Decision

Decision for Genesis 2014 (UK) Ltd (OD2018567)

Published 10 February 2021

WEST MIDLANDS TRAFFIC AREA

1. DECISION OF THE TRAFFIC COMMISSIONER

2. PUBLIC INQUIRY HELD IN BIRMINGHAM ON 19 NOVEMBER 2020

OPERATOR: GENESIS 2014 (UK) LTD

LICENCE OD2018567

3. Background

Operator details

Genesis 2014 (UK) Ltd (“Genesis”) holds standard international licence OD2018567, authorising 60 vehicles and 30 trailers. The directors of the company are Helen Walker and Tracy Greening. The nominated transport manage on the licence is David Hughes

Previous history

At a public inquiry in October 2018 I revoked the company’s previous operator licence (OD1134376) after I had found that Genesis had failed to declare, upon applying for the licence in 2014, that the then sole director and transport manager Marcus Hughes had been convicted in 2005 and 2008 respectively of two serious offences of: i) conspiring to supply cannabis, for which he had been sentenced to 12 years imprisonment; and ii) involvement in a £250 million VAT fraud (six years prison sentence). Had these offences been declared at the time of application, the application could not and would not have been granted.

As well as revoking Genesis’s operator licence and removing Marcus Hughes’ good repute, I disqualified Mr Hughes for five years both from acting as a transport manager and from holding an operator’s licence (or being the director of a company holding one). The disqualification ends on 1 January 2024.

I did not disqualify Genesis from holding a licence in the future. At the end of my written decision I stated that I could envisage that, if the company restructured itself so that Marcus Hughes was no longer a director, the controlling mind or majority shareholder of the company, an application for a licence could be considered.

Genesis did indeed subsequently make these changes and submitted an application for a new licence which I granted in February 2019. Over ensuing months, however, some evidence emerged which suggested that Marcus Hughes continued to be closely involved with the company. For instance, the company continued to communicate from the email address marcus@genesis2014ltd.co.uk.

At a preliminary hearing called to discuss this issue (as well as a requested increase in vehicle authority) I was told that Marcus Hughes’ company Greening Consultancy Ltd was used by Genesis to identify new business opportunities. In my decision at the end of the hearing, I warned Genesis’s new directors Helen Walker and Tracy Greening (Marcus Hughes’ life partner) that they must avoid the perception as well as the reality of Marcus Hughes having a controlling role in the business. I accepted that the use of his company on a consultancy basis did not transgress this.

4. DVSA investigation

In May 2020 I was informed of the results of an investigation carried out by DVSA into Genesis in late 2019. DVSA had received intelligence that Marcus Hughes was, despite his disqualification, still in control of the business. The investigation was carried out by traffic examiner Tracey Lowe: she also looked at tachograph data over the period August-October 2019 and found a significant number of serious drivers’ hours offences and a large number of occasions where vehicles had been driven with no digital tachograph card inserted. She subsequently interviewed 13 drivers about these drivers’ hours infringements and/or periods of driving with no digital tachograph card inserted. Six of the drivers said under caution that they knew Marcus Hughes as the manager. Some drivers commented that Mr Hughes was the person who encouraged them to remove their card and continue to drive. Mr Hughes was himself a driver who appeared to have committed offences but he was not interviewed by the Tracey Lowe as she found him to be intimidating in nature at the time. Ms Lowe’s conclusion was that Marcus Hughes was still the controlling mind of Genesis.

5. Driver conduct hearings

Concerned by this report, I decided to call Genesis to a public inquiry and the drivers concerned to parallel conduct hearings. I held conduct hearings for 11 drivers on 18 November 2020. At the end of these hearings I suspended the LGV driving entitlements of ten drivers for periods ranging from 14 days to 16 weeks for making false records (in all except one case, where a driver was suspended for daily driving time and daily rest offences). I took no further action against the driving entitlement of Marcus Hughes, as I was satisfied that there was no real evidence of any wrongdoing as a driver.

At the driver conduct hearing, one of the drivers showed me screenshots of exchanges of text messages he had exchanged with Marcus Hughes. They related in one case to a routine query about what order the driver should tip in, which Mr Hughes had answered. The other message involved the driver asking whether he was going to be sacked and Mr Hughes replying that “you are terminated on the Genesis contract”. Knowing that Marcus Hughes was not intending to be present at the following day’s public inquiry, I asked him at the driver conduct hearing what his explanation for these exchanges was, given that his only relation to Genesis was supposed to be as a consultant finding new business opportunities. Mr Hughes stated that his messaging account must still be being used by the company.

I also asked Mr Hughes why, if he no longer had any involvement with Genesis, several of its vehicles had recently been given personalised number plates beginning with the letters “MH”. Mr Hughes said that this was a coincidence. Other vehicles had been given different personalised plates with the letters “GN”.

Genesis’ solicitors were present as observers throughout the driver conduct hearings.

6. Public inquiry

The public inquiry was held in Birmingham on the following day, 19 November 2020. Present were directors Helen Walker and Tracy Greening, transport manager David Hughes, compliance manager Chris Gask and DVSA traffic examiner Tracey Lowe. The company was represented by counsel Stephen Walsh QC and David Hughes by counsel Ben Smitten. A day or so before the inquiry I was sent witness statements from David Hughes, Helen Walker and Tracy Greening for which I was grateful. In essence, those statements were to the effect that Marcus Hughes had no day-to-day involvement with the running of the company.

In advance of the inquiry, one of the drivers had written to my office with claims that Genesis was involved with PAYE and pension fraud. He provided some documentary evidence. My clerk anonymised the letter and evidence and served it on Genesis before the inquiry. Following representations from the company on this issue, I accepted at the inquiry that I was not the proper investigating authority for such allegations (strongly denied by the company) and have thus referred them to HMRC and the Police. I have not taken these allegations into account in my decision.

At the start of the inquiry Stephen Walsh QC immediately informed me that Marcus Hughes had resigned overnight from the consultancy arrangement with Genesis. He would henceforth have no dealings at all with the company. Genesis recognised that its arrangements with Marcus Hughes, his presence in their offices and the interaction between him and the drivers had at least the potential for misunderstandings about his role to arise. The consultancy arrangement between Genesis and Marcus Hughes had originally been on a verbal basis: in advance of the inquiry the company had sought to formalise this and a written agreement had been drawn up this week (although Marcus Hughes, in signing it, had backdated his signature to February 2020). In the event however, and given what had emerged during Mr Hughes’s driver conduct hearing the previous day, Mr Hughes had felt it better to sever all connections with Genesis.

On the company’s failure adequately to monitor and address drivers’ hours infringements and instances of driving without a card, Mr Walsh accepted that there had been failures in the company’s systems in August and September 2019. David Hughes the transport manager had been too thinly stretched. He had delegated tasks to a Nathan Baker who had failed to carry them out. David Hughes had assumed that Mr Baker was carrying out instructions but accepted that he had not checked. Chris Gask had then been brought in as a compliance manager to sort things out and to update procedures and policies. Mr Baker had eventually been dismissed in May 2020. It was now the company’s intention to appoint three transport managers in addition to David Hughes.

I asked David Hughes what the current rate of missing mileage was. He said he did not know. TE Tracey Lowe pointed out that, from her examination of recent records supplied by Genesis for the public inquiry there were still significant numbers of drivers’ hours infringements; infringement letters did not record any advice given to drivers; some drivers who had received final warnings still seemed to be employed even after committing further offences. Mr Walsh noted that driver Crutchley and other repeat offenders had now been dismissed.

Director Helen Walker accepted that Marcus Hughes should not have been exchanging text messages with drivers or purporting to dismiss them. Mr Hughes had perhaps been relaying a decision relating to the termination of a driver’s employment which he had overheard being made in the office. Tracy Greening explained that the personalised numbers which began with MH referred to Ms Greening’s and Mr Hughes’s son whose forename also commenced with an “M”. [I note that Marcus Hughes had not given this explanation the previous day].

Summing up on behalf of David Hughes, Mr Smitten made the following points:

• he was well-qualified and was himself a driver CPC trainer;

• he had attended a two-day transport manager CPC refresher course in March 2020;

• he now realised that he should have been producing driver infringement reports more frequently and tackling drivers about infringements sooner;

• the rate of infringement had started to reduce;

• drivers who were repeat offenders had been dismissed;

• the report by the vehicle examiner had been marked “mostly satisfactory”;

• drivers now had recruitment packs, induction packs, handbooks etc;

• improvements in compliance had been made and David Hughes’ repute should remain intact.

For the operator, Mr Walsh made the following points:

• the company accepted the seriousness of the drivers’ hours infringements and its failure to pick up on them, and that it should have supervised Nathan Baker more closely;

• Chris Gask had helped improve compliance since his arrival, although it was accepted that things were not perfect. The appointment of additional transport managers should assist;

• the company was well-funded, having a turnover of more than £10m and employed 90 people. Revocation of the licence would mean them losing their jobs and would be a disproportionate outcome;

• the company accepted that Marcus Hughes needed to be out of the way. It did not accept that he had ever been in control – he had good contacts in the industry and had been contracted with to bring in new business. The company accepted that it was not appropriate for Marcus Hughes to have had a desk in the office – this had led to a misunderstanding amongst some drivers about his role. Undertakings could be given that Marcus Hughes would have no role in the future;

• suspension of the licence would have a significant negative effect on the company’s contracts. It could survive a temporary curtailment of its licence, perhaps pending the arrival of the new transport managers;

Shortly after the inquiry I received from Genesis a report of recent missing mileage (not available at the inquiry). The report showed that there was still a considerable number of missing mileage incidents. Many of these had been accounted for by Chris Gask as yard movements or the vehicles being driven to maintenance facilities by mechanics. However, I noted that the reports identified driver Anthony Crutchley as driving without a card at various times on 23 and 30 August, 4, 6, 12, 13, 14, 15, 16, 20, 21, 22, 27, 28, 29 and 30 September, 4, 5 and 14 October 2020. Driver Crutchley was given a final written warning on 2 October 2020 and dismissed on 15 October. It is clear from this that the problems of driving without a card were not confined to August/September 2019, nor had they terminated with Nathan Baker’s departure in May 2020. Given that Anthony Crutchley had been identified in Tracey Lowe’s report as one of the most egregious offenders in driving without a card, it is astonishing that he was able to continue to do so with impunity until October 2020. I am unable to conclude that the company has set its house in order with the rapidity it tried to persuade me that it had.

7. Findings

After having carefully considered the evidence, I make the following findings:

• the company has failed to fulfil its undertaking to ensure that rules relating to drivers’ hours and tachographs would be observed. A significant amount of driving without a card and other infringements was found by Tracey Lowe over the period August-October 2019. Significant instances of driving without a card have continued right up to October 2020;

• Marcus Hughes has, despite his disqualification from holding a licence, continued to play a significant managerial role within the company. Six of the 13 drivers interviewed stated that they knew him as the boss (or some variant of this word). One driver was able to produce at his conduct hearing evidence that Marcus Hughes was involved, on a daily basis, in such matters as route planning and the dismissal of staff. I was unpersuaded by the company’s argument that drivers were unaware that his role had diminished: drivers have a good nose for who the real boss of their company is. I was equally unpersuaded by Marcus Hughes’ explanation that his old phone or account was being used by office staff, thus accounting for his name on the texts. It is clear to me that Marcus Hughes was ensconced in the office, giving instructions to drivers as much as he ever did.

• While I fall short of a finding that driving without a card was encouraged by the company (and by Marcus Hughes in particular), I find that the company certainly turned a blind eye to the obvious and continued to do so throughout much of 2020.

• David Hughes, the transport manager, is not of good repute. It is unacceptable in a transport manager of a licence of 60 vehicles to delegate everything to an unqualified member of staff and then simply assume – without ever looking at the evidence - that everything was being looked after satisfactorily. The fact that he was unable to tell me at the inquiry what the current situation on missing mileage was spoke volumes. As the information subsequently provided showed, the situation is still very far from satisfactory, showing that David Hughes still failed to get to grips with the issue even after becoming aware of the very concerning findings in Tracey Lowe’s report. Further, I find that David Hughes must have been aware of his brother Marcus Hughes’ continued involvement with the management of the drivers/business and that this was in defiance of his disqualification. I accept that, on the positive side, David Hughes has attended a two-day transport manager CPC refresher. But this is not enough to outweigh the failings listed above.

8. Balancing act, Priority Freight and Bryan Haulage questions

On the positive side of the balance are the points made by Mr Smitten and Mr Walsh in paragraphs 18 and 19 above. There is also the fact that Genesis has a mostly satisfactory degree of compliance on the maintenance and roadworthiness side. On the negative side is the extent and duration of the company’s failure to monitor and effectively deal with drivers’ hours infringements and driving without a card. Had this been the extent of the inquiry, I would have been contemplating suspending the company’s licence for a period of somewhere between 14 and 28 days. However, there is another large negative factor which to my mind decisively tips the balance.

When I revoked Genesis’s previous licence in 2018, I allowed a period of more than four months for the company to adjust its management and structure so that it could apply for a new licence and continue under that without having to cease operations. When the company appeared before me again in June 2019 I noted that there were some indications that Marcus Hughes continued to play a prominent role and emphasised that the company should be careful to avoid any perception – still less the reality - that this was the case. But instead of heeding this warning the company continued to entertain a situation in which Marcus Hughes had frequent contact with drivers and behaved in a manner which led some of them to believe that he was the boss. The exchange of texts which was produced by one of the drivers is concrete evidence of this. I find the (differing) explanations for these texts given by Genesis and Marcus Hughes unconvincing. Most often, if something looks like a duck, waddles like a duck and quacks like a duck, it is a duck. So it is that the most likely explanation for Marcus Hughes’ interaction with drivers and their view of him as the boss is that he was simply carrying on his leading role from pre-2019. Certainly, the relationship between Genesis and Marcus Hughes was much closer and more involved than would normally be understood by a “consultancy” arrangement (although I accept that the search for new business was one of Marcus Hughes’ activities and that Greening did invoice Genesis for work), a fact emphasised that no written agreement existed between company and “consultant” until a day or two before the public inquiry. A proper consultancy arrangement should have been put on a contractual footing from the very start.

I have deliberated at length about what to do about this licence, mindful of the significant numbers of staff employed by Genesis. I recollect that the company had a chance when it was granted the licence in March 2019 to start afresh without Marcus Hughes; it had a further chance after the preliminary hearing in June 2019. It ignored these chances and he continued to be closely involved, largely I believe because the company continues in essence to be his creature and has no independent life without him. In 2019 I tried to find a solution which would enable the company’s business to continue without Marcus Hughes, but ultimately this has proved unsuccessful. Because the company has failed to seize these opportunities I conclude that the answer to the Priority Freight question of how likely it is that the operator will comply in the future is “not likely” and that the company has lost its good repute.

In considering the Bryan Haulage question of whether the company deserves to go out of business I remind myself that had Marcus Hughes’ very serious convictions been declared as was required on application in 2014 there would have been no road haulage business in the first place, because the application could not have been granted. The company’s subsequent failure sufficiently to divest itself of his involvement means that, with reluctance, I conclude that the answer to the Bryan Haulage question is “yes”.

9. Decisions

In the light of the above, I am revoking the licence with effect from 0001 hours on 1 April 2021, pursuant to Section 26(1)(f) and 27(1)(a) of the 1995 Act. Because of the size of the operation and because there is no serious or immediate threat to road safety I am giving the company longer than usual to wind up its operations.

I have considered whether to disqualify Genesis and its directors under Section 28 of the 1995 Act from holding an operator’s licence in the future. I have decided not to disqualify the directors Tracy Greening and Helen Walker, because I accept that they were not cyphers and did carry out director duties (eg on the finance side) for the company. They may not have been fully aware (although they should have been) of the full extent of Marcus Hughes’ continuing interaction with drivers. I am however disqualifying Genesis from holding a licence in the future. It has shown over time that it is not capable of sufficiently disassociating itself from Marcus Hughes: its disqualification should therefore be largely coterminous with his own. I have therefore determined upon a disqualification period of three years, until 1 April 2024.

Having concluded that David Hughes has lost his good repute as transport manager I am also obliged to disqualify him from acting as a transport manager under any licence. I believe that his failures were largely of omission rather than commission so I am disqualifying him for the relatively short period of 12 months, until 1 February 2022.

Genesis should now nominate a different transport manager – presumably one or more of the three offered to me in addition to David Hughes - to oversee operations until the licence is revoked on 1 April 2021.

Nicholas Denton

Traffic Commissioner

29 January 2021