Businesses grappling with fortnightly fuel adjustments face overlapping legal obligations as the Fair Work Commission reviews the order
The Fair Work Commission's review of the Road Transport Contractual Chain Order (RTCCO) – a regulatory instrument requiring businesses across the freight supply chain to adjust road transport payments in line with fuel price movements – has exposed deep tensions between worker protections and business compliance capacity, a senior employment lawyer says.
Anthony Longland, partner, employee relations and safety at Mallesons, told HRD Australia that while the intent of the order is clear, its practical operation is creating significant difficulty for businesses at every level of the contractual chain.
"There is a strong desire to achieve compliance, so conservative approaches are being taken," Longland said. "Whether the alternative mechanism excuses compliance is one challenging issue, but so is upstream parties determining the road transport cost of a downstream player, and then what portion of that cost relates to fuel."
What the order requires and why it is contentious
The RTCCO, made under the Fair Work Act using Minimum Standards Order provisions inserted into the Act in 2022, requires parties in the road freight contractual chain to pass through fuel cost adjustments on a fortnightly or twice-monthly basis when the diesel price exceeds $2 per litre. The order came into force with very limited notice, Longland said, catching many businesses unprepared.
The Transport Workers' Union (TWU) has argued at recent hearings that compliance is achievable and has cited examples where it is occurring. The Australian Industry Group (AIG), however, has called for the order to be revoked, pointing to widespread confusion among its membership. Business groups share the AIG's concern, Longland said, though they are finding it difficult to produce companies willing to give evidence of compliance challenges to the Commission directly.
The TWU is also pushing for a rule requiring the fuel price to remain below $2 per litre for four consecutive weeks before the order's obligations cease – a proposal designed to prevent stop-start compliance cycles as prices fluctuate near the threshold. As HRD Australia has previously reported, fortnightly freight rate resets tied to fuel price movements are already creating administrative pressure for operators managing mixed loads across multiple projects.
Longland said businesses would likely prefer the status quo, or a cessation period aligned to their existing rate adjustment frequency. "If the price goes below $2, the obligations cease – but if businesses judge that it may go up again, they can choose to continue compliance activities voluntarily," he said. "It was the rapidly rising price which justified the order being made in the first place."
The sharpest point of legal disagreement
The most technically complex dispute at the hearing concerns how existing alternative fuel adjustment mechanisms interact with the RTCCO. Longland said there are two opposing interpretations.
"On one view, if there is an alternative mechanism in place, the order should have no work to do. On this view the adjustment obligation is one obligation – and it doesn’t apply where there is an alternative mechanism," he said. "But the TWU’s view seems to be that the alternative mechanism must precisely reflect the orders terms – i.e. provide for fortnightly or twice monthly adjustments."
He said the bench at the hearing appeared to favour the TWU's position, and there was significant discussion about parties who had been adjusting and paying on a monthly basis now being required to move to a fortnightly cycle since the order commenced.
That shift is proving particularly disruptive for HR and payroll teams at large logistics operators – especially those engaged as subcontractors on State Government infrastructure projects, or those delivering mixed loads to multiple sites, where isolating the road transport fuel cost component of a blended freight charge is far from straightforward.
A glimpse of what minimum standards orders can do
Beyond the immediate compliance questions, Longland said the RTCCO has broader significance for Australian employment law – and for HR leaders managing workforce obligations across complex supply chains.
"As a regulatory instrument, it gives glimpse into the tremendous potential of the numerous Minimum Stands Order provisions inserted into the Act in 2022," he said. "The order is a blunt instrument – operating more broadly than any industrial award has ever operated and being enforced under the Fair Work Act’s very strict procedures."
That breadth is a critical point for HR and people operations leaders in industries that rely on contracted or gig-style logistics arrangements. The RTCCO applies not just to direct freight operators but to every party in the contractual chain — including businesses that may not consider themselves transport companies at all.
Understanding how minimum standards orders affect your labour supply chain has become an increasingly urgent priority for in-house HR and legal teams.
The Fair Work Commission has not yet handed down its determination on the contested points. Longland said there was also discussion at the hearing about removing the cessation clause from the order entirely, relying instead on the parties to formally apply for revocation once emergency circumstances no longer exist – an approach that would significantly extend the compliance burden on businesses.
For HR executives and people leaders in transport, logistics, construction, and any sector that engages road freight contractors, the outcome of the review will have direct implications for payroll obligations, contractor management, and compliance frameworks well into the second half of 2026.
