On 20 April 2026, the Fair Work Commission made an extraordinary road transport contractual chain order (RTCCO) to support recovery of fuel cost increases arising from the Middle East conflict. The RTCCO requires fuel cost increases to be passed through road transport contractual chains via periodic rate adjustments or another agreed mechanism.
As outlined in our previous client alert, the RTCCO imposes mandatory obligations that override existing contractual rates and arrangements - an exceptional intervention in freely negotiated commercial contracts.
The order has generated widespread confusion and uncertainty, prompting the Commission to convene an engagement conference last Friday, 1 May 2026 to address early implementation and interpretation issues. Several issues were brought to the attention of Vice President Asbury at the conference, including matters consistently raised by our clients over the past fortnight. These include:
- The operation of Clause 4.6: In particular whether the existence of arrangements under 4.6(a)-(c) overrides a company’s obligations under clauses 4.1 (fortnightly rate adjustment between primary parties), 4.2 (reasonable steps), and 4.4 (fortnightly rate adjustment for secondary parties) in their entirety.
- Price increases: Suppliers rising their prices ‘considerably’, providing no evidence for such an increase and relying on the terms of the RTCCO as the basis for the increase.
- Scope: The scope of the ‘road transport industry’ and the chain in scenarios involving maintenance and services contracts, and where contracts for the supply of goods provide that the supplier is to bear the cost of delivery.
- General Carriers: The interaction between the General Carriers Contract Determination 2017 (NSW), a state industrial instrument, and the RTCCO which is a federal industrial instrument.
- Rate: The inherent impracticality of parties in a contractual chain being able to identify a ‘rate’ in circumstances where the ‘cost of delivery’ is determined having regard to a range of inputs and variables or where there is a ‘fixed priced’.
- Reasonable Steps: What are reasonable steps for a primary party to take to ensure that the cost recovery is ‘passed down’ the contractual chain.
- Information: The inability of parties to request/compel information to substantiate requests for costs increases.
- Over Recovery: The issue of mixed load, mixed fleet operations in determining rates and the prospect of ‘over recovery’.
- Evidentiary Issues: The reluctance of businesses to give evidence in hearings before the Expert Panel in circumstances where that evidence may be commercially sensitive or inadvertently reveal that they are in breach of the RTCCO.
- Specific contractual arrangements: How does the RTCCO treat an umbrella or overarching ‘Master Services Agreement’. These agreements provide for general terms and conditions for the purchase of goods and services by parties, but the purchase of the goods may only occur every three months. Does the existence of an umbrella ‘Master Services Agreement’ transform the relationship to one which is ongoing and requires rate adjustment, or can each purchase under the contract be treated separately.
Vice President Asbury indicated that one of the outcomes of the engagement conference would be that the Commission will publish some form of practical guidance on basic interpretation questions that were raised by the parties.
The Vice President did not indicate when this would be published by the Commission, or which questions it would specifically address.
Interested parties will have to wait until the review hearing to have their interpretation and implementation issues directly addressed by the Expert Panel during the review hearing scheduled for 25 May 2026.
In the meantime, if you have any interpretation or implementation issues with the RTCCO, please reach out to one of your key contacts.
