Supply Chain shakeup: FWC proposing major changes

On 7 February 2025 the consultation process, which ABLA is involved in, commenced to consider the new TWU Application seeking an order regulating all supply chains involving a contract driver at the base of the chain – i.e. an enormous number of supply chains involving the delivery of goods and materials across Australia.

The TWU are claiming:

• for all parties within a supply chain to be paid on 30 days of work being performed;

• allowing the FWC to hear all disputes about contested payments within the supply chain outside this time frame;

• an end to contract terms in supply chains that automatically reduce contract payments based on predetermined productivity gains by secondary contract parties;

• an end to certain indemnity contract terms; and

• obligations to have periodic price reviews.

Implications for business

While we are still exploring what it is the TWU actually intend by its claim, it would appear that if granted their claims it would impact all parties in supply chains involving contract drivers to deliver goods and materials.

This could materially change the commercial nature of contractual arrangements not just between a road transport business and its contract drivers but between the prime contracting party and all secondary, tertiary etc contracting parties.

Process

The TWU Application is not technically being considered by the FWC as yet, but rather sits in a sub-committee of the Road Transport Advisory Committee, a new body established to guide the FWC on these matters.

The ‘supply-chain’ sub-committee is chaired by Mr Peter Anderson with FWC Commissioners Connolly and Sloan assisting. The sub-committee is working to see if any agreement can be reached, and it is likely to function for some months.

Nigel Ward and Julian Arndt are members of the sub-committee and will be participating in all further sub-committee meetings.

Insights

The TWU’s claims are likely to be subject to challenges as elements appear outside the power of the FWC although for now the sub-committee is working to understand the practicality of the TWU claims and what might be agreed to if anything.

Whether the new FWC powers extend to some of the claims invading commercial arrangements outside of the direct road transport business – contract driver relationship will be debated.  It may well be that some contractors in a contract chain might see the imposition of additional restrictions and obligations on their commercial partners and suppliers as commercially attractive.

For these reasons the discussion in the sub-committee is unlikely to follow a traditional union vs business divide and opinions may very well be based on where a business sits in such a supply chain.

Your Input

If you are a road transport business or distribute or receive products, goods and materials through a road transport business your views will be valuable as we navigate the discussions.

If you would like the opportunity to share your views on this issue, please send them through to info@ablawyers.com.au for Nigel Ward and Julian Arndt to review.

Australian Business Lawyers & Advisors will continue to keep you up to date on any developments with this matter.

Access a copy of the full TWU application.