Petrol Supply Constraints: Key workforce and service delivery considerations for employers

Australia’s emerging oil and petrol constraints are no longer simply a supply‑chain issue. While the situation remains fluid, organisations should now be considering the potential implications for workforce availability, continuity of service delivery and legal compliance if fuel disruption escalates.

This is familiar territory. During COVID‑19, employers were required to identify critical operations, respond to transport and workforce disruption, and make rapid decisions while remaining compliant with workplace laws. Fuel scarcity raises similar challenges, but in a different legal and operational context. Importantly, many of the lessons around early planning, flexibility and communication remain highly relevant.

For employers, the task is to balance operational continuity with obligations under the Fair Work Act 2009 (Cth) (Fair Work Act), industrial instruments and anti‑discrimination law. Organisations that respond best will be those that plan early, consider impacts across their whole workforce (including contractors and labour hire arrangements), and respond lawfully, consistently and in a way that aligns with their values.

Essential and Non Essential Services: Framing risk and expectations

There is currently no broad “essential services” regime of the kind implemented during COVID‑19 lockdowns. However, the distinction remains important from a workforce planning and risk perspective.

Fuel constraints are likely to affect sectors unevenly. Organisations delivering critical services, including healthcare, disability support, education, transport, logistics, utilities and food supply, may face heightened expectations to continue operating even in constrained conditions. Other services may have greater scope to scale back, modify delivery models, or temporarily defer non‑critical activities.

The critical question for employers is not whether they are “essential”, but how fuel scarcity affects their ability to operate safely and lawfully. Employers should start thinking now about where their exposure lies, including:

• roles or functions that rely heavily on fuel‑dependent travel or deliveries;
• activities that are genuinely critical versus those that can be deferred; and
• whether services could be delivered differently, including through remote or centralised models.

Working through these issues early will support defensible and consistent decision‑making if disruption intensifies.

Stand down under the Fair Work Act: Narrow and fact‑specific

Industrial instruments such as Awards, Enterprise Agreements and employment contracts may contain stand down mechanisms. These instruments should be checked at first instance to determine the rules that apply to an employee where they can no longer be usefully employed. If there are no relevant provisions in these instruments, then the Fair Work Act permits employers to stand down employees without pay where they cannot be usefully employed due to a stoppage of work for which the employer cannot reasonably be held responsible.

A petrol shortage may, in limited circumstances, enliven a lawful stand down. However, the threshold is high and the assessment is highly fact‑specific.

In practice, stand down may only be arguable where the organisation has closed or reduced operations because of an enforceable government direction, or when fuel disruption causes a genuine stoppage of work, for example because critical inputs cannot be delivered, essential on‑site staff cannot attend and no alternatives exist, or fuel‑dependent processes cannot be performed safely or legally.

By contrast, stand down is not available merely because conditions become more difficult. Increased costs, reduced demand, partial disruption or individual transport difficulties are unlikely to meet the statutory test. A clear causal connection between fuel constraints and a stoppage of work is required.

Before considering stand down, employers should carefully document impacts, explore alternatives (such as redeployment or flexible work), review applicable awards, agreements and contracts, and communicate early with affected employees.

When employees cannot get to work: A reasonable and consistent response

Fuel scarcity will inevitably affect some employees’ ability to attend the workplace. As many employers experienced during COVID‑19, rigid or inconsistent responses in this space can quickly give rise to disputes and legal risk.

An employee’s inability to attend work due to fuel access is not, of itself, a lawful basis for stand down. Instead, employers should adopt a structured and reasonable approach that balances operational requirements with legal obligations.

Depending on the circumstances, this may involve exploring alternative arrangements such as remote work, accessing accrued leave, or unpaid leave by agreement. What employers should avoid is unilateral action that is not legally supported, including imposing unpaid leave, disciplining employees where non‑attendance is genuinely outside their control, or applying inconsistent rules across the workforce.

Supply chain disruption: Flow‑on workforce impacts

Fuel shortages rarely affect only one part of an organisation. Disruption to freight, suppliers or service partners can quickly flow through to workforce issues, affecting rosters, hours of work and service delivery models.

From an employment perspective, this may require changes to how work is organised, including adjustments to hours, consultation under awards or enterprise agreements, redeployment or cross‑skilling, and reconsideration of contractor or labour hire arrangements.

Legal risk most often arises where changes are rushed, poorly documented or implemented without required consultation. Employers who identify likely supply chain pressure points now will be better placed to align workforce planning with operational reality.

Cost pressures, travel and expenses

Rising fuel costs and scarcity can also create immediate financial pressure, including higher freight costs, increased fleet expenses and renewed scrutiny of travel allowances and reimbursements.

Employers should proactively review employment contracts, policies and industrial instruments that govern travel and expense obligations, as well as supplier arrangements that allow for fuel surcharges or price variation. Experience from COVID‑19 suggests that temporary, well‑communicated adjustments developed through consultation are significantly lower risk than reactive changes made under pressure.

Flexible work and adjustments: Obligations remain

Operational disruption does not displace legal obligations. Employees with disability, caring responsibilities or other protected attributes may be disproportionately affected by fuel shortages, and employers continue to have obligations to make reasonable adjustments unless doing so would cause unjustifiable hardship.

Eligible employees may also make flexible work requests under the Fair Work Act, which must be genuinely considered and responded to within statutory timeframes. Blanket refusals or inflexible positions are unlikely to withstand scrutiny.

Communication and Culture: A critical risk lever

As COVID‑19 demonstrated, uncertainty itself creates risk, including psychosocial risk. Employees may be anxious about cost pressures, job security and expectations around attendance or availability.

Employers should undertake a risk assessment in this context and consider controls to mitigate the workplace risks arising from the current uncertainty. This process should be documented and reviewed.

Clear, early and empathetic communication will significantly reduce the likelihood of grievances, disputes and disengagement. Employers should consider preparing messaging now that explains how decisions will be made if disruption escalates, what flexibility may be available, and where employees can seek support. Even a legally sound response can fail if it is poorly communicated.

Why preparing now is prudent, not alarmist

Fuel constraints may ultimately resolve with limited disruption. However, organisations that wait until impacts are acute will have fewer lawful and practical options available and increased exposure to risk.

Prudent organisations are already stress‑testing operations and supply chains, identifying fuel‑dependent roles, reviewing contracts and policies, planning consistent responses and preparing communication strategies in advance. These steps are valuable regardless of whether formal fuel limits or government mandates are introduced. Even in the absence of regulation, fuel scarcity can disrupt workforce availability, service delivery and organisational culture.

How we can help

Moores advises employers on navigating workforce disruption, operational risk and compliance during periods of uncertainty. We can assist with scenario planning, reviewing stand down and flexible work options, advising on consultation obligations, and supporting lawful and practical responses aligned with organisational values. Contact us on (03) 9843 0418.

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^{Disclaimer: This article provides general information only and is not intended to constitute legal advice. You should seek legal advice regarding the application of the law to you or your organisation.}