June 5, 2015

Transport and Logistics Newsletter

The Consumer Rights Act 2015: Implications for the Transport and Logistics Sector

Written by Nick Purnell

The Consumer Rights Act, described by the Department for Business, Innovation and Skills as "the biggest overhaul of consumer law for a generation", comes into force in October 2015. Anyone supplying goods, services or digital content to consumers and businesses in the transport and logistics sector should note in particular the following changes:

1.  Contractual status of information

Statements made by or on behalf of a service provider to a consumer will now form part of the contract if they are taken into account by the consumer when deciding whether to enter into the contract, or when making decisions in relation to the service after entering into the contract. For example, if a salesperson tells a consumer that goods will be delivered within two days, this could become the contractual delivery period.

2.  Fairness requirements

Where terms in a consumer contract are deemed unfair, they may not bind the consumer. The existing "fairness test" is retained in the Act, but terms relating to the price and contract subject matter will only be exempt if they are both transparent and prominent, i.e. in plain language, intelligible and brought to the consumer's attention. Terms which allow the trader to determine the price after the consumer is bound will be presumed to be unfair.

3.  New statutory remedies

Where a service fails to conform to the contract, consumers may now require repeat performance or, if this is impossible, a price reduction. Consumers are also entitled to a price reduction in other circumstances, e.g. where the trader fails to provide the services within a reasonable time.

Implications

Businesses in the transport and logistics sectors must ensure that the terms and conditions set out on websites and in other marketing material comply with the Act and that both staff and third party agents are aware of the new rights and remedies available to consumers. Statements made to consumers that are not intended to have contractual force should be qualified, and contracts must be easy for consumers to understand. Where a service falls short of the standards required, businesses should be prepared either to do it again or offer a discount.

DVLA changes – will it affect you?

Written by John Flaherty

From 8 June 2015, it will no longer be requirement for motorists to hold a paper counterpart of a driving licence. The Driving and Vehicle Licensing Agency (DVLA) have, following a review by the Department for Transport, introduced the change to provide a more efficient and simplified service. As a result the DVLA is seeking to modernise the way it stores and records details of motorists by scrapping the paper element of the two-part licence in favour of a new online system.

The original purpose of the paper counterpart of the driving licence was to record details not found on the photocard, in particular driving offences. However, from 8 June 2015 points will only be recorded electronically. Whereas fines will still have to be paid by a driver for any offence committed, the photocard will not be updated to account of any offences accrued. Accordingly, logistics providers looking to check driver records will no longer be able to check the paper license furnished by their drivers for possible offences but will instead have to check this information online or by post or phone.

Drivers will be able to provide evidence of their driving record by accessing the DVLA’s Share Driving Licence service and providing their employer or provider they deliver goods on behalf of with an access code which permits them checking their driver record. Alternatively a driver can now give the DVLA permission for their driving record to be checked by a business or a nominated person.

The holiday pay saga

Written by Chris Holme

Over the past year, the issue of holiday pay and how it should be calculated has become a hot topic for employers with a number of key cases being decided. There is still a great deal of uncertainty in this area but the key development has been the move towards "normal remuneration", which must be paid to employees taking holiday, having to include all payments intrinsically linked to the performance of contractual tasks. What this has meant in practice is that holiday pay should now include, in most circumstances, regular overtime that employees are required to work and commission, together with a number of payments that will be familiar to employers in the transport and logistics sector, such as shift and local allowances and call-out and standby payments.

So where does this leave employers looking backwards and forwards?

Looking backwards, employers are facing potential large liability for past underpayments of holiday pay that did not include the above elements. The government has legislated so that claims made from 1 July 2015 can only seek up to 2 years of back payments. However, claims brought before that date could potentially go back to 1998 when the Working Time Regulations came into force (although there are arguments available currently that a gap between any holidays of between 3 months or more prevents an employee claiming any earlier than that gap). Many employer are engaging with the Unions to deal with past issues and also to negotiate on the approach to take going forwards. This will involve choices over what elements of remuneration to include in holiday pay, in particular in relation to voluntary or irregular overtime, and what "reference period" to use to calculate the pay.