On Monday 19 May 2026, the Fair Work Ombudsman (the Ombudsman) updated their published guidance on the operation of the road transport contractual chain order issued by the Fair Work Commission on 20 April 2026 (the RTCCO).
Of note, the Ombudsman’s webpage was updated to include:
- Reasonable Steps: The webpage now provides more detail about how businesses can discharge their ‘reasonable steps’ obligation under clause 4.2 of the RTCCO. The Ombudsman notes that the following measures could constitute ‘reasonable steps’:
- 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; and
- setting an expectation that secondary parties will comply with the RTCCO and agreeing on a process for adjusting rates.
However, the assessment of ‘reasonable steps’ remains heavily dependent on the facts. The Ombudsman identified that factors such as the size and nature and resources of the primary and the nature of the contractual relationship will be taken into account when considering what a primary party must do to comply with their ‘reasonable steps’ obligation.
- Example chains: The Ombudsman has drafted two examples of contractual chains to show the parties positions in the chain, confirm they are captured by the Order and outline each parties obligations.
- Livestock Industry: The Ombudsman’s guidance confirms that the transportation of livestock (including cattle, sheep, goats, pigs, horses, poultry, emus, ostrich, alpaca, deer, camels and buffalo) is excluded from the definition of ‘road transport and distribution industry’ within the meaning of the Road Transport and Distribution Award 2020.
- Rate Adjustment: Whilst the Ombudsman indicated that existing ‘Rise and Fall’ and like adjustment mechanisms under contract ‘may’ satisfy a primary party’s obligation under clause 4.1 of the RTCCO, it did not provide further guidance as to whether party’s are able to rely on existing mechanisms in full or if these mechanisms must be adjusted to occur fortnightly.
Unfortunately, none of these updates provide any greater clarity for businesses as to whether:
- existing ‘Rise and Fall’ and like adjustment mechanisms will satisfy the rate adjustment obligations in the RTCCO - where they have adjustment periods other than fortnightly or twice monthly;
- contracts for the provision of services or goods (and not for the provision of services under a road transport contract) are captured by the RTCCO; and
- a single contract for the provision of services can constitute a road transport contractual chain.
While the Ombudsman’s high-level guidance is not legally binding, it does provide an indication as to the regulator’s perspective regarding the operation of the RTCCO.
Coming up
The Expert Panel’s review hearing is scheduled for 25 May 2026. Interested parties have until 4:00pm, 21 May to file submissions. These submissions may provide even more insight into the implementation and interpretation issues organisations are experiencing in complying with the RTCCO. The filing of submissions is not a requirement for parties wishing to participate in the hearing.
We are still eagerly awaiting further guidance from the Expert Panel of the Fair Work Commission as to the operation of the RTCCO and a response to some of the more complex questions from the business community. The Fair Work Commission has not indicated whether its guidance will be issued ahead of the review hearing or after.
