.25% recorded by Mrs Bell but the initial pass rate over two years remains at 66.67% (page 133) around issues with AY10 EEW. On my dip sampling of the records for GJ63 FYN and GN63 FBK, I noted that laden rolling road brake performance tests are occurring and over the recommended 65% of the Goods Vehicle Weight. There was one issue with GJ63 FYN on 29 May 2020 where there was insufficient load on axles 3 and 4, which appears to be a question of load spacing. There continued to be the odd driver detectable defect appearing at inspections from the beginning of 2020, but recently there were none.

5. Deliberations

In this case it is difficult and perhaps false to make large distinctions between the entities. However, in the case of the existing operation, the legal onus is on me to satisfy myself whether there is sufficient evidence of any shortcomings. In the case of the applicant, the onus is on that company to satisfy me that the legal criteria are met. In deciding on the proportionality of any intervention against the existing licence I have regard to the impact. The potential employment by the new entity has a far more limited relevance to the application, particularly where the operator itself has offered surrender. I am invited to accept the surrender of the current licence as a precursor to grant. I am told that 11 jobs will be lost if I do not grant the application. With respect to the representations, that appears to suggest a reversal of the legal onus where the applicant must satisfy me that the statutory criteria are met.

5.1 Operator

I am satisfied that there is the required evidence to the civil standard that I should make adverse findings under sections 26(1)(b), 26(1)(c)(i) and (ii), (c)(iii), (f) and (h).

Miss Dyer’s representations of 7 September 2020 suggest that the position in relation to the Transport Managers has not been perfect. That is an understatement. It may have been intended that Mr Baldwin assume those responsibilities, but whilst they were named on the licence, they retained the responsibilities, as Mrs Bell correctly identifies in her audit report. I am unclear why the Directors of this operator could conclude that it was fit and proper to leave the names of those two gentlemen attached to the licence. It was clear from Mr Mattoli that he was desperate to retire and Mr Weir could not even bring himself to attend even the last hearing.

The Senior Traffic Commissioner’s Statutory Document No. 3 on Transport Managers records that assistance may be provided to a Transport Manager. However, where two or more persons are named as Transport Managers then they jointly share the statutory duty. I require specific evidence if I am to make findings which distinguish between the two former Transport Managers; neither has attended the substantive hearing. The claim in representations, that the systems for continuous and effective management have steadily evolved, since the RHA audit in 2016, misses the point. It was not for Robert Baldwin or any of the Directors to act so that Mr Weir and Mr Mattioli were ‘liberated’ from their responsibilities as Transport Managers. I knew nothing of their desire to retire, until the first hearing. I can give credit to the operator for commissioning the RHA audit and for employing quarterly roller brake testing, but Mrs Bell has usefully confirmed that the named Transport Managers did not exercise effective and continuous management.

I am referred to the nomination of Mr Mikalajunas, who gained his Certificate of Professional Competence in Lithuania. He is proposed as an external Transport Manager and plans to devote a total of 8 hours per week to this operation on a Wednesday. He has other Transport Manager responsibilities on OF2031393 for Maz Road Limited (which supplies his email address) of 5 hours per week and on OF1147411 for Cardinalis Developments Limited, of 20 hours per week. His nomination risked the impression of an administrative exercise, given the stated intentions behind the application. However, I heard how he started in employment last week and, whilst it was proposed that he only work Wednesdays, he was in fact present at 5 am on Monday to oversee the driver walk round checks and attended again on the day of the hearing. Mr Baldwin indicated that he is on a 6-month contract and he would like to keep him on, even if the application is granted. Mr Mikalajunas did not attend so that I might make my own assessment.

I refer to the evidence summarised at paragraphs 26 and 27 above. I am told in recent representations that the driver recruitment process has been developed with interviews, licence checks and a driving assessment, by Mr Baldwin. This now includes a two-week training period overseen by Mr Baldwin, which has recently been employed for a new driver. I am assured that Mr Baldwin rarely drives and that he is assisted with maintenance by Shane Wiley who undertakes 3 mornings per week sometimes more (apparently 6 at the moment), and more generally by Audrey Robinson.

The submissions acknowledge that I am entitled to make a finding of a loss of repute against an individual, if he or she has more than one conviction for a serious offence. It would be entirely erroneous to think that I am precluded from making a finding against the operator based on its conduct.

The written representations are predicated on the basis that the only shortcoming was the failure to notify the convictions and anything more would be disproportionate. The fact that the failure was repeated and ongoing, aggravated by a misleading renewal form, appears to have escaped the Directors, but I was also misled as to the role of the two named Transport Managers who, as far as I was aware, were actually exercising effective and continuous management. It does not assist Mr Mattioli and Mr Weir that the persons responsible for managing the business bear the ultimate responsibility for ensuring that the road transport aspect of the business operates in compliance with the regulatory regime (2014/024 LA & Z Leonida t/a ETS) because their responsibilities and those on the Director were not mutually exclusive. They have resigned but that does not place them beyond my jurisdiction. On the evidence I have before me, I would be very concerned if they were to seek to be appointed as Transport Managers again. I am told that they have retired, and they have chosen not to attend today, which makes it difficult to set any rehabilitative measure. I am satisfied that I must make a direction in respect of each of them, in effect disqualifying them from reliance on their Certificates of Professional Competence. They may apply to vary that direction at which point they would need to satisfy the presiding commissioner as to their ability to then discharge the statutory duty.

The representations seek to persuade me that there is no “pattern of ongoing and apparently consistent non-compliance” by the operator and refer to the Tribunal decision in 2014/008 Duncan McKee & Mary McKee. What the representations omit from the reference to 2014/008 Duncan McKee & Mary Mckee, is the Upper Tribunal’s reminder that “this is a civil commercial jurisdiction with a strong emphasis on firm and consistent regulation, public protection and fair competition.

If I had been told that Mr Baldwin was fulfilling all these roles, I would have queried his capacity and the ability to meet the statutory duty, as per 2011/036 LWB Ltd. In those circumstances notification of his imprisonment would have attracted even greater concern. I must respectfully disagree with Ms Dyer when she suggests that “Mr Baldwin is trained in maintenance and has undertaken and passed the CPC; resultantly the requirement for professional competence is met.” Even putting aside, the repute test, that suggestion ignores the statutory duty and Article 4 of Regulation (EC) 1071/2009. It would appear that Mr Mikalajunas is genuinely involved with this operator’s licence. He started work very recently. He was not present at the hearing, but his appointment addresses the adverse finding under section 27(1)(a) and discharges the Period of Grace. It also offers the prospect of future compliance.

However, it is difficult to reach a positive conclusion about future compliance (2009/225 Priority Freight) when the application refers to the operator being put into administration. The initial representations indicate that the operator has failed to reach an accommodation with Mr Criddle’s estate to minimise a claim valued between £500,000 and £800,000. Mr Baldwin has apparently been advised by an insolvency practitioner to undertake a pre-packaged administration. It was confirmed in subsequent representations that civil proceedings were issued against the operator in November 2019. It has not proved possible to settle that claim and a formal defence has been filed. There is a suggestion that Robert Baldwin may be joined to those proceedings but that appears subject to permission of the Court. The question of administration arises due to questions around whether insurance extended to the waste transfer operations. In the absence of insurance cover, the operator may be made insolvent. It remains the case that the operator is recorded as ‘active’ on the Companies House register. Evidence of financial standing has been provided and there is no basis to act in that regard.

As the Statutory Directions on Decision Making acknowledge, they can only offer a starting point and the list of positive and other features is not exhaustive. I was referred to the response to previous interventions such as the Preliminary Hearing, the implementation of recommendations from the RHA, such as driver eye-tests and to additional areas identified ion Mrs Bell’s audit. Those actions did not extend to the Transport Managers and it was only in advance of the second hearing, that I became aware of appropriate action. That element of persistent failures may be limited but it was based on a commercial decision. It allowed ineffective management by the former Transport Managers to continue. As Mrs Bell illustrated, their analysis of drivers’ hours records was ineffective. I also noted the historic annual test results, although much appears to be attributable to repeat issues with AY10 EEW.

I can give credit for the following:

• Mr Baldwin, Ms Robinson and drivers have attended training on driver’s hours and driver defect reporting.
• A new retorquing process has been honed; Mr Baldwin oversees the drivers undertaking driver checks of tyre pressures and wheel retorquing. A form is completed and is stored in the vehicle file.
• Driver defect reporting has been revamped as per Mrs Bell’s recommendations
• an external company undertakes driver drug testing.
• A new driver induction procedure has been introduced, overseen by Mr Baldwin, who mentors the driver before he is allowed to take vehicles out alone.
• Drivers are paid from the tachograph records of work, as per Mrs Bell’s recommendations.
• Mr Baldwin no longer drives and “is able to focus on exercising continuous and effective management of the transport operation”.
• Ovidijus Karvelis (“Ollie”) will undertake the IRTEC accreditation scheme, although this has been delayed as a result of the current crisis.
• In addition the company uses a self-employed fitter (Mr Wiley), who has the IRTEC accreditation, 3 ½ days per week in order to assist with maintenance and inspections.

It was accepted in representations that there were grounds to consider taking regulatory action. The convictions of the operator and Director are a matter of record. I refer to the additional shortcomings above. This is a significant impact on repute. I am asked to weigh the application for a new licence and the proposed surrender of the current licence, into the balance. That is not the correct approach - taking all relevant matters into consideration, the case falls within the ‘moderate’ category. For reasons, which should be apparent, I reject the suggestion that a warning would be appropriate. I return to the McKee decision – there have been repeated failures to be open and frank. As was made clear in NT/2013/082 Arnold Transport & Sons Ltd v DOENI, the provisions refer to an individual’s or company’s fitness to hold a licence and are entirely relevant to the consideration of repute. That decision: “underlined the word ‘fitness’ in both these provisions because it is critical to understanding the breadth of the requirement to be of good repute. It means, for example, that an operator who cannot be trusted to comply with the operator’s licensing regime is unlikely to be fit to hold an operator’s licence”.

Mr Baldwin repeatedly referred to trust in the former Transport Managers. Trust is an important element in operator licensing. I refer to a long-decided case: 2006/277 Fenlon:

Traffic Commissioners must be able to trust operators to comply with all the relevant laws, rules and regulations because it would be a physical and financial impossibility to police every aspect of the licensing system all day and every day. In addition, operators must be able to trust other operators to observe the relevant laws, rules and regulations. If trust between operators breaks down and some operators believe that others are obtaining an unfair commercial advantage by ignoring laws, rules or regulations then standards will inevitably slip and the public will suffer.

In 2019/025 John Stuart Strachan t/a Strachan Haulage, the Upper Tribunal confirmed the relevance of deterrent action: “one of the aims of the regime is deterrence, both for the appellant and for operators as a whole, who might be tempted to flout the system”. I sought to explore the impact of regulatory intervention. I was told that business planning has been made more difficult by the uncertainties caused by the current pandemic. The business model relies on a quick turn-over of bins and skips. There are two administrative assistants in the office, who concentrate on this work. 70% of the work is to service existing contracts. There are between one and two vehicles which are not in use all the working time, but a driver is employed for every vehicle. It was accepted that a curtailment would have a lesser impact than other potential interventions, although the operator would struggle to find alternative work for two drivers for a sustained period. Deterrence is intended to ensure that there is no repeat. The operator’s licence will be curtailed by two vehicles for a period of 14 days from 23:45 on 21 September 2020. The operator has until that time to nominate the two vehicles which will be subject to directions preventing their operation, under section 26(6).

5.2 Former Transport Managers

The Statutory Guidance on Transport Managers makes very clear that a Transport Manager must always be more than just in name. A Transport Manager risks their repute if they find themselves in this position. If a Transport Manager finds themselves overridden by the operator to the point at which the Transport Manager no longer has the requisite continuous and effective responsibility, the Transport Manager must first notify the operator in writing and then, if the matter is not resolved, is expected to take appropriate action. In certain cases this may even include resignation, rather than remain nominated and attempt to carry on their duties when being expressly prevented from doing so by their employer. It is accepted that persons who control an entity which operates heavy goods vehicles are expected to have sufficient knowledge to exercise proper oversight and the ultimate responsibility for supervising maintenance compliance rests on the operator and failures by employees or outside contractors is a matter for mitigation only. In this case neither Mr Mattioli nor Mr Weir attended the substantive hearing, but I am satisfied that they were aware of the limited extent to which they were exercising the Transport Manager duties; even when Mr Baldwin was serving his sentence of imprisonment, neither alerted me to this fact. Both were content to remain named on this operator’s licence, which continued even after the first hearing. I have already referred to the importance of trust in this jurisdiction. Neither has addressed me on the impact but I am satisfied that I must make an adverse decision in respect of each of them under section 27(1)(b) and direct that they be prevented from relying on their respective Certificates of Professional Competence. In their absence I cannot set an appropriate rehabilitative measure. I am told that they both wish to retire but they are at liberty to seek to vary that direction by application.

5.3 Applicant

Section 13(6) in effect means that I must grant the application unless sections 13A, C and D are not met. As the Tribunal explained in 2009/264 Alistair Ronald Brown, consideration of an application requires more than a simple tick box exercise.

Paragraph 1 of Schedule 3 gives traffic commissioners discretion to have regard to any relevant matter in determining whether individuals or companies are of good repute either upon application or at any time during the life of the licence. The operator was convicted of a single offence. Robert Baldwin was also convicted of a single offence and was sentenced to 12 months imprisonment on 17 May 2019. Mr Baldwin will not be rehabilitated under the law 16 May 2024. I do note that the sentencing judge decided that it was not appropriate to disqualify Mr Baldwin from acting as a Director.

It is intended that Mr Baldwin will remain, but as a sole director of the company and he has also applied to be the Transport Manager. The licence administration will continue to be undertaken by Audrey Robinson. She has yet to pass her CPC and will be trained on routing and scheduling, drivers’ hours’ rules and the Working Time Directive. She attended RHA Transport Administrator training in November 2017 and has taken on the recommendations in Mrs Bell’s report. Drivers’ hours compliance will continue to be the responsibility of Mr Robert Baldwin and Ms Robinson, driver training was delayed by the lockdown. Mr Baldwin will continue to undertake the maintenance with assistance. Reference was initially made to a Mr Karvelis, who has yet to gain his IRTEC accreditation scheme, but latterly to Mr Wiley, who is qualified. In evidence Mr Baldwin told me that there are one-man elements of the inspection where he is content to leave his assistant. The applicant proposes retaining visual checks for drivers, but additional retorque procedures will be adopted with Monday morning checks of two drivers. To quote Ms Dyer, ‘the running of the transport operation will continue as before’.

On all the evidence, I must be concerned by that prospect. I remind myself of the Tribunal’s comments in 2011/036 LWB Ltd

…it is for the applicant or operator to satisfy the Traffic Commissioner that the person concerned can fulfil the role of transport manager. That role is defined in s.82(1) of the 1981 Act, which provides that it means in relation to a business: “an individual who, either alone or jointly with one or more other persons, has continuous and effective responsibility for the management of the road passenger transport operations of the business”. It follows, in our view, that when nominating an individual as a transport manager, (whether on an application for a licence or as an addition to or replacement for an individual who has acted as transport manager), it will be necessary to show that the person concerned will be able to exercise ‘continuous and effective responsibility’. That means that the Traffic Commissioner must be in a position to assess how much time the individual will devote to the business in question, what other demands that person will have on their time and what contractual relationship exists between the individual and the operator.

The application proposes that Mr Baldwin will continue as Managing Director, but without the assistance or checks of other Directors. He will continue to be involved with the maintenance, although he indicated a willingness to allow his assistant, Mr Wiley, to undertake parts of the inspection. He will continue to undertake the scheduling and routing for an hour every afternoon. Ms Robinson will continue to provide the administrative support. It was Mr Baldwin who inducted and trained the recently recruited driver. He describes being the first person in and the last to leave. There is the prospect of continuing support of Mr Mikalajunas, for at least 6 months, but not in a formal capacity. He has only just started work and I have not had the opportunity to meet or assess his abilities. I refer to the compliance whilst Mr Baldwin had the ‘assistance’ of two formally nominated CPC holders.

Even if I could be satisfied that Mr Baldwin has capacity to fulfil the role of Transport Manager, and I retain doubts based on previous history, I must be satisfied as to repute. I am invited to conclude that the new entity is not a front for an illegal operation. That is correct. The applicant has been very forthcoming about the reasons for the application. It is submitted that this represents a genuine reason for forming a new company. As far as I can see, the new entity has been formed because of a claim against the existing operator and in order to avoid those liabilities. I remind the operator and applicant of paragraph 55 of Statutory Document No. 1:

the use of “Phoenix” arrangements to avoid previous liabilities may amount to unacceptable business practice (2010/083 Paul Frederick Boomer t/a Carousel and see Statutory Guidance and Statutory Directions on Legal Entities). A phoenix company is where the assets of one limited company are moved to another legal entity (sometimes referred to as a ‘pre-pack’) but with no obligation to pay the failed company’s debts. The conduct of the company is an important factor when considering repute and any suggestion that a company has for example favoured trade creditors over the Crown will prompt questions as to the motive behind such actions (2014/064 Alan Michael Knight – the amount owed to the Crown creditors was close to 90%). Commissioners will scrutinise such applications carefully to ensure the promotion of the principle of fair competition.

My decision above refers to the issue of trust. In its simplest form this relates to reliability and honesty. The operator and applicant have been very open and honest about the intent behind this application. However, there is a wider meaning connected to justice and a confident expectation that the right decision will be reached. It is proposed that I permit the application to allow that business to continue trading as another entity and avoid the liabilities arising from a criminal breach of duties. I have given considerable thought as to whether this is a proper use of the jurisdiction. Good repute is not fully defined in the legislation and even the case law. I refer to the view of the Tribunal expressed in 2014/077 Leedale Ltd: “Public Inquiries are hearings conducted by statutory regulators whose functions are to ensure road safety, fair competition and compliance.” The grant of this application would not, in my opinion, deliver fair competition or encourage compliance with wider safety duties.

For the reasons set out above, I remain to be satisfied that the requirements of section 13A(2)(b) and (d) are met. Having considered the application at Public Inquiry, the application is now refused on that basis.

RT/TC/14/9/20