In a significant further intervention in the economy the Fair Work Commission has determined to re-enliven the Road Transport Contractual Chain Order – Fuel Cost Recovery – 2026 (RTCCO) so the order will once again impose obligations on parties in road transport contractual chains.
We expect that RTCCO 2.0 will come into effect shortly after completion of a short consultation period.
A quick refresher …
As a result of an application made by the TWU and ARTIO, on 20 April 2026 an Expert Panel of the Fair Work Commission (Expert Panel) made the RTCCO, which then took effect on 21 April 2026. Following urgent amendments to the Fair Work Act 2009 (Cth) (Act), that application was declared to be an ‘emergency application’ by the Federal government, allowing the Expert Panel to make the RTCCO as a ‘time-sensitive’ order and bypassing the normal extended timeline in which similar orders can usually come into effect. [See our previous articles - The Fair Work Commission’s extraordinary fuel cost recovery order – implications for business and The review of the FWC’s Fuel Cost Recovery Order – confusion remains and an opportunity lost].
Clause 5.4 of the RTCCO provided that it would be subject to a review after the first month of its operation and then every three months thereafter. Following an engagement conference with interested parties on 21 May 2026 and a hearing on 25 May 2026, the Expert Panel issued a statement and a proposed draft variation to the RTCCO.
That process was interrupted, however, by changes to the weekly average national terminal gate price for diesel. In the week ending 5 June 2026, that price dropped below the threshold of $2.00 per litre contained in clause 5.3 of the RTCCO for the first time. The consequence of this change to the diesel price was that, under clause 5.3 of the RTCCO, the operative obligations set out in clause 4 of the RTCCO ceased to apply to primary and secondary parties (before any variation could take effect). While all of the obligations in the RTCCO ceased to operate at that time, the Exprt Panel determined that the RTCCO itself nonetheless remained in place [No ongoing obligations remain under the FWC’s Fuel Cost Recovery Order].
Since the middle of July 2026, the diesel terminal gate price has again risen above $2.00 per litre. In late August 2026, the Expert Panel invited submissions from interested parties as to what action (if any) it should take in relation to the RTCCO – whether the obligations in the RTCCO should be re-enlivened or whether the RTCCO should be revoked. Not surprisingly, a large number of submissions were made to the Expert Panel in relation to what steps it should take.
What to do with the RTCCO?
In its decision issued on 16 October 2026 [Decision [2026] FWCFB 278] the Expert Panel noted that there was general agreement that the fuel supply chain disruption resulting from the significant reduction in shipping through the Strait of Hormuz and the conflict in the Middle East continues. In those circumstances the Expert Panel noted that there were essentially three options available to it as to how it could deal with the RTCCO:
- take no steps at this time, leave the operative obligations in clause 4 of the RTCCO as inoperative and await further developments;
- revoke the RTCCO - a number of parties advocated for this position given that the operative obligations have not been in force for some time, because the ‘emergency’ which prompted the time-sensitive order had passed, and/or because there was insufficient evidence to justify re-enlivening the operative obligations; or
- re-enliven the operative obligations in clause 4 of the RTCCO – a number of parties supported this position including the TWU and ARTIO given the increase in fuel prices since July 2026 and current prices.
The Expert Panel took the view that there was no dispute that it had the power to revoke or vary the RTCCO under the Act, if satisfied that that action was consistent with the minimum standards objective and the road transport objectives in the Act.
The case for revoking the RTCCO
The Expert Panel noted that the current circumstances differ to some degree from those that existed in April 2026 (when the RTCCO was first made) and the manner in which the Expert Panel then expected events might “play out”. It also acknowledged that road transport businesses and other participants in road transport supply chains have had an opportunity to adjust their business arrangements in light of the ongoing conflict and fuel price uncertainty.
Nonetheless, the Expert Panel considered that the same type of pressures that existed in April 2026, and which led to the making of the RTCCO, have recurred and continue to affect participants:
- although increases in fuel prices which have occurred between July and October 2026 are less precipitous than what occurred in March 2026, there has been a substantial and sustained increase in prices since July 2026;
- while there was some material before the Expert Panel which might suggest that there are other factors which are contributing to fuel prices rising again, there was nothing before the Expert Panel to suggest that the reduction in shipping through the Strait of Hormuz and conflict in the Middle East had not remained the major contributing factor; and
- fuel prices remain volatile.
The submissions supporting the case for revocation of the RTCCO argued that the RTCCO imposed a disproportionate administrative burden, that there was a lack of clarity as to the application and nature of the obligations imposed by the RTCCO, and that compliance with the RTCCO obligations was frequently difficult or impracticable.
In particular, interested parties submitted that the obligation of a primary or secondary party to ensure that another party recovers the increased cost of fuel was fraught for various reasons, including:
- fuel consumption and fuel costs are affected by a wide range of factors;
- primary and secondary parties do not necessarily have visibility of, or control over, matters influencing fuel consumption and fuel costs;
- contractor drivers or road transport employee-like workers will not necessarily provide evidence of their actual costs or might not want to share information in relation to their costs;
- the incidence of multi-loading and other practices complicates assessment of fuel costs; and
- the frequency with which customers might engage large numbers of road transport businesses.
It was also submitted that many businesses do not have the required knowledge to make the assessment as to what adjustment in rates is necessary to ensure increased fuel costs are covered and may be placed in an unfair or unreasonable position of being forced to pay an amount which clearly exceeds a party’s expected or estimated increase in fuel costs.
Unfortunately, the Expert Panel noted that there was very little evidence which had been put before it in support of those submissions, with interested parties substantially relying on assertions made in submissions or matters said to arise from the application of ‘logic’ or ‘common sense’.
As a result, the Expert Panel adopted the position that many businesses had already taken steps to comply with the obligations imposed by the RTCCO, so that if there had been such difficulties with complying or understanding the obligations imposed by the RTCCO of the magnitude asserted, the Expert Panel would have expected evidence of greater volume and specificity than was put forward and/or for more disputes to have been lodged with it under the terms of the RTCCO (noting there had only been 4 such disputes to date).
Ultimately the Expert Panel determined that the RTCCO should not be revoked.
The case for re-enlivening the RTCCO
Some interested parties submitted that the Expert Panel must be satisfied that a clear evidentiary case had been made for re-enlivening the obligations in the RTCCO. The Expert Panel rejected the notion of any such evidentiary threshold. Instead, it considered that it need only be satisfied that re-enlivening the RTCCO was consistent with the minimum standards and the road transport objective under the Act, and that it was otherwise appropriate to exercise its discretion to vary the RTCCO.
Having considered all of the submissions and evidence, the Expert Panel determined to vary the RTCCO to re-enliven the operative obligations in clause 4. This decision was made, in part, based on the Expert Panel’s view that owner-drivers, road transport employee-like workers and operators of small fleets are in weak bargaining positions and continue to experience difficulties in recovering increased fuel costs from their contractual counterparties.
In more detail, the Expert Panel determined to re-enliven the RTCCO for reasons including:
- it is necessary for the sustainability and viability of the road transport industry that effective standards be put in place to ensure that participants with weak bargaining power are able to achieve recovery of the increased cost of fuel;
- the operative obligations in the RTCCO will ensure the maintenance of sustainable competition amongst road transport industry participants, by imposing cost recovery obligations which apply to them all equally and which should not have significant impacts on business viability, innovation and productivity;
- the RTCCO obligations give effect to the need to avoid adverse impacts on the sustainability, performance and competitiveness of supply chains and the national economy;
- without those obligations there is a risk that the viability and continued operation of some truck owner-drivers, road transport employee-like workers and small fleet operators will be threatened; and
- circumstances persist in which there is still a need for minimum standards in road transport contractual chains to, so far as possible, ensure that participants are able to recover the increases in the cost of fuel.
The Expert Panel did acknowledge that the RTCCO imposed some administrative and compliance costs on industry participants, and as a result it has proposed to make variations to the RTCCO to address some of those potential costs.
How is the RTCCO to be varied?
The Expert Panel has released a draft revised RTCCO for public consultation [Road Transport Contractual Chain Order – Fuel Cost Recovery – 2026 ].
Many of the proposed variations reflect those changes which were previously proposed by the Expert Panel [see our previous article - Draft order released: some clarity, more confusion], but which were not ultimately determined (or implemented) as a result of the operative provisions ceasing to apply in June 2026.
The Expert Panel has also proposed further changes to the RTCCO, and declined to make others, including:
- monthly rate adjustments: given the passage of time and developments in the global position, it is proposed that the RTCCO require monthly adjustments rather than fortnightly (or twice per calendar month) adjustments;
- agreed levy or amount: an additional subclause should be inserted into clause 4.6 to permit the rate adjustment obligation to be satisfied by payment of an agreed levy or amount, so long as the person incurring the increased cost of fuel has been given a copy of the RTCCO and the other person has taken reasonable steps to ensure the levy or amount is sufficient to recover that increased cost of fuel; and
- no change to ‘primary party’: the Expert Panel rejected the proposal by a number of interested parties that the definition of a ‘primary party’ should be amended to exclude the ‘first primary party’ or client in chain, and extend only to the ‘second primary party’ that organises the performance of transport work.
The overall trigger for those operative provisions to cease to apply under the RTCCO remains, but will also be varied to only be triggered if the weekly average national terminal gate price for diesel falls below $2.00 per litre for four consecutive weeks.
Next steps
Interested parties have been given until 4pm on 23 October 2026 to make any submissions on the terms of the draft RTCCO.
We expect that the Expert Panel is likely to issue a RTCCO 2.0 to commence shortly thereafter.
If you require assistance with meeting the obligations under RTCCO 2.0, please reach out to one of your key contacts.
