
(Reuters) – Chevron Australia (CVX.N) no longer expects to reach a deal with unions and will instead pursue an untested legal strategy to stop industrial action at its Gorgon and Wheatstone liquefied natural gas facilities as unions prepare for full scale strikes.
Hundreds of workers at the facilities, which account for over 5% of global supply, started short strikes on Friday after five days of last-minute negotiations broke down without a deal. Unions have said they will escalate to two weeks of 24-hour strikes from Thursday.
Chevron said on Monday it sees “no reasonable prospect of agreement” and will apply to Australia’s industrial umpire, the Fair Work Commission, for an “intractable bargaining” declaration, which, if granted, would end strikes and allow the umpire to dictate an agreement.
“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.
Production from both facilities was still ongoing, a Chevron spokesperson told Reuters, declining to give further details.
Australia is the world’s largest LNG exporter.
NO LEGAL PRECEDENT
The case will be a landmark test of the new laws, first introduced in June, which empower the umpire to force parties into an agreement they themselves are unable to make.
However, with unions set to start full blown strikes on Thursday, it is unlikely the umpire will have time to hear arguments and decide beforehand. A first hearing scheduled for Tuesday at 3 p.m. (0500 GMT) in Melbourne will only handle administrative questions.
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