On 20 April 2026, a Full Bench of the Fair Work Commission issued an urgent decision resulting in the Road Transport Contractual Chain Order. The order introduces mandatory fuel cost recovery obligations across the road transport industry, taking effect from 21 April 2026.

The order has been made under recent “fairer fuel” legislative amendments designed to address rapid fuel price increases linked to geopolitical disruption (including the Iran conflict) and their impact on minimum industrial outcomes in the road transport sector.

The Commission accepted that there was a pricing mechanism failure within contractual chains that was preventing the effective recovery of fuel cost increases by workers and contractors at the lower end of the supply chain. The order is intended to ensure those costs are passed through the chain so that end users ultimately bear the economic burden, spreading it more broadly across the economy.

What is the order?

The instrument is a legally binding Road Transport Contractual Chain Order. It operates across entire contractual chains in the road transport industry and overrides any inconsistent contractual term.

It is not limited to employment relationships and applies regardless of whether parties are directly or indirectly engaged.

The order will remain in force while the weekly average national diesel price (as reported by the Australian Institute of Petroleum) remains above $2.00 per litre. It will be reviewed after one month and then every three months thereafter.

Who is covered by the Road Transport Contractual Chain Order?

The order applies broadly to participants in road transport contractual chains, including:

• Principals and major clients at the top of the supply chain
• Transport operators and subcontractors
• Regulated road transport contractors and employee-like workers
• Digital labour platforms facilitating road transport services

A limited exclusion applies to small business employers that are not themselves road transport businesses.

The cash-in-transit sector is excluded on the basis that it operates within a single contractual chain with existing cost recovery mechanisms.

The core obligation – fuel cost recovery

The central requirement is that contractual rates must be adjusted to ensure recovery of fuel cost increases.

Importantly, the order does not prescribe a fixed formula. Businesses may use any mechanism that achieves effective recovery, including:

• Rate increases
• Fuel levies
• Reimbursement or adjustment clauses

The key requirement is outcomes-based: fuel cost recovery must be real, timely, and effective in practice.

Timing and frequency requirements

Fuel cost adjustments must be made regularly and contemporaneously with market changes.

In practical terms, adjustments are expected:

• At least fortnightly (or twice per calendar month), and
• in response to current fuel price movements rather than end-of-contract reconciliations.

This effectively removes reliance on delayed “true-up” mechanisms.

Through-chain accountability

A significant feature of the order is through-chain responsibility.

Parties higher in the supply chain are required to take reasonable steps to ensure that fuel cost recovery is passed down the chain to those bearing the cost. Passive reliance on subcontracting arrangements is not sufficient.

The Commission emphasised that the hierarchical nature of road transport contracting means those at the top of the chain often control pricing outcomes, and therefore carry responsibility to ensure compliance flows downstream.

However, this upstream responsibility does not apply to small businesses that are not themselves road transport businesses.

Interaction with contracts

The order has immediate implications for existing commercial arrangements:

• Fixed-price and long-term contracts are not a defence against compliance
• Existing fuel adjustment clauses may require urgent review or amendment
• Contracts may need to be renegotiated or varied to introduce compliant mechanisms

The order does not regulate wages, rostering, work health and safety, or engagement models. Its scope is limited specifically to fuel cost recovery and pricing mechanisms.

Duration and review framework

The order remains in force while diesel prices exceed the $2.00 per litre threshold (based on Australian Institute of Petroleum weekly reporting).

The Fair Work Commission will review the operation of the order after one month, and then every three months thereafter. Earlier proposals for weekly review were rejected on the basis that they would impose an undue administrative burden.

Compliance timeline – immediate action required

Businesses covered by the order are required to implement their first compliant rate adjustment by 5 May 2026.

To prepare for compliance, organisations should take the following steps:

1. Map exposure across the supply chain

• Identify where your business sits within road transport contractual chains
• Determine where fuel cost risk currently sits (upstream or downstream)

2. Review contracts and pricing structures

• Identify fixed-price or long-term contracts without fuel adjustment mechanisms
• Flag arrangements that may now be non-compliant

3. Develop compliant recovery mechanisms

• Design or update fuel levy or pricing adjustment clauses
• Ensure mechanisms operate regularly and reflect real-time fuel movements

4. Engage counterparties early

• Proactive engagement will reduce disputes and operational disruption
• Expect renegotiation pressure across the chain

5. Seek advice before responding to claims or renegotiations

• Interaction between the order, existing contracts, and the Fair Work Act is complex
• Early legal and commercial review is strongly recommended

If you believe you are affected by this order, or may be affected, it is recommended that you reach out to Business Chamber Queensland’s Workplace Relations Team now to discuss your obligations and where we may be able to assist.