Strike-Hit Chevron Australia to Invoke Govt's Forced Settlement Powers

Seeing "no reasonable prospect of agreement" with workers, Chevron Australia Pty. Ltd. is formally asking the country's Fair Work Commission (FWC) for the tribunal to exercise its option to enforce its own terms of employment.

Workers at the Chevron Corp. subsidiary's liquefied natural gas (LNG) facilities in Western Australia started their planned strike of at least three weeks on Friday after the two sides failed to reach a bargaining agreement despite mediation by the FWC.

Their union, the Offshore Alliance (OA) coalition between the Australian Workers' Union (AWU) and the Maritime Union of Australia, has accused the energy giant of resisting industry-level demands for employment conditions and alleged Chevron Australia was insisting on its own terms instead of accommodating a union-initiated enterprise bargaining agreement.

However, in a statement emailed to Rigzone on Monday Chevron Australia claimed the demands were above the market level and that with little chance of an agreement between the two sides, the company is applying for so-called intractable bargaining declarations by the FWC.

“Throughout the process to date, we’ve made generous, good faith offers and concessions in an effort to finalize Enterprise Agreements", the statement said. “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.

"Given we consider there is no reasonable prospect of agreement, we will now apply for Intractable Bargaining Declarations for Gorgon and Wheatstone Downstream. We will seek to have these applications heard with the existing application for the Wheatstone Platform".

Tweaked FWC rules that took effect June allow for the application for an intractable bargaining declaration from the government agency under which the FWC sets the terms of employment to be imposed on the disputing parties.

The FWC-decided settlement could only be sought after nine months of failed bargaining and after an attempt at mediation by the FWC to resolve the dispute, according to information on the commission's website.

Chevron Australia's statement on Monday said, "While industrial action has started, Chevron Australia remains committed to attaining an agreement that achieves market competitive outcomes which are in the interests of both our employees and our company".

Rigzone sent requests for comment to the OA and the AWU on Chevron Australia's statement but has not received a response from the unions.

The AWU said in a statement September 1, "Offshore Alliance Members working for the foreign company have still not reached agreement on several key claims including job security, agreed rosters, mutual agreement on transfers to other Chevron worksites, mutual agreement on the working of overcycle, training standards, travel arrangements and rates of pay.

"Members are seeking remuneration outcomes which align with benchmark industry standards that apply to Chevron’s contemporaries Shell and INPEX and are soon to apply to Woodside. In negotiations to date Chevron has proposed remuneration terms lower than some Tier 2 oil and gas operators in Australian waters".

The AWU said in the statement on its website Chevron Australia now remains "the only major outfit on the WA [Western Australia] gasfields without an industry standard EA [enterprise agreement] covering its workforce".

"Offshore Alliance members at Shell’s LNG facilities secured an EA last year after 76 days of PIA. Members at INPEX secured an EA in 2022. And last week Offshore Alliance member representatives at Woodside endorsed an in-principle agreement negotiated with the company, with a vote on the EA to follow in the coming weeks", it said.

The pending EA with Woodside Energy Group Ltd. concerns an LNG plant in which Chevron Australia also holds a stake. The OA had planned a strike at the North West Shelf facility, which local company Woodside operates, but called it off after the in-principle agreement, according to a union statement August 24.

The OA initially planned at least seven days of no work at the Gorgon and Wheatstone facilities but has extended the walkout for at least two more weeks, accusing Chevron Australia of circumventing bargaining negotiations.

"The Offshore Alliance lawyers have served Chevron with a further Notice of Protected Industrial Action which will commence after our first 7 days of PIA kicks off on Thursday 7th September", the union said in a statement on Facebook September 5. "The new Protected Industrial Action Notice will escalate workbans and the OA will have rolling 24 x 1 hour stoppages, each day for 14 days from Thursday 14th September".

The union statement said the extended action was in response to Chevron Australia attempting to dodge a union-initiated deal and opting to put forward its own terms. The OA said an EA put forward by the company for a vote by employees had won only seven supporters out of 979 workers.

The strike could affect the security of gas supply in Asia. The bulk of the output from the Gorgon, North West Shelf and Wheatstone facilities goes to customers in Asia, which have signed long-term contracts, according to Chevron Australia.

It could also derail Chevron Australia's planned capacity expansion at Wheatstone, which the company announced August 23.

Chevron Australia's statement Monday confirmed "some contractor staff were demobilized in line with reduced activities".

To contact the author, email jov.onsat@rigzone.com