Last updated: Wednesday, 29 April 2026
WALGA is holding weekly meetings with Fuel Security State Controller, Rob Cossart to provide insights from Local Governments that directly inform statewide fuel security and resilience planning.
WALGA will continue to stay central to ongoing conversations, providing timely updates to the sector as the situation progresses.
All states and territories, including WA, remain at Level 2 on the National Fuel Security Plan, which allows the WA Government to gather timely data and information from the industry.
To support the sector, WALGA has established a fortnightly CEO roundtable to discuss operational impacts and is collecting data on Local Government fuel usage to inform advocacy at State and national levels, including any future fuel prioritisation decisions.
WALGA is also attending national roundtable discussions hosted by the Australian Local Government Association (ALGA).
The State Government is issuing weekly fuel updates, and WALGA will continue to stay central to the conversations and provide timely updates to the sector as the situation progresses.
Read the WA Government Weekly Fuel Update
Local Government Support
In response to queries received by WALGA from our Members, please find below information relevant to Local Government operations.
Fair Work Commission Road Transport Contractual Chain Order
The Fair Work Commission (FWC) has issued a fuel recovery decision which is likely to have operational implications for WA Local Governments. The FWC issued an emergency Road Transport Contractual Chain Order (Order) and Decision in response to escalating fuel price volatility arising from the conflict in the Middle East and disruption to shipping through the Strait of Hormuz. The Order commenced on 21 April 2026.
The FWC has issued a factsheet about this Order. Please also see the Fair Work Ombudsman’s online information ‘Road transport contractual chain’ and FWC’s video on road transport contract chains.
Local Governments are covered by the Order because they participate in road transport contractual chains through service delivery arrangements such as waste management, goods distribution, and passenger transport.
The Order imposes mandatory fuel cost recovery obligations across road transport contractual chains.
The Order’s key requirements include:
- Fuel rate reviews must occur at least fortnightly (or twice per calendar month
- Payments within the contractual chain must be adjusted to ensure that the increased cost of fuel (from on or before 6 March 2026 fuel rates) is recovered by downstream contractors and employee-like workers. Adjustments may be made through rate increases, fuel levies, reimbursement mechanisms, or a combination of these.
- Primary parties must take reasonable steps to ensure compliance by secondary and downstream parties.
- Dispute resolution mechanisms and anti-avoidance provisions (civil remedy provision).
The Order applies broadly to all work in the road transport industry, except the cash‑in‑transit sector.
The Order will remain in force until the weekly average national terminal gate price for diesel falls below $2.00 per litre. This price is measured by the weekly diesel price report of the Australian Institute of Petroleum. The FWC will review the Order after one month, and subsequently at three‑monthly intervals.
On 2 April 2026, the Transport Workers’ Union (TWU) and the Australian Road Transport Industrial Organization (ARTIO) applied for an emergency RTCCO, citing fuel price impacts caused by geopolitical disruption.
On 10 April 2026, the Minister for Employment and Workplace Relations, Amanda Rishworth, determined the application met the emergency threshold, triggering the expedited process.
The FWC made the final RTCCO on 20 April 2026. Information on the application, submissions, transcripts and FWC communications is available online: TWU & ARTIO application for a road transport contractual chain order – fuel cost major case (MS2026/1) | Fair Work Commission. This includes the submission that WALGA made in this matter.
WALGA encourages Local Governments to take proactive steps to check whether any of their contracts may be affected by the Order. This includes reviewing contracts and starting to plan for possible contract variations. This may require Local Governments to:
- Review their contracts register.
- Identify which contracts may be covered by this Order (consider Waste Management Contracts, road building/maintenance contracts, and other logistical/road transport based contracts).
- Check each contract for any subcontracting arrangements.
- Check whether contracts already include rise and fall clauses that may meet the requirements of section 4.6 of the Order.
- Consider what governance arrangements are required to vary each contract, if required. For example, identifying the decisionmaker with authority for variation of contracts entered into after a tender and considering whether a Council resolution is required to approve unbudgeted expenditure (refer s6.8 of the Act).
- Consider seeking legal advice if you are unsure if:
- a contract is covered by the Order;
- a contract contains an appropriate rise and fall clause; or
- assistance is needed to draft a variation instrument, and what that variation clause says.
WALGA has sourced from the WALGA Preferred Supplier Panel for Legal Services (PSP004-008) a list of legal practitioners who have indicated they are able to provide advice in relation to this matter. Please email [email protected] to obtain a copy of this list.
Waste
WALGA has continued to highlight to Government that if there is any restriction on fuel supply, waste collection, transport and disposal need to be a priority.
WALGA has contacted Preferred Suppliers to confirm their arrangements and contingency plans for fuel supply. Current information indicates supply is continuing. Both Waste Contractors, and Local Government’s delivering waste services, are currently reviewing their business continuity plans. These plans include consideration of which services would be prioritised or paused. If this becomes necessary, WALGA will work with Preferred Suppliers and Local Government to facilitate a consistent approach.
WALGA has flagged with the Department of Water and Environmental Regulation that some License amendments may be needed to facilitate improved waste collection/consolidation efficiency.
ER Guidance
This information is general in nature and intended to address common themes. It does not replace the need to obtain specific advice where particular issues arise. For specific workforce queries, contact WALGA Employee Relations on 1300 366 956 or [email protected].
For national system employers (for example, Shires of Cocos (Keeling) Islands and Christmas Island), the Fair Work Act 2009 (Cth) contains statutory stand down provisions.
For WA state system employers (including most WA Local Governments), there is no general statutory stand down provision. However, stand down rights may exist under an applicable industrial agreement or contract of employment, and those instruments should be reviewed carefully.
Before relying on any stand down provisions (whether statutory, contractual or under an industrial agreement), we recommend that specific advice be obtained.
Employees may request, and employers may wish to explore, alternative arrangements to manage fuel related disruption, including working from home.
There is generally no standalone entitlement to work from home under awards or industrial agreements. Working from home is typically a discretionary arrangement, subject to contractual terms and organisational policies.
Any arrangements adopted should be consistent with relevant policies, applied reasonably and consistently, and clearly communicated as temporary and subject to review.
Procurement - Managing Cost Increases and Contract Pressures
We understand that Local Governments are being contacted by suppliers seeking to pass on recent cost increases. Given current global and economic conditions, Local Governments may need to carefully manage requests to increase contract prices.
Possible approaches include:
- Enforcing existing contract terms, including any price review clauses.
- Engaging with suppliers to explore solutions that reflect current and anticipated market conditions.
- Considering a request to vary the price if it is reasonable, appropriate and complies with legislation.
The first step is to review the contract with the supplier:
- Check whether the contract allows prices or rates to change.
- If changes are allowed, consider whether the increase is reasonable and supported by evidence, or whether a lower increase can be negotiated.
If the contract does not allow price changes, Local Governments may still consider whether a contract variation is reasonable.
When responding to a request for higher prices, Local Governments may wish to consider:
- The risk of service disruption if agreement cannot be reached.
- Whether the contract allows for price changes and any required notice periods.
- Whether the supplier has clearly explained the increase and provided evidence.
- Whether there is enough budget to cover the increase.
- Whether other suppliers are likely to raise prices as well.
- How much time is left on the contract.
- The costs and effort involved in starting a new procurement process.
- How similar requests have been handled in the past.
- Whether services could be reduced, delayed, or managed differently to reduce costs.
- The legal and practical implications of seeking to enforce existing contract terms.
- There may be other factors that are relevant depending on the situation.
Given current economic conditions, requests for price or rate increases may be reasonable. However, Local Governments must consider the procedural and compliance requirements.
- If the contract allows for price changes, follow procedures set out in the contract terms.
- If the contract does not allow for price changes and was subject to a formal tender, any variation must comply with the Local Government (Functions and General Regulations) 1996. Regulation 21A(a) allows variations only where they are necessary for the supply of goods or services and do not change the scope of the contract.
- If the contract was not tendered, contract variations should follow the local government’s internal policies and procedures.
The decision to vary a tendered contract must be made by:
- Council, or
- The CEO, if the variation falls within the CEO’s delegated authority.
All decisions should be properly documented for recordkeeping and contract management purposes.
If a budget amendment is necessary, Council approval is required under s6.8 of the Local Government Act 1995.
If a Local Government considers a request is not reasonable and cannot reach agreement with a supplier, it will need to decide what to do next.
This may include checking whether the supplier is willing to continue discussions. The Local Government may also need to think about how it will manage its relationship with the supplier. For example, it may need to consider how it would respond if the supplier’s performance declines, or if the supplier wants to end the contract.
If the Local Government is considering termination, legal advice may be required. This can help inform next steps and ensure any process to resolve the contract arrangement is handled correctly, with all risks and responsibilities clearly understood.
Road Transport Contractual Chain Order (RTCCO) - Implications for Local Governments
This webinar explores the Fair Work Commission’s Road Transport Contractual Chain Order (RTCCO) and how it impacts the Local Government sector, what obligations apply, and how Councils can respond. Join WALGA and Kingston Reid to hear from the experts on the key requirements under the Order, practical compliance strategies, and important considerations for contracts, procurement, and governance to support Local Governments in managing risk and meeting compliance obligations.
