With fuel prices soaring, many workers may be wondering if their employer should be footing the bill for their driving expenses. In recent days, several unions have lobbied the Fair Work Commission to provide relief for employees required to drive for work. They have also called on employers to transition to work from home arrangements to help ease the financial pressure on office workers.
In this article, we’ll cover the measures being proposed and the changes the Fair Work Commission has agreed to make to provide financial relief for rising fuel costs. We’ll also explain what the law currently says about when employers are legally obligated to pay for your fuel costs.
It might feel like you are working the moment you leave your house to head to work. However, the law generally sees that trip as a personal choice rather than a professional requirement. Therefore, your employer is generally not legally required to pay for fuel used to travel between your home and your regular place of work. This is considered a private expense, similar to buying your own lunch or work clothes. Even if you live 50km away or fuel prices double, the responsibility typically remains with the employee.
However, the situation is different if you are required to use your car to perform your job. This could include driving from the office to a client site, traveling between two different worksites, or picking up supplies. This is a work-related expense. In these scenarios, you are usually entitled to compensation for fuel costs from your employer.
The exact entitlement depends on the terms of your modern award, enterprise agreement or employment contract. Many workplace instruments include a vehicle allowance that compensates employees for using their private vehicle for work duties. For example, modern awards (like the Clerks Award or the Building and Construction Award) contain clauses that require employers to pay employees a per-kilometre allowance if they are directed to use their own car for work. The rate and conditions vary depending on the award and are updated periodically.
Some employers also reimburse vehicle use based on the ATO cents-per-kilometre rate, which is currently 88 cents per kilometre for tax purposes. However, this rate is primarily used for tax deduction calculations and is not automatically the legally required rate under workplace laws.
If you are unsure whether you are entitled to a vehicle allowance, you can check your award or agreement by searching for it on the Fair Work Ombudsman website.
With fuel prices rising, the Transport Workers’ Union, the Australian Trucking Association and major industry bodies have taken action. They jointly applied to the Fair Work Commission to force supply chain clients to absorb skyrocketing fuel prices. This would help provide emergency relief for sectors most affected by fuel spikes, like the road transport and delivery sectors. In these sectors, owner-drivers and gig workers like Uber Eats delivery drivers are being forced to pay for rising fuel costs out of their own pockets.
The unions asked for changes to the “Contract Chain Order” powers within the Fair Work Act. These powers give the Fair Work Commission the authority to mandate that major transport clients provide equitable contract terms. This includes clients like mining firms, large retailers and manufacturers. These protections are designed to ensure that workers down the supply chain receive sufficient compensation to meet their rising overheads.
The Transport Workers’ Union argued that companies at the top of the chain hold the economic power. Therefore, they must share the burden of the oil shock rather than shunting it onto owner-drivers and gig workers. The union’s national secretary, Michael Kaine, stated that while the current laws allow for consultation, the crisis is moving too fast for traditional processes.
He said that Australian businesses are at “imminent risk of collapse” because retailers and other businesses are “refusing to pay their fair share” for rising fuel costs. Kaine said that the federal government “must act now to put in place emergency powers.” Otherwise, we will see “more transport workers die on our roads,” businesses going insolvent and our supply chains at “breaking point.”
Following these calls, the federal government announced that it will amend the Fair Work Act 2009 in response to the fuel crisis. This amendment will remove the mandatory six-month lead time currently required for contract chain orders. It will allow truck drivers and transport businesses to apply for urgent variations to their pay or contracts, bypassing previous regulatory delays.
The Fair Work Commission will now have “emergency powers” to bypass standard consultation periods and mandate that major clients, including retailers like Aldi and Amazon, increase payments to contractors/drivers to cover the rising cost of fuel. It aims to ensure fuel increases are shared fairly across the supply chain, rather than being borne solely by the driver.
For those who work in offices, there have been calls for a return to a Covid-style WFH mandate. On 20 March 2026, the International Energy Agency published a series of recommendations for governments, businesses and households to help deal with the fuel crisis. One of the top recommendations is for employers to implement work from home mandates “where possible.”
Federal energy minister Chris Bowen described the Agency’s recommendation for WFH as “sensible,” noting that remote work is now a permanent fixture of Australian life. However, he stopped short of a WFH mandate, preferring to leave the decision to individual companies. Meanwhile, the Liberal opposition slammed the WFH proposal. Senator Jane Hume argued that it would do nothing to help the truckers, farmers, miners and manufacturers who cannot work from a laptop.
Following the energy minister’s comments, the Finance Sector Union and the Australian Council of Trade Unions lobbied for employers to immediately suspend in-office mandates. They argued that with fuel tanks now costing upwards of $150 to fill, allowing staff to work from home is the most effective way for bosses to provide financial relief. The Finance Sector Union pointed to the fact that work from home mandates worked effectively during COVID.
It said that finance workers “demonstrated that we can perform our roles effectively by working from home without disrupting workplace operations.” The Finance Sector Union said that working from home would be a zero-cost pay rise for employees. Meanwhile, the Australian Council of Trade Unions Secretary Sally McManus said that proposals for employees to WFH isn’t just about saving fuel, “it’s about cost of living.” She urged employers to allow for remote working, particularly in regional areas where there is limited to no public transport.
The big four banks, namely the Commonwealth Bank, ANZ, NAB and Westpac have signaled that they are not yet willing to abandon the office. The banks noted that they currently have hybrid policies requiring staff to be in the office 50% of the time. They argue that this provides sufficient flexibility during the current fuel crisis.
Retail giants like Wesfarmers (which owns Bunnings and Kmart) have also signaled their resistance to the idea. However, Wesfarmers CEO Rob Scott has suspended non-essential air travel for the company’s staff. Bunnings managing director Mike Schneider warned that “every business is different” and has argued that blanket mandates overlook operational realities.
Meanwhile, Luxury Escapes CEO Adam Schwab has been far more scathing of proposed WFH plans. He has previously railed against remote working, calling it the “worst thing ever.” Speaking to Sky News about proposed WFH mandates during the fuel crisis, Schwab noted that the last time such a measure was enacted during COVID, “we had three years of complete government-driven destruction.”
Schwab claimed that the COVID lockdown led to Victoria “encountering the greatest crime wave since Jack the Ripper.” He pointed out that if the government wanted to conserve fuel, Australians could simply “use the public transport systems that we spent $100 billion on.”
Another prominent voice railing against a potential remote working mandate is Flight Centre CEO Graham Turner. He told Sky News that such a measure would negatively impact the productivity of Australian workers. Turner claimed that since the Covid lockdowns, the Australian economy has seen “no productivity growth.” He accused the International Energy Agency of “headline grabbing” by recommending businesses implement WFH policies during the fuel crisis. Turner said that the recommendation “reminds me of the Covid panic.”
Instead of suggesting WFH for Australian workers, Turner said that the government should be “saying the exact opposite” and instead encourage workers to turn up to work in person. He claimed that working from home would “damage” businesses and questioned whether it would even have any effect on oil supplies.
While some employers are resisting calls to require WFH, many others are reporting growing levels of employee absenteeism as fuel prices soar. This is according to employers’ organisation the Australian Industry Group. Its chief executive, Innes Willox, issued a warning that the fuel shortage is no longer just a logistical issue, but also now actively draining the workforce. According to Willox, the ripple effects of the global energy crisis are being felt directly on the factory floor and in retail shops.
Feedback from across the country indicates that many workers are struggling to maintain regular attendance due to the scarcity and skyrocketing cost of fuel. Willox noted that “deep concern” about the future is creating “unforeseen consequences” in Australian workplaces. He claimed there has been a particular spike in absences in sectors like construction, manufacturing and healthcare. He said that the impact of these shortages is “significantly biting into productivity” and warned that there was “greater deterioration to come.”
The Australian Industry Group urged the federal government to take action rather than leaving states to create their own individual rules. Willox warned against a repeat of the “disastrous” fragmented responses seen during the pandemic. He said that the country can’t afford “a fracturing” where separate states take different forms of action.
To ease the burden on both businesses and employees, the Australian Industry Group suggested that the government should “lay every option on the table.” This includes potential cuts to the fuel excise, which would help lower the price you pay at the pump. The organisation also called for discounted public transport fares and structured fuel rationing to ensure that essential industries and workers can keep moving.
If you believe your employer has acted unfairly, denied you lawful entitlements, or placed unreasonable costs on you as part of your job, it’s important to understand where you stand under workplace law.
Australian Workplace Discrimination Representatives (AWDR) assists employees nationwide with unfair dismissal claims, general protections disputes, redundancy and unpaid entitlements, forced resignation matters and sexual harassment complaints. We can help you assess whether your employer’s actions are lawful and explain what options may be available if your workplace rights have been breached.
Your initial consultation is free and private, allowing you to get a clear understanding of your options. If you’re unsure about your rights at work, contact us at 1800 333 666 to speak with our team.
