Transport Service Licence – Are you “fit and proper”?

Most operators in the industry have had to go through what is called a “fit and proper” person test. A majority do not know anything about this test or that they have gone through the test and passed it. It is only when there is a problem that one realises that there is such a test and that you may not be ticking all the boxes, or the right boxes, to pass it.

The test is applied to anyone who holds a heavy vehicle or transport service licence under the Land Transport Act. So why is the test so important? Simply put, you cannot be a holder of a TSL or HT licence, if you are not a fit and proper person. Section 30C of the Act states that the two main considerations when assessing whether a person is “fit and proper” are the interests of public safety and the need to protect the public from serious or organised criminal activity. I have to admit, we have not seen a case where the latter consideration was an issue. The main issue always is the interest of public safety. There is no real guidance on what interest of public safety” is and therefore NZTA is able to interrupt this how they can. That means speeding, COF failures and roadside inspection defects all can be bundled into this “public safety” net. There are some things that the Act states should be considered. These include:

  • a person’s criminal history,
  • any offending by the person in respect of transport-related offences (including any infringement offences):
  • any history of serious behavioural problems:
  • any complaints made in relation to any transport service provided or operated by the person or in which the person is involved
  • any history of persistent failure to pay fines incurred by the person in respect of transport-related offences:

We have seen a spike in NZTA questioning the fitness and propriety of many operators. The main issues that we have seen are:

  1. Vehicle maintenance – a 100% COF pass rate does not mean that an operation is running smoothly. NZTA is now considering VCA reports to see what issues vehicles have been presented with. NZTA’s position is that vehicles should be presented for a VCA after it has gone through an internal servicing regime and should not have any/many issues. VCA should not be used to identify issues and carry out targeted maintenance. If an audit is carried out, NZTA will review the internal servicing and maintenance regime. The roadside VIR’s are also considered when assessing a company’s safety. It is interesting that NZTA gives little weight to their ORS ratings when considering a fit and proper test.
  2. Driver offending – driver offending falls into many different categories. Speeding is one issue. The first thing every business needs to ensure is that there is a system whereby all speed camera tickets are transferred to the name of the driver responsible. The information on how this can be done is on the back of the ticket. However responsibility does not end there. The employer needs to ensure that there is a system that addresses this offending and processes are put into place to prevent and reprimand such behaviour. The next common issue is worktime and logbook offending. NZTA places a positive duty on employers to ensure that all drivers are complying with their worktime and logbook obligations. NZTA has an expectation that employers would monitor and audit drivers. Such processes not only act as a deterrent for drivers, they on most occasions prevent offending.

We are continually seeing a tougher approach to compliance. Whether we agree with the approach or not, we have to live with it, if we are to continue operating. The recent changes at NZTA seem to have led to increased compliance activity. Action has been taken against some large operators, including revocation of TSL’s. This has a drastic effect on the industry as it is already struggling with smaller margins.

If NZTA is of the opinion that you do not pass the test, NZTA will revoke your licence. But before it does so, it should give you a chance to address the issues that it has identified. If you are given such an opportunity, you need to take immediate steps to protect and improve your operation. Not doing enough or anything is not an option at that stage. But engaging with NZTA on your own is not always advisable. You should seek advice from NRC or us on how you go about the process and what you need to do. In the next article, we will address what happens if a licence is revoked.

Questions? Need more information?

Fortune Manning advises the transport industry on all aspects of the law, including licensing issues, legislative changes, privacy and employment matters. If you would like to find out more about the issues discussed above, or any other legal issue, give the team at Fortune Manning a call on 0800 4FM LAW (0800 436 529).