Businesses that procure, arrange or supply road transport services may be subject to a binding Fair Work Commission order if they are within the road transport contractual chain and class of persons covered by that order, even if they do not directly engage the driver or subcontractor. Under the new regime, orders may regulate matters such as payment terms, fuel cost recovery, rate review mechanisms and other contractual arrangements permitted by the Fair Work Act 2009 (Cth) across a road transport contractual chain.
How the New Road Transport Regime Works
Chapter 3B of the Fair Work Act 2009 (Cth), which commenced on 26 August 2024, allows the Fair Work Commission to make road transport contractual chain orders. Section 15RA defines a road transport contractual chain as a chain or series of contracts or arrangements under which work is performed for a party to the first contract or arrangement by a regulated road transport contractor, a road transport employee-like worker under a services contract, or an employee, and in which at least one party to the first contract or arrangement is a constitutional corporation. An order is legally binding on the persons in the contractual chain who are covered by it and may therefore affect parties beyond those that contract directly with the worker performing the work.
The Fuel Cost Recovery Order: Dormant for Now, but Still in Force
The Commission’s first order, the Road Transport Contractual Chain Order – Fuel Cost Recovery – 2026, commenced on 21 April 2026 in response to significant increases in fuel prices. The order required covered parties across relevant road transport contractual chains to make additional payments to providers of road transport services, including covered small fleet operators, non-employed truck drivers such as owner-drivers and employee-like workers performing digital labour platform work, to help offset increased fuel costs.
The fuel-adjustment obligations stopped applying from 7 June 2026 because the diesel-price trigger was no longer met. The order itself remains in effect, although its obligations do not currently apply. Those obligations may apply again if the trigger conditions are satisfied. The order demonstrates how quickly new obligations can arise in response to changing industry conditions. Businesses should retain records showing whether the order was complied with from 21 April to 6 June 2026 and ensure that systems and processes can be reactivated if its obligations apply again.
Why the Reforms Matter Beyond Fuel Costs
The Fuel Cost Recovery Order addressed a specific issue, namely rising fuel prices. However, the Fair Work Commission’s powers extend further. Subject to the requirements and permitted terms in the Fair Work Act 2009 (Cth), future orders may regulate matters including payment times, fuel levies, rate review mechanisms, cost recovery and termination across covered road transport contractual chains. Businesses that procure, arrange or supply road transport services should therefore monitor current proceedings and assess each final order against their contractual arrangements and compliance obligations.
Which Businesses Should Review Their Arrangements?
- transport operators engaging owner-drivers, small fleets or subcontractors;
- principal contractors, freight forwarders and logistics coordinators;
- manufacturers, suppliers, retailers and construction businesses procuring road freight; and
- digital platforms facilitating transport or delivery work.
Coverage depends on the structure of the contractual chain and the terms of the particular order. A business should not assume it falls outside the regime merely because it does not employ drivers or contract directly with the person performing the work. Depending on the terms of the order, obligations may extend to parties higher up the chain even where they have no direct relationship with the worker performing the transport work.
What Businesses Should Do Now
- Map the chain: identify each customer, intermediary, contractor, subcontractor and driver relationship.
- Check coverage: test each arrangement against the legislation and any applicable order.
- Review contracts: check pricing, fuel levies, pass-through rights, payment, termination and change-in-law provisions.
- Keep records and monitor developments: preserve calculations, invoices and notices, and assign responsibility for tracking new Commission orders.
How We Can Help
We advise transport operators, subcontractors, customers, freight forwarders and digital platforms on coverage, compliance and contract amendments. We can map the contracting chain, review pricing and pass-through mechanisms, assess historical compliance, identify potential risk areas and help prepare businesses for future orders.
If your business procures, arranges or supplies road transport services, now is the time to review your contracts and compliance processes. Taking proactive steps before a new order is made, or before the obligations under the Fuel Cost Recovery Order apply again, can help minimise disruption and ensure your business is prepared to respond quickly to changing obligations.
If you would like advice on how these changes may affect your business, or assistance with reviewing your contracts and compliance processes, please contact our Commercial Services team.
Sources
- Fair Work Act 2009 (Cth), including Chapter 3B
- Fair Work Legislation Amendment (Closing Loopholes No. 2) Act 2024 (Cth)
- Fair Work Ombudsman, “Fairer Fuel: Reforms to road transport orders”
- Fair Work Ombudsman, “Fuel cost recovery: Road transport order issued”
- Fair Work Commission, fuel cost recovery major case (MS2026/1)
- Fair Work Commission, fuel cost recovery major case (MS2026/1), including the Road Transport Contractual Chain Order – Fuel Cost Recovery – 2026 and Decision [2026] FWCFB 95
- Fair Work Commission, “About road transport contractual chain orders and guidelines”
