Fuel cost recovery: Road transport order issued
Published 20 April 2026 | Updated 19 May 2026
The first road transport contractual chain order takes effect from 21 April 2026.
It sets rules for fuel cost recovery for parties in a road transport contractual chain.
On this page:
- Key points
- Road transport contractual chain orders
- Now in effect: Fuel cost recovery order
- What you can do now
- How we can help
- Keep up to date
- More information
Fair Work Commission review
The Fair Work Commission is holding a hearing into the fuel cost recovery order on Monday 25 May.
The hearing will allow the Fair Work Commission to review the order and give parties an opportunity to give feedback. To learn more, access the Statement [2026] FWCFB 99 (28 April 2026) (PDF).
The Fair Work Commission is the national workplace relations tribunal.
We are monitoring these proceedings and we'll make updates to our information as required.
Key points
- The Fair Work Commission (the Commission) has made an order that sets urgent rules for fuel cost recovery in the road transport industry.
- The order applies from Tuesday 21 April 2026 and is known as a road transport contractual chain order (RTCCO).
- The RTCCO requires parties across road transport contractual chains to pay more to providers of road transport services because of recent increases in fuel prices. Providers include small fleet operators, non-employed truck drivers such as owner-drivers and employee-like workers who perform digital labour platform work.
- Manufacturers and suppliers, large retailers and construction companies are examples of who the new obligations to increase rates apply to.
- Existing arrangements used to manage fuel price changes can satisfy the requirements set by the RTCCO (for example, contracts that provide ‘rise and fall’ rates).
- The Commission will review the order in late May 2026 and then every 3 months.
Road transport contractual chain orders
Road transport contractual chain orders (RTCCOs) set rules about pay and conditions for workers, businesses and others in road transport contractual chainsA chain or series of contracts or arrangements where:work is performed for a party to the first contract in the chain or series by a regulated road transport contractor or a road transport employee-like worker under a services contract or by an employeeat least one party to the first contract or arrangement is a constitutional corporation.. This includes for regulated workersA person who is an employee-like worker or a regulated road transport contractor. and regulated businessesA business that hires contractors in the road transport industry or a digital platform operator who enters into or facilitates a services contract under which employee-like workers perform work..
RTCCOs are made by the Fair Work Commission (the Commission), the national workplace relations tribunal. These orders can include rules about:
- fuel levies
- rate reviews
- cost recovery
- payment times
- termination.
RTCCOs are legally enforceable.
To learn more about RTCCOs and the Commission, go to Regulated worker and road transport contractual chain standards.
You can also watch a short animation about RTCCOs:
Now in effect: Fuel cost recovery order
The Commission has now approved the first RTCCO: Road Transport Contractual Chain Order — Fuel Cost Recovery 2026 .
Below we summarise the order, including:
- why it’s being made
- who it covers
- who it doesn't cover
- what rules it sets
- when it applies
- how disputes are dealt with
- penalties for not complying with it.
Why it's being made
The RTCCO has been made because there is fuel supply disruption in Australia caused by the ongoing conflict in the Middle East.
Its purpose is to help road transport industry businesses and workers recover fuel costs.
The Transport Workers’ Union of Australia (TWU) and the Australian Road Transport Industrial Organization (ARTIO) applied together for this RTCCO. It follows recent changes to the Fair Work Act to help fast-track applications for RTCCOs: Fairer Fuel: Reforms to road transport orders.
Who it covers
The RTCCO covers all work performed in the road transport industryAn industry that covers:the road transport and distribution industry (excluding the transport of livestock)long distance operations in the private road transport industry (excluding the transport of livestock)the waste management industrythe cash in transit industrythe passenger vehicle transportation industry, but not including electric tramway, monorail or light railas defined by their awards. (excluding cash in transit).
It covers the following workers, businesses and others in a road transport contractual chain performing work in the road transport industry:
- primary parties
- secondary parties
- regulated businesses
- regulated road transport contractors (such as owner-drivers)
- road transport employee-like workers (such as workers for a digital labour platform).
To read definitions of some of these terms, go to Key terms.
Who it doesn't cover
The RTCCO doesn’t apply to employees of primary or secondary parties.
It also doesn’t apply to primary parties in a road transport contractual chain who are in that chain because they’re:
- passengers being transported in a motor vehicle, limousine, hire car, bus or coach, or
- an individual who has arranged the delivery (or consignment) of a thing that’s solely for private or domestic purposes.
The RTCCO doesn’t apply to the livestock industry (including transporting or dealing with livestock).
What rules it sets
The order requires primary parties and secondary parties in road transport contractual chains to adjust their rates fortnightly or twice each calendar month to ensure recovery of the increased cost of fuel. This is so the contractors and workers they engage are compensated for increases in fuel cost.
Primary party
Primary parties are people, businesses or others in a road transport contractual chain who are parties to the first contract or arrangement in the chain.
Primary parties are the parties at the top of the chain. That is, the ones who enter into a contract because one of the parties needs road transport services. For example:
- manufacturers and suppliers
- large retailers
- construction companies.
Under this RTCCO, a primary party must now adjust the rate paid to the other primary party (or parties) to the contract to an amount that ensures that the other primary party is compensated for any increase in fuel costs.
Primary parties must do this:
- each fortnight, or
- twice each month.
Those primary parties must also take reasonable steps to ensure that secondary parties (that is, parties to contracts further down the contractual chain) engaging regulated road transport contractors and road transport employee-like workers in the same contractual chain adjust the rate paid to those workers by the amount necessary to ensure that they are compensated for any increase in fuel costs. This requirement to take reasonable steps doesn’t extend to small business employersA small business employer is an employer with fewer than 15 employees at a particular time. If an employer has 15 or more employees at a particular time, they are no longer a small business employer. When counting the number of employees, employees of associated entities of the employer are included. Casual employees are not included unless engaged on a regular and systematic basis. who aren’t road transport businesses.
Existing rate adjustment mechanisms provided in certain instruments or arrangements may meet these obligations. Go to Existing instruments.
Reasonable steps
What are considered reasonable steps will depend on the circumstances. This includes the specific arrangements that make up the road transport contractual chain.
Reasonable steps aren’t intended to place an excessive administrative burden on primary parties.
Reasonable steps are intended to make sure primary parties ask secondary parties if and how they adjust rates, so that the regulated road transport contractors and road transport employee-like workers they engage recover their fuel costs. Primary parties can then get assurance from secondary parties that they adjust the rates they pay affected contractors and workers, so that they can recover their own fuel costs.
When considering what a primary party must do to comply with the reasonable steps obligation, the following factors may apply:
- size and nature of the primary party
- resources of the primary party
- nature of the contractual relationships in the road transport contractual chain (including any existing rate adjustment mechanisms)
- the level of control and visibility that the primary party has over the arrangements between the secondary parties and the regulated road transport contractors and road transport employee-like workers they engage
- any other relevant matters.
The following are measures a primary party could take to meet the reasonable steps obligation:
- ensure that secondary parties are aware of their obligations under the RTCCO and the consequences for not complying with it
- engaging in discussions or negotiations with secondary parties and asking questions to gain an understanding of:
- how secondary parties engage regulated road transport contractors and road transport employee-like workers to perform work in the chain
- how fuel costs impact that work
- the secondary parties’ arrangements with those same contractors and workers, including how and what rates they pay to them
- whether any existing instruments or arrangements would satisfy their rate adjustment obligations, and how the secondary parties adjust the rates they pay to affected contractors and workers in the chain
- requesting an assurance, documents or other evidence from secondary parties that they’re adjusting the rates they pay these contractors and workers to cover increased fuel costs – however, parties are not required to seek commercially sensitive information
- setting an expectation that secondary parties will comply with the RTCCO and agreeing on a process for adjusting rates.
The above measures aren’t a complete list. Some of these may not be necessary or appropriate depending on the circumstances.
Primary parties may also need to take other measures to comply with the reasonable steps obligation.
Example: Primary party obligations under the RTCCO
Robbie is the owner of large food manufacturing business Foody 123. It processes and sells commercial food products directly to retailers and hospitality clients.
Robbie engages a freight company to handle the logistics and transport of his products to customers. This includes to retail stores and distribution centres.
This arrangement forms part of a road transport contractual chain.
Foody 123 and the freight company are at the top of the chain. Both are ‘primary parties’ as they’re the parties to the first contract in the chain.
The freight company maintains its own fleet of trucks and has employees directly employed by the business. The freight company also engages owner-drivers to cover some deliveries. These owner-drivers are engaged under services contractsA contract for services that relates to the performance of work under the contract by an individual and has the required constitutional connection (for example, a constitutional corporation is a party to the services contract). with the freight company and are paid a fixed rate for their services. The freight company is also a ‘secondary party’ in the chain as they are also a party to subsequent contracts with owner-drivers.
When Robbie hears about the RTCCO, he realises that it might affect his business. He first reads the RTCCO and then the information on this page.
Robbie learns that Foody 123 is a primary party in a road transport contractual chain. It now must:
- adjust the rate it pays to the freight company to cover the increased cost of fuel, and
- take reasonable steps to ensure the freight company adjusts the rates it pays to owner-drivers to cover their increased costs for fuel.
After learning this, Robbie arranges a meeting with the freight company. He wants to discuss if there have been increased fuel costs for the freight company’s business and the owner-drivers it has contracts with.
Robbie asks to see the invoices that have been submitted to the freight company by owner-drivers and proof of payment. This is to ensure all have been compensated for increased fuel costs and helps Robbie ensure Foody 123 meets its obligations under the RTCCO.
Robbie then adjusts the rate Foody 123 pays the freight company to cover the freight company’s increased costs for fuel.
Robbie schedules another meeting with the freight company to review fuel costs in a fortnight and discuss adjusting rates.
Example: Primary party obligations under the RTCCO
Mark is the operations manager for a retailer, Retail XYZ, with retail stores located across multiple suburbs.
As part of its operations, Retail XYZ has a distribution centre that dispatches stock to its retail store locations. Retail XYZ engages a freight company to transport goods between the distribution centre and stores through a contractual arrangement. The contract has an agreed fixed rate for fuel costs as a component of the price of services provided by the freight company.
The freight company also engages owner-drivers under services contracts as part of its own operations. The owner-drivers invoice the freight company weekly and are paid a rate that includes a per km and per hour component.
These arrangements form a road transport contractual chain. Retail XYZ, the freight company and the owner-drivers are all covered by the RTCCO.
The contract between Retail XYZ and the freight company for the transport of goods is the first contract in the chain. The services contracts between the freight company and the owner-drivers are subsequent contracts in the chain.
Under the RTCCO, Retail XYZ has the obligations of a primary party and the freight company has the obligations of a secondary party.
When Mark hears about the RTCCO, he’s a bit sceptical about it. He thinks fuel costs will decrease and doesn’t think there’s any point trying to understand and comply with the order. But then he learns that it’s unlawful to not follow the RTCCO’s rules and that courts can impose penalties against businesses if they don’t comply with it.
Mark reads the RTCCO itself and the information on this page to help him understand his obligations as a primary party. He then reviews his contractual arrangement with the freight company. He finds that there’s no arrangement in his contract that provides for ‘rise-and-fall’ rates that would help meet his obligations under the RTCCO.
To meet his obligations then, Mark decides to meet with the freight company to discuss how Retail XYZ will adjust the rate it pays to ensure the freight company and owner-drivers recover their increased fuel costs. As the freight company also has obligations under the RTCCO and its services contracts with the owner-drivers, Mark and the freight company must work together to find a prompt and workable solution.
After several video conference calls, they agree:
- on the amount that the cost per litre of fuel for the freight company and the owner-drivers has increased by since 6 March 2026
- that the freight company will make a direct reimbursement to the owner-drivers to cover the increased fuel costs they have already incurred
- that Retail XYZ will make a direct reimbursement to the freight company to cover the increased fuel costs (including the cost of reimbursements paid to owner-drivers) they have already incurred
- that going forward, to meet each party’s obligations under the order, the rates paid by Retail XYZ (to the freight company) and the freight company (to the owner-drivers) under their respective contractual arrangements will be adjusted in accordance with an agreed rise and fall formula.
Mark and the freight company also agree to meet regularly to ensure that they’re each complying with the RTCCO.
Secondary party
Secondary parties are people, businesses or others in a road transport contractual chain who are the parties to a subsequent contract or arrangement in the chain. For example:
- transport companies
- fleet owners
- smaller logistics operators.
Under this RTCCO, a secondary party must pass on the increased amount paid to them by the primary party to the other secondary party to the contract. This could be to:
- another business (that then has to continue passing on the payment down the chain), or
- a regulated road transport contractor or road transport employee-like worker.
This means that any increased amounts paid by primary parties must end up with the regulated road transport contractor or road transport employee-like worker so that they are compensated for any increases in fuel costs.
Secondary parties must do this:
- each fortnight, or
- twice each month.
Existing rate adjustment mechanisms provided in certain instruments or arrangements may meet these obligations. Go to Existing instruments.
Rate requirements
Primary and secondary parties can adjust rates by:
- changing the rate or a component of the rate
- introducing a fuel increment or levy
- making a direct reimbursement or offset of money spent on the increased cost of fuel, or
- any combination of these 3 measures.
Existing instruments
Existing rise-and-fall rates already in some workplace instruments may satisfy the RTCCO’s fuel cost requirements, including:
- in any relevant State or Territory industrial instrument
- in any relevant collective agreementAn agreement registered with the Fair Work Commission that sets out minimum terms and conditions for regulated workers. or services contractA contract for services that relates to the performance of work under the contract by an individual and has the required constitutional connection (for example, a constitutional corporation is a party to the services contract). , or
- via any ongoing or special arrangement between persons in a road transport contractual chain.
In addition, any rate changes made before 21 April 2026 can be considered when determining whether the above obligations on primary and secondary parties have been met.
When it applies
The RTCCO applies from 21 April 2026. It overrides any other minimum standards ordersThe Fair Work Commission has the power to make minimum standards orders (MSOs) for regulated workers. These are sets of rules about pay and conditions for regulated workers. MSOs are legally binding. while it’s in operation.
The RTCCO's rules on fuel costs stop applying when the weekly average national terminal gate price for diesel falls below $2 per litre. This is measured in the weekly diesel price report of the Australian Institute of Petroleum.
The Commission will review the RTCCO after one month of operation and then every 3 months.
How disputes are dealt with
Workers and businesses must first genuinely try to resolve a dispute between themselves.
If a dispute can’t be resolved this way, the dispute can be taken to the Commission.
The Commission may resolve this dispute through conciliationA conciliation is a confidential and less formal dispute resolution process between the parties to a workplace dispute at the Fair Work Commission. or mediationA voluntary and confidential process where a mediator helps parties negotiate with each other to resolve workplace complaints. , or another method it considers appropriate.
If the dispute can’t be resolved this way, the Commission may use arbitrationA voluntary and confidential process where a mediator helps parties negotiate with each other to resolve workplace complaints. instead (if both parties agree).
Parties can be represented by a union or employer association at any stage in the dispute when it’s before the Commission.
For more information on taking a dispute to the Commission, visit Dealing with disputes under dispute resolution procedures.
Penalties for not complying with it
Businesses and workers covered by this RTCCO have to follow its rules.
It’s unlawful to contravene the rules of an RTCCO. Courts can impose penalties against businesses, individuals or other persons if they don’t comply with one.
Key terms
Below are definitions of some key terms:
| Key term | Definition |
|---|---|
| fuel | Any liquid or gaseous energy source used to power vehicles for the performance of work in the transport industry. This includes petroleum and diesel products. |
| increased cost of fuel | The difference between the cost per litre for the type of fuel used to perform work in the road transport industry at any given time and the cost as it was on or before 6 March 2026. |
| primary party | A person or business who is a party to the first contract or arrangement in a road transport contractual chain. |
| secondary party | A person or business who is a party to a subsequent contract or arrangement in a road transport contractual chain. The work performed for a secondary party is done by a regulated road transport contractor, a road transport employee-like worker or an employee. |
| rate | The contracted, standard, ongoing or usual rate or amount paid by one person to another for the performance of work in the road transport industry on or before 6 March 2026. This includes an hourly rate, a running rate, a total amount, any other form of payment or combination of the previous rates. |
What you can do now
If you’re in the road transport industry, we encourage you to:
- read the final RTCCO: Road Transport Contractual Chain Order — Fuel Cost Recovery 2026
- talk to other affected businesses or workers in your road transport contractual chain to ensure that everyone understands and follows the rules set by this order
- access other key documents and information from the Commission's major case page (including its decision): TWU & ARTIO application for a road transport contractual chain order – fuel cost major case (MS2026/1)
- contact your union, industry association or employer association for additional support – for contact information, see our Legal help page
- make sure you’re subscribed to receive updates from the Commission (including on its review of the RTCCO): Subscribe to email updates.
How we can help
A reminder that we’re the Fair Work Ombudsman, not the Fair Work Commission. Learn more about what we each do: Difference between the Fair Work Ombudsman and the Fair Work Commission.
Our role is to give advice and assistance on workplace rights and entitlements. We can provide advice on, monitor compliance with and enforce RTCCOs once they’re made by the Commission.
Keep up to date
To stay up to date and be notified with updates that are relevant to you, subscribe to our email updates. It only takes a few moments to sign up and will help you stay in the loop with changes to workplace laws.
You can also follow us on social media for other announcements and reminders.
More information
Access a copy of the RTCCO: Road Transport Contractual Chain Order — Fuel Cost Recovery 2026.
Read more information about this major case from the Commission: TWU & ARTIO application for a road transport contractual chain order – fuel cost major case (MS2026/1).
Consider contacting your union, industry association or employer association for additional support. For contact information, see our Legal help page.
For more guidance about RTCCOs and the Commission, go to Regulated worker and road transport contractual chain standards.
There’s also previous information on the recent changes to the Fair Work Act to help fast-track applications for RTCCOs. Go to: Fairer Fuel: Reforms to road transport orders.
