Chevron Australia has abandoned hopes of reaching an agreement with unions and is opting for a newly enacted legal approach to halt industrial strike at its Gorgon and Wheatstone LNG plants. This decision comes as unions gear up for full-scale strikes.
Following the breakdown of negotiations lasting 5 days without a resolution, hundreds of workers at these plants, responsible for over 5% of the world's gas supply, initiated brief strikes last Friday, sending benchmark prices soaring. Unions have announced their intention to escalate the strikes to 2 weeks of continuous 24-hour strikes beginning Thursday, Sept.14 (OGJ Online, Aug. 29, 2023).
"Unfortunately, following numerous meetings and conciliation sessions with the Fair Work Commission, no agreement has been reached as the unions are asking for terms significantly above the market," a Chevron spokesperson said in a statement.
On Sept.11, Chevron said it perceives "no reasonable prospect of agreement " and will apply to Australia's industrial umpire, the Fair Work Commission, seeking a so-called "intractable bargaining" declaration. If granted, this declaration would put an end to the strikes and empower the Commission to dictate terms and conditions of an agreement.
This case is poised to become a test for the recently enacted laws, which were initially introduced in June and grant the regulator the authority to compel parties to reach an agreement when they are unable to do so independently.
Nevertheless, considering that unions are scheduled to commence extensive strikes on Thursday, it seems improbable that the umpire will have sufficient time to entertain arguments and reach a decision beforehand. The initial hearing, slated for Tuesday in Melbourne, will solely address administrative matters.
Production from both plants is ongoing, a Chevron spokesperson said. Some analysts said that while the strike could escalate, they did not expect production disruptions in the coming weeks as both plants have backup reserves.