The Fair Work Commission just told supply chains how to handle fuel costs - and that's a bigger deal than you may think

On 20 April 2026, the Fair Work Commission (FWC) made the first-ever Road Transport Contractual Chain Order (RTCCO) under its new emergency powers. If you are not in the business of moving goods by road, you might be tempted to scroll past. We would encourage you not to.

The RTCCO is not just a fuel cost mechanism for truckies. It represents a fundamental shift in how far the long arm of federal industrial regulation now reaches into commercial supply chain arrangements. For any employer who engages contractors, subcontractors, or sits anywhere in a chain of service delivery, this is a canary worth watching.

Earlier this year, the Federal Government passed the Fair Work Amendment (Fairer Fuel) Bill 2026 (the Fairer Fuel Bill), handing the FWC new emergency powers to intervene directly in how fuel costs are managed across road transport supply chains.

The rationale was straightforward: volatile fuel prices were impacting owner-drivers and small operators at the bottom of contractual chains, while those at the top - the principals and head contractors - were arguably commercially insulated.

The FWC wasted no time. In April 2026, it exercised those powers to make the RTCCO, imposing binding obligations on participants across an entire road transport contractual chain to pass through fuel cost increases. That includes not only the direct engager of a transport contractor, but potentially every entity up the chain to the principal - the party who first contracted for the transport work to be done.

The order mandates that, with respect to all work in a road transport contractual chain, each fortnight (or twice per calendar month):

• Primary parties must adjust the rate they pay to the other primary party, to ensure the other primary party recovers the increased cost of fuel. The primary parties must then take reasonable steps to ensure that secondary parties in the same contractual chain comply with their obligations; and
• Secondary parties must adjust the rates they pay to the other secondary party, regulated road transport contractor or road transport like work to ensure that they cover the increased cost of fuel.

The order applies only where contracts, in substance, procure the supply of road transport work but it applies to both existing and new contracts.

The order will continue indefinitely until cancelled by the FWC. However, the obligations under the order will cease if the weekly average national terminal gate price for diesel (as measured in the Australian Institute of Petroleum’s weekly diesel price report) falls below $2.00 per litre.

The order is set to be reviewed by the FWC after 21 May 2026, followed by every 3 months thereafter.

A failure to comply with the RTCCO is a breach of the Fair Work Act which may incur penalties.

Here is the real story. For the first time at a federal level in Australian industrial relations history, a tribunal has made a binding order that dictates commercial terms across supply chains.

That is new. That is significant. And it opens a door that, once opened, might be unlikely to close.

The architecture of Chapter 3B of the Fair Work Act, under which the RTCCO was made, was introduced through the Closing Loopholes reforms as part of the broader gig economy and road transport framework. But the Fairer Fuel Bill turbocharged it, giving the FWC emergency-style powers to act quickly where fuel cost volatility demanded urgent intervention. The usual 12-month consultation period for making an RTCCO could already be compressed to six months under the original Closing Loopholes provisions where circumstances urgently required it. But the Fairer Fuel Bill went much further - it introduced an "emergency application" pathway that dispensed with prescribed timeframes altogether, allowing the FWC to bring an order into effect in whatever time it considers reasonable.

The timeline here tells the story: the application was filed on 2 April 2026, confirmed as an emergency application on 10 April, notice of intent published on 14 April, and the order made on 20 April with effect from 21 April. Eighteen days from application to binding order. That is not a compressed consultation process - it is a fundamentally different kind of power.

The implications may extend well beyond road transport.

The legislative model - a tribunal imposing terms on commercial contracts between businesses across a supply chain - is arguably a template. If it works for fuel costs in road transport, the question is whether it will be extended to other industries and, if so, under what circumstances.

For businesses directly covered by the order, compliance obligations are now live. Contracts need to accommodate the fuel cost pass-through mechanism, payment terms must align with the order's requirements, and the dispute resolution procedure embedded in the RTCCO is binding.

For everyone else, the practical takeaway is threefold:

First, if your business sits in any supply chain that involves road transport, and most do, check whether the order touches you. The definition of a "road transport contractual chain" is broad, and coverage extends to anyone for whom the regulated transport work is ultimately performed.

Second, understand that the FWC now has jurisdiction over commercial relationships in a way that was previously unthinkable. This is not a minimum wage case or an unfair dismissal claim. Essentially it is a tribunal telling businesses what their contracts must provide for.

Third, watch this space. The Competition and Consumer Act authorisation provisions built into the legislation, which protect conduct done in accordance with an RTCCO from competition law challenge, signal that Parliament fully expects these orders to reshape market behaviour.

Australian industrial relations has always been, at its core, about the employment relationship. The RTCCO marks the moment that boundary was crossed at a federal level in a meaningful, enforceable way in relation to commercial terms across supply chains, using emergency powers that compressed the usual safeguards.

Whether you see that as a necessary protection for vulnerable participants in exploitative supply chains, or an overreach of tribunal power into commercial freedom, depends on your perspective. But one thing is clear: the rules of engagement have changed. And if your business relies on supply chains of any kind, the FWC's new powers deserve your attention.

This article was co-authored by Georgia Chahoud, an Associate in our Sydney office.

The views expressed in this article are general in nature only and do not constitute legal advice. Please contact us if you require specific advice tailored to the needs of your organisation.

For more insights from the Kingston Reid team on the workplace law issues facing organisations in 2026, head to our Publications page to access our 2026 Workplace Insights report.

Photo by Marek Studzinski on Unsplash.