Page 10 Page 11 FOCUS HR | IR July Update 2026 FOCUS HR | IR July Update 2026 When – 1 April 2026 The Fair Work Amendment (Fairer Fuel) Act 2026 introduced significant changes to the Fair Work Act aimed at fast-tracking road transport contractual chain orders (RTCCOs) and responding more quickly to sudden disruptions affecting the road transport industry, particularly sharp increases in fuel costs. The reforms represent one of the most significant developments in the regulation of road transport contracting arrangements since the introduction of the Closing Loopholes legislation. RTCCOs are legally enforceable orders made by the FWC that can establish minimum standards across road transport contractual chains. These orders can apply to regulated road transport contractors, employee-like workers, road transport businesses and other parties involved within transport supply chains. RTCCOs may contain provisions dealing with matters including fuel levies, cost recovery, rate reviews, payment times and termination arrangements. The Fairer Fuel reforms were introduced in response to growing concerns regarding the impact of significant fuel price increases on transport operators and owner- drivers. The amendments were designed to enable the FWC to intervene more quickly where sudden events or circumstances create substantial negative impacts across the road transport industry. A key feature of the reforms is the introduction of an “emergency application” process. The Minister for Employment and Workplace Relations can now determine that an application to make, vary or revoke an RTCCO is an emergency application where an event or circumstance is having, or is likely to have, a significant national negative impact on the road transport industry and it is in the public interest to intervene. Once classified as an emergency application, the FWC is able to significantly shorten consultation and commencement timeframes that would otherwise apply. The reforms were quickly utilised following significant fuel price increases during early 2026. In April 2026, the FWC issued the first ever RTCCO – Fuel Cost Recovery 2026 after receiving a joint application from the Transport Workers’ Union and the Australian Road Transport Industrial Organisation. The order was designed to ensure that increased fuel costs could be passed through transport contractual chains rather than being absorbed solely by transport operators and drivers. The Fuel Cost Recovery Order requires certain parties within road transport contractual chains to adjust When – 1 June 2026 The Fair Work Commission announced changes to sleepovers in the Social, Community, Home Care and Disability Services Award (SCHADS Award) [MA000100]. Under the SCHADS Award, a sleepover is when an employee is required to stay overnight at the same location as the client. The Commission’s decision changed how rostering and pay works for shifts that include a sleepover, in particular: • ordinary hours of work • rest breaks between rostered work • shift allowances and penalty rates. Ordinary hours of work Employees and employers can now agree to extend ordinary hours of work to up to 12 hours per shift, if part of the shift is immediately before and after a sleepover period, with a maximum of 8 ordinary hours in either period of work. On those shifts, overtime is payable for any extra time worked over 12 hours. Employees and employers can already agree to extend ordinary hours to 10 hours per shift under the SCHADS Award. Otherwise, shifts are 8 hours long. Full-time employees The changes clarify that overtime is calculated either per day or per shift, including where a shift spans across two calendar days. Overtime is now payable to full-time employees for all work performed in addition to their rostered ordinary hours on any day or shift. Part-time or casual employees Where part of a shift is performed immediately before and immediately after a sleepover, overtime rates for part-time and casual employees will apply after: • 12 hours if there’s agreement between the employee and employer that the employee will work a 12 hour shift with a sleepover period • 10 hours if there’s no agreement. Rest breaks between rostered work The SCHADS Award has rules about employees needing a break of not less than 10 hours between the end of one shift and the start of another. Practical Implications for Employers Businesses operating within or connected to the road transport industry should consider: • reviewing whether they form part of a road transport contractual chain • assessing existing fuel recovery and rate adjustment mechanisms in contracts • monitoring active RTCCO applications before the Fair Work Commission • assessing compliance obligations arising from Fuel Cost Recovery Orders and • reviewing broader supply chain arrangements that may be captured by future RTCCOs. Businesses should also be aware that RTCCOs are legally enforceable and may impose obligations regardless of whether existing contracts currently contain fuel adjustment or cost recovery provisions. Practical Implications for Employers Employers operating under the SCHADS Award should consider: • reviewing payroll systems and sleepover payment practices; • reviewing rostering arrangements involving sleepovers; • ensuring sleepovers and surrounding work periods are correctly classified. Observation The Fairer Fuel reforms represent a major expansion of industrial regulation beyond traditional employment relationships and into broader contractual supply chains. The reforms demonstrate an increasing willingness by Parliament and the FWC to intervene in commercial contracting arrangements where economic pressures are considered capable of undermining minimum standards within critical industries. The first Fuel Cost Recovery Order also signals how rapidly the new framework can now operate. What would previously have required lengthy consultation and implementation periods can now be introduced on an expedited basis where significant industry-wide events occur. The Award is changing to provide that a sleepover period isn’t a break between rostered work. Work performed immediately before and after a sleepover period will be treated as part of the same shift. Shift allowances and penalty rates The way shift allowances are calculated for shifts on both sides of a sleepover have also changed. Where an employee is rostered to work immediately before and after a sleepover period, the portion of work before and after the sleepover period will be considered separately for the purposes of determining the shift allowances. This means the shift may have different shift allowances that apply for the two periods of work. FAIRER FUEL REFORMS & ROAD TRANSPORT CONTRACTUAL CHAIN ORDERS transport rates in order to account for increased fuel costs. Importantly, the order extends beyond transport businesses themselves and may affect parties throughout broader contractual supply chains that engage transport services. The reforms represent a significant shift in how industrial regulation may operate within the road transport sector. Rather than focusing solely on traditional employment relationships, the framework regulates broader commercial arrangements and contractual supply chains where transport work is ultimately performed. SCHADS AWARD – CHANGES TO SLEEPOVERS
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