“Front” driver scheme costs haulier vehicles as it’s forced to employ staff

LZtrans Limited has also had its operator licence permanently curtailed from 12 to 10 vehicles following a public inquiry that identified shortcomings in drivers’ hours management, defect reporting and record keeping. The full decision, dated 19 June, was published by the Traffic Commissioners on 17 September.

Commissioner raises concerns over driver employment model

LZtrans was authorised for 12 vehicles and 12 trailers, with eight vehicles in possession at the time of the inquiry.

A central issue was the operator’s practice of engaging drivers through limited companies set up by the drivers themselves. The Commissioner stressed that employment status is fact-specific, but concluded that the arrangement used by LZtrans did not reflect genuinely independent businesses.

According to the decision, the drivers were not owner-drivers, could not delegate their work or determine their own working patterns, and drove routes under the operator’s direction. Young said the arrangement appeared to be a device used to reduce costs associated with employment, including income tax, National Insurance, pension contributions, sickness and holiday pay. He also concluded that it undermined fair competition.

The decision referred to the Upper Tribunal’s 2020 Bridgestep judgment and RHA guidance cited in that case, which stated that it was very rare for a lorry driver who was not an owner-driver to be legally self-employed.

During the inquiry, the operator was warned that its licence could be at serious risk if the arrangement continued. After two adjournments to allow the directors to consider the matter, LZtrans offered an undertaking to move to employed drivers. The company was given four months from the hearing to make the change, setting a deadline of 29 September 2026.

Drivers’ hours and record-keeping failures

The inquiry also examined wider compliance issues. The case had followed the roadside stop of a driver who was not recording other work correctly and had committed a drivers’ hours infringement. The Traffic Commissioner found that although LZtrans monitored infringements in practice, it lacked adequate written policies, disciplinary records and formal systems.

Problems were also identified with walkaround checks and defect reporting. Drivers sometimes reported faults directly by telephone rather than recording them in writing, while tyre and wheel-checking arrangements were described as insufficiently systematic.

The Commissioner nevertheless found the directors credible and noted there was no evidence of deliberate dishonesty or safety-critical vehicle defects. LZtrans has therefore been allowed to continue operating, but its licence has been permanently curtailed to 10 vehicles. It must appoint a transport consultant to improve its compliance systems and commission an external audit, with the report and any resulting action plan due by 30 November.

Young warned that failure to comply with the undertakings, or evidence of poor compliance in the audit, could put the operator’s licence at risk of revocation in future.