The Fair Work Commission (Commission) has the power to regulate supply chains in the transport industry. These can override existing commercial arrangements and contracts.
The Fair Work Commission has made the Road Transport Contractual Chain Order – Fuel Cost Recovery – 2026 (RTCCO), which is now in force. From 21 April 2026, most businesses in road transport contractual chains are impacted. This order will stay in place until the weekly average national terminal gate price for diesel falls below $2.00 per litre, with a review after one month and then every three months after that.
The order is designed to make sure higher fuel costs are passed through the chain rather than being absorbed by contractors and other owner drivers at the end. Contract rates may now need to be adjusted so that increased fuel costs are recovered. Both “rate” and “increased cost of fuel” are defined terms in the Order:
“Rate” means the contracted, standard, ongoing, or usual rate or amount paid by one person covered by this Order to another for the performance of work in the road transport industry on or before 6 March 2026, including an hourly rate, a running rate, a total amount, or any other form of payment or combination of the foregoing.
“Increased cost of fuel” means the difference between the cost per litre for the type of fuel used to perform the relevant work in the road transport industry at any given time and the cost as it was on or before 6 March 2026.
Who is impacted?
A road transport contractual chain covered by this order can include all parties in the road transport supply chain from top to bottom, including:
If you deliver your own goods by road, such as a concrete company
If you engage a transport company to deliver goods by road, such as Ikea
If you receive goods transported by road, you could be a factory or a retail shop
If you are a transport company
If you engage owner drivers (or gig workers)
If you transport passengers, such as a bus company.
The only part of the transport industry excluded is the cash in transit industry.
Small businesses (employing fewer than 15 permanent FT or PT employees as per the Fair Work Act) that are not road transport businesses need to take no action because of this order. Small businesses that are road transport businesses will be impacted. The Commission did not set a national formula to manage the fuel cost recovery. Businesses can use different approaches, including rate increases, fuel levies, reimbursements, rise-and-fall clauses, cost models, or other benchmarking methods, provided the result is real fuel cost recovery.
You can adjust rates in a variety of ways:
If you have operated with fuel levies or fuel rate reviews in the past you can continue if it meets the fuel adjustment obligations.
The fuel adjustment obligations can be satisfied by any of the following:
In relation to the third option listed, the Order allows a business to use one reasonable method to calculate fuel cost increases for a group of drivers or workers, rather than doing a separate calculation for each one.
If your business sits anywhere in a road transport chain, now is the time to review contracts, pricing models and any fuel adjustment clauses. Fixed-price and long-term arrangements may need particular attention where fuel cost increases are currently being borne downstream.
Businesses affected by the order should seek advice early if they are considering contract changes or responding to claims under the new régime.
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