Guidance on Road Transport Contractual Chain Order – Fuel Cost Recovery – 2026 and Tip Truck Owner Driver Policy

New Road Transport Contractual Chain Order

On 20 April 2026, the Commonwealth Fair Work Commission (FWC) made the Road Transport Contractual Chain Order – Fuel Cost Recovery – 2026 (Order). The Order commenced on 21 April 2026.

The Order and FWC’s decision are linked below:

• Decision [2026] FWCFB 95(opens in a new window)
• Road Transport Contractual Chain Order – Fuel Cost Recovery – 2026(opens in a new window)
• Major case webpage: TWU & ARTIO application for a road transport contractual chain order – fuel cost recovery (MS2026/1).

The Order covers parties in road transport contractual chains that involve the performance of work in the road transport industry. The terms of the Order provide that:

• From 21 April 2026, primary parties and secondary parties in road transport contractual chains must adjust their rates fortnightly or twice each calendar month to ensure recovery of the increased cost of fuel.
• Existing rise-and-fall rates already in contracts, industrial instruments or other arrangements, including those commenced before 21 April 2026, may satisfy the rate adjustment obligations.
• Disputes relating to the order that are unable to be resolved by the parties, can be referred to the FWC.

Tip Truck Owner Driver Policy

The Tip Truck Owner Driver Policy (the Policy), which commenced operation in August 2018, delivers on the Victorian Government’s commitment to introduce mandatory minimum rates of pay for tip truck owner drivers working on Victorian Government funded construction projects (building, infrastructure, civil engineering or other capital works projects).

The Policy must be applied to all publicly funded Victorian construction contracts awarded on or after 27 August 2018. The Policy applies to tip truck owner drivers that are engaged:

• directly by the principal contractor; or
• indirectly through a subcontractor or secondary subcontractor or freight broker.

Government agencies must ensure that their public construction contracts require the principal contractor to comply with the Policy and ensure that any tip truck owner driver engaged in connection with excavation work, directly or indirectly, through one or more subcontractors is paid according to the Policy.

Principal contractors have a contractual obligation to ensure through the sub-contracting supply chain that tip truck owner drivers are paid at least the applicable minimum rates of pay specified in the Policy, as updated from time to time.

Interaction between the Order and Tip Truck Owner Driver Policy

The Order does not impact obligations currently imposed under the Policy. Principal contractors continue to have a contractual obligation to ensure through the sub-contracting supply chain that tip truck owner drivers are paid at least the applicable minimum rates of pay specified in the Policy.

However, under the Order, some parties may now have additional obligations. Primary parties and secondary parties in road transport contractual chains must now adjust their rates fortnightly or twice each calendar month to ensure recovery of the increased cost of fuel.

Practically, this means that the current rates mandated for payment under the Policy:

• continue to apply as a minimum; and
• should be used as the base rate of pay that should be adjusted for the increased cost of fuel.

Suggested Fuel Levy Adjustment

Primary and secondary parties should consult with parties they engage with in the road transport contractual chain on the application of the Order to fuel costs for tip truck drivers.

One possible approach is a fuel levy adjustment for tip trucks engaged on Victorian Government Construction projects and is outlined below. This draws on the fuel use assumptions used in the calculation of the rates applied under the Policy.

A fixed hourly fuel levy adjustment could be applied to all hourly hire work. Adjusted fortnightly based on Wednesday terminal gate pricing, calculated Friday and applied for the 14 days starting the following Monday.

An hourly fuel levy adjustment is calculated by multiplying the hourly fuel use for each vehicle type by the difference between the 6 March 2026 Melbourne Terminal Gate Price for Diesel ($1.843 per litre) and the terminal gate price on the Wednesday used for the calculation.

Example: If fuel on the Wednesday used for calculation is at $2.089 per litre, there would be a $0.246 difference ($2.089 -$1.843 =$0.246).

For a Tandem truck which is assumed to use 8 litres of fuel per hour this would result in a $1.97/hr fuel levy adjustment (8.0L × 0.246 = $1.97/hr).

For contract or per load work, the fuel levy adjustment is suggested to be applied as a percentage of the base rate.

Example fuel levy adjustment calculations for each truck type are outlined in the table below.

(Note: Use scroll bar at bottom of table to view all columns)

Financial impacts

Contractors should contact the government delivery agency responsible for their project if they have further queries regarding the application of the Order in connection with their project.

Plant hirers (and other parties in the construction supply chain) should contact the party that has engaged them to deliver tip truck or earthmoving services regarding costs associated with the Order.

Further Information

Parties across road transport contractual chains should seek their own legal advice regarding the application of the Order.

Government Agencies: further information regarding contractual application of the Tip Truck Policy and or the Order please contact Construction Policy in the Department of Treasury and Finance on construction.procurement@dtf.vic.gov.au.

Tip truck owner drivers and contractors: further information and assistance about the application of the Tip Truck Policy please contact Industrial Relations Victoria in the Department of Treasury and Finance on irv.info@dtf.vic.gov.au.