The Fair Work Commission Just Reached Into Your Supply Chain. Here’s What You Need to Do About It.

You don’t own a truck. You’ve never owned a truck. You wouldn’t know a terminal gate price from a garden gate. And yet, as of today, you might have legal obligations under a brand new Fair Work Commission order covering road transport supply chains.

Welcome to Australian workplace law, where fun arrives unannounced.

So what happened?

Diesel prices spiked. Geopolitical conflict in the Middle East sent global fuel markets into a spin earlier this year, and the ripple hit Australian owner-drivers hard. We’re talking businesses where a fuel bill that was $20,000 in February had climbed to $35,000 by March. For small operators with no bargaining power and fixed contracts, that’s not a squeeze. That’s an existential crisis.

The Transport Workers’ Union and the Australian Road Transport Industrial Organisation applied for emergency relief. The Federal Government fast-tracked new legislation (the Fair Work Amendment (Fairer Fuel) Act 2026, which received royal assent on 1 April). The Fair Work Commission convened an Expert Panel, held four days of hearings and on 20 April 2026 made the Road Transport Contractual Chain Order, which came into force today.

This is the first time clients at the top of transport supply chains have been subject to enforceable standards. So yes, it’s a big deal.

Who does this apply to?

More businesses than you’d expect. If your business sits anywhere near a road transport chain, you’re likely covered. That includes:

• businesses that deliver their own goods by road
• businesses that hire transport companies to move their goods
• businesses that receive goods delivered by road (yes, including retail shops, factories and warehouses)
• transport and freight companies of any size
• businesses that engage owner-drivers or gig workers for transport work

The order applies broadly, covering primary parties at the top of contracts, secondary subcontracting parties, road transport businesses, gig platform operators and both employee-like drivers and owner-drivers. It captures any arrangement where freight is moved by road under a chain of contracts.

The only carve-out is cash in transit. Everyone else: keep reading.

What do you actually have to do?

The core obligation is this: if fuel costs have gone up since 6 March 2026, the rates paid to the people doing the transport work need to go up to cover it.

Rate reviews must occur at least every 14 days while the order is in effect, reflecting the ongoing volatility in fuel prices. This is not a one-off. It’s a fortnightly obligation until diesel settles or the order is lifted.

The good news is you have flexibility in how you do it. Parties must adjust rates at least twice per month to reflect fuel cost movements. This can be achieved through direct rate increases, fuel levies, reimbursement mechanisms or existing rise and fall clauses tied to fuel benchmarks.

If you already have a fuel levy arrangement in place, you may be fine. The question is whether it actually covers the real increase since 6 March. If it does: carry on. If it doesn’t: adjust it now.

The part most SME owners will miss (until it bites them)

Here’s where it gets spicy.

If your business is sitting at the top of a supply chain, you’re not just responsible for what you pay your direct transport provider. You have an additional obligation to take reasonable steps to ensure everyone further down the chain is also meeting their obligations.

Picture it this way. You run a building supplies business. You hire a freight company to deliver your goods. That freight company subcontracts to a smaller carrier, who uses an owner-driver to do the actual run. Under this order, you’re not just responsible for what you pay the freight company. You’re also responsible for making sure that owner-driver at the bottom of the chain is getting a fuel adjustment. Even though you’ve never met them. Even though they’re three contracts below you.

Primary parties are also obliged to take reasonable steps to ensure that secondary parties adjust the rate in their contracts with counterparties to ensure the recovery of the increased cost of fuel.

That’s the part people will miss. And “I didn’t know” is not a defence.

One exception worth knowing: if you are a small business and you are not a road transport business, this downstream obligation doesn’t apply to you. A small retailer receiving stock deliveries, for example, is likely off the hook for everything below their direct contract. But you still have the primary obligation to adjust what you pay your own transport provider.

What does “reasonable steps” mean in practice?

The order doesn’t hand you a checklist, which gives some flexibility but also leaves room for interpretation if something goes wrong.

Practically speaking, reasonable steps would look like:

• contacting your transport provider in writing and asking them to confirm they’re complying
• requesting written confirmation that downstream rate adjustments are happening
• adding a compliance clause to your contracts when they’re next reviewed

Is it a paper trail exercise? Partly. But that paper trail is what protects you if a regulator comes knocking six months from now asking whether you took this seriously.

Practical steps for SME owners right now

If you use transport providers but you’re not in transport yourself:

1. Email your freight or logistics provider today. Ask them to confirm in writing that they’re complying with the order.
2. Check your contract. Does it allow for a fuel levy to be invoiced separately? Or do you need to formally vary the rate?
3. If you’re not a small business, take it one step further and ask whether they’re passing fuel adjustments through to any owner-drivers they engage.
4. Keep a record of all of the above.

If you’re a transport business:

1. Review every rate you pay to owner-drivers right now. Not next week. Now.
2. Fuel typically represents around 25% to 30% of total operating costs. Use the Australian Institute of Petroleum weekly diesel price index to calculate the increase from 6 March 2026 and adjust accordingly.
3. Issue the adjustment as a revised rate, a fuel levy or a reimbursement. Get it in writing.
4. Set a fortnightly review in your calendar. This is not a set-and-forget situation.

If you engage both a fleet owner and individual owner-drivers:

Both layers need to be adjusted. The obligation runs all the way down.

What if fuel prices drop?

The order will cease to apply if the national weekly average terminal gate price of diesel falls below $2.00 per litre, based on data from the Australian Institute of Petroleum. The Commission will review the order after its first month and then every three months.

So this isn’t permanent legislation. It’s a time-limited response to a specific crisis. But right now diesel is well above that threshold, so don’t hold your breath.

What happens if you ignore it?

This is not a soft advisory. An RTCCO is legally binding where the order applies to the person, and contravention of a term of an RTCCO is a civil remedy provision. That means financial penalties. Real ones.

The Commission went to considerable effort to make this order. The TWU applied, the Government legislated emergency powers to fast-track it, and a full Expert Panel of the Commission made it in under three weeks. There will be scrutiny. Treat it accordingly.

Still not sure where you sit?

If you’re reading this going “I think this applies to me but I’m not completely sure”, that’s actually the most important moment to get advice. Not after you’ve already had a complaint filed. Now.

At HR Gurus, we work with businesses across Australia on exactly these kinds of compliance curveballs that land without warning. We’ll tell you where you stand, what you need to do and how to do it without making it harder than it has to be.

Get in touch with HR Gurus and let’s sort it out before it becomes a bigger problem to fix.

 

This blog is general information only and does not constitute legal advice. If you need advice specific to your business, please contact HR Gurus or a qualified employment lawyer.