Are Your Sub-Contract Drivers Fair Work Compliant?

Australia’s last-mile delivery landscape underwent a major regulatory shift in August 2024, when the Fair Work Legislation Amendment introduced new protections for contract couriers and gig economy drivers (Uber etc).

Under the amended framework, many subcontracted drivers, previously classified as independent contractors, are now considered “employee-like workers” or “regulated road transport contractors”. This reclassification grants them entitlements that were once exclusive to employees.

A year on, it’s clear that many businesses still don’t fully understand their obligations under these rules, leaving them exposed to compliance and financial risks.

In this blog, we’ll break down:

• What changed under the legislation

• What regulated drivers are entitled to

• The business implications of those with a supply chain arm

• How Radaro is helping you stay ahead

What’s Changed?

To recap, the Fair Work Legislation Amendment created two new worker classifications that introduced expanded protections:

• Employee-like workers – typically platform-based gig economy drivers (e.g. Uber, food delivery riders, app-based couriers)

• Regulated road transport contractors – independent drivers operating in the transport industry, including subcontracted couriers involved in last-mile delivery.

Previously considered independent contractors, these workers now benefit from a baseline of employment-like protections, designed to curb exploitation and improve industry standards.

Key entitlements now apply

1) Minimum pay rates

While no specific minimum standard has been set for ‘regulated road transport contractors’, regulated drivers must be paid fairly for the work they do, not just per delivery. Based on comparable award rates, this will be between $25.65 – $30.12 per hour.

2) Superannuation and insurance

Employers (or those engaging contract drivers) are now responsible for contributing to superannuation and ensuring workers are covered by appropriate insurance.

3) Unfair termination protections

Regulated workers can no longer be terminated without due process or just cause.

4) Capped hours & required breaks

Regulations now place limits on maximum driving hours and require mandatory rest breaks. For example, drivers are now eligible for a paid 30-minute break after 5.5 hours or work.

5) Vehicle safety & compliance

Responsibility for ensuring that vehicles are roadworthy and compliant may now extend beyond the driver to the engaging party (i.e. the brand or 3PL).

Supply chain accountability

One of the most significant shifts we’ve seen a year on under the Fair Work legislation is the extension of accountability across the entire supply chain. No longer can businesses assume that outsourcing delivery removes their legal or ethical obligations.

Under the 2024 framework, everyone involved in the hiring, management, or delegation of regulated road transport work shares responsibility. This includes:

• Retailers and brands engaging 3PLs or courier networks

• 3PL providers who subcontract to individual drivers

Even if a business is not the direct employer of a driver, it may still be held accountable for breaches relating to:

• Underpayment of regulated workers

• Failure to provide or allow rest breaks

• Unsafe or non-compliant vehicle usage

• Unfair contract terminations

What Businesses Must Do Now

If you haven’t done so yet, the below steps are essential to remain compliant and protect both your brand and your bottom line:

1. Review existing contracts

• Direct courier agreements: Ensure contracts reflect new obligations like rest breaks, safety expectations, and minimum pay rates

• 3PL agreements: Include clauses requiring compliance with Fair Work standards and enable auditing of subcontractor treatment

2. Audit for risk and readiness

• Track hours worked, breaks taken, and vehicle condition where possible, even for subcontracted drivers

• Confirm insurance, licensing, and safety documentation is up to date across your in-house and outsourced fleet

3. Review your delivery model

• Assess whether an in-house, outsourced, full-contractor or even a hybrid model might offer better cost control and compliance visibility

How Radaro can help

Radaro clients already benefit from powerful tools that support compliance and transparency:

• Driver visibility: Track who’s delivering on your behalf, when, and for how long

• Proof of breaks and hours: Use digital logs to monitor working conditions and align with legal requirements

• Contractor oversight: Build transparency into your subcontractor network without micromanaging

Want to explore how Radaro can help? Contact Radaro via our website or via email at support@radaro.com.au.