The Fair Work Commission has varied the Road Transport Contractual Chain Order – Fuel Cost Recovery – 2026 (the Order). The fuel cost recovery obligations, which ceased in June, will restart on Monday 23 November 2026.
The Order requires businesses in a road transport contractual chain, from the client down, to adjust rates so that transport operators recover fuel cost increases since 6 March 2026.
For civil contractors, this typically covers tipper, haulage, plant float and owner-driver work.
KEY CHANGES
1. Monthly adjustments: Rates must be adjusted at least each calendar month, rather than fortnightly.
2. Newer contracts: Contracts entered into after 6 March 2026 are covered.
3. Fuel levy: An agreed fuel levy or surcharge satisfies the Order if it is adjusted monthly, covers the increased cost, and the business paying it gives the other party a copy of the Order.
4. Rise and fall clauses: These satisfy the Order only if they account for fuel and are applied at least monthly. Quarterly or annual adjustments will not be enough on their own.
5. Small business exception: The exemption from the reasonable steps obligation (clause 4.2) applies only to small businesses that do not engage contractors or employ staff to perform road transport work.
6. Cessation: The obligations stop only once diesel stays below $2.00 per litre for four consecutive weeks.
7. Clients remain covered: Clients at the top of the chain continue to have obligations under the Order.
The Commission will next review the Order in February 2027.
WHAT TO DO BEFORE 23 NOVEMBER
– Identify contracts involving trucks or transport subcontractors.
– Set up a monthly rate review process.
– Check whether your rise and fall clauses meet the new requirements.
– Notify clients early of fuel cost increases you will seek to recover.
– Keep records and seek independent legal advice.
CCF ADVOCACY
CCF’s submission of 23 October called for the Order to be clarified. The Order was designed for the transport industry without input from our sector, and many clients, including councils and other government bodies, have been unclear whether it applies to them. Some have rejected fuel cost claims, leaving head contractors to carry the cost.
The final Order reflects several of our points, including 14 days’ notice before the restart, clients remaining primary parties and tighter rules on rise and fall clauses. It does not confirm that government agencies are primary parties, or clarify how the Order applies to lump sum and combined construction contracts. We will continue to pursue these issues, including at the February review.
