Summary
SYDNEY, Sept 21 (Reuters) – Australia’s industrial arbitrator on Thursday proposed steps to Chevron (CVX.N) and unions to resolve a long-running dispute over pay and conditions at two liquefied natural gas (LNG) projects, to end strikes that have roiled world gas markets.
The Fair Work Commission (FWC), which has the power to impose a settlement, said it “strongly recommended” parties accept its proposals to end work stoppages that began on Sept. 8 at the Gorgon and Wheatstone LNG operations, which supply around 7% of the global LNG market.
The prospect of prolonged disputes at three LNG operations in Australia, the world’s top LNG exporter, sent gas prices up as much as 35% in August, but markets eased after a dispute involving the country’s biggest LNG plant was resolved.
The commission’s recommendations came a day after the latest talks between Chevron and a union alliance over strikes at the Wheatstone and Gorgon facilities ended without a deal.
The two sides have until 9 a.m. on Friday (2300 GMT, Thursday) to decide whether to accept the commission’s recommendations, ahead of a scheduled hearing later in the day.
“I strongly recommend that the parties adopt the recommendations … which will hopefully resolve these disputes,” FWC Commissioner Bernie Riordan said.
Chevron and the unions said they would review the recommendations.
“In my view, the parties are close to achieving their desired outcome of registered enterprise agreements to cover the wages and employment conditions,” Riordan said in the filing.
The tribunal has the power to halt the strikes, which escalated to two 24-hour work stoppages over the weekend.
Chevron has previously said it would not comment on the strikes and that its focus was maintaining reliable operations when disruptions occur.
FRIDAY HEARING
Energy analyst Saul Kavonic said the arbitration hearing was likely to go ahead despite the commission’s effort to avoid it. A union official who declined to be named said the unions continue to prepare for Friday’s hearing in Sydney and members based in Western Australia are already on their way to attend.
The hearing was sought by Chevron for the commission to declare bargaining had reached an “intractable” stage following more than nine months of talks, which would end the strikes and allow the tribunal to set terms and conditions of employment.
Unions have argued in a submission to the commission that talks are not intractable, and total pay for some roles at Chevron remains below equivalent roles at Woodside , where the company and unions struck a deal last month.
Chevron said in a statement on Thursday it engaged in “meaningful negotiations” but unions had demanded terms above market standards.
Riordan said both Chevron and the unions “spent countless hours at the negotiating table” and the talks resulted in an agreement on the majority of provisions.
“It would be a pity and very frustrating to simply throw out these agreed positions and have the parties return to their respective logs of claims for any future arbitration,” Riordan said.
Reporting by Renju Jose in Sydney; Editing by Alasdair Pal and Sonali Paul
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