Australia tribunal pushes Chevron, LNG unions to resolve wage fight

Illustration shows Chevron logo and natural gas pipeline

A 3D printed natural gas pipeline is placed in front of displayed Chevron logo in this illustration taken Feb. 8, 2022. REUTERS/Dado Ruvic/Illustration/File Photo Acquire Licensing Rights

  • FWC ‘strongly’ recommends parties accept its proposal
  • Chevron, unions have until Friday morning to decide

SYDNEY, Sept 21 (Reuters) – Australia’s industrial arbitrator on Thursday pushed Chevron (CVX.N) and unions to resolve a long-running dispute over pay and conditions at two liquefied natural gas (LNG) projects and bring to an 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 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.

“In industrial disputes like this, time is on the unions side as they can engage in protracted strikes that continually impact Chevron’s revenue and costs. An arbitration hearing could cut that time short and thereby benefit Chevron,” he said.

The union continues to prepare for Friday’s hearing in Sydney and members based in Western Australia are already on their way, said an official, who declined to be named as they were not authorised to speak to the media.

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 clear the way for the tribunal to set terms and conditions of employment.

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.

The commission recommended an increase in certain allowances for employees, and said a committee would be set up to work over the next three months to list the skills required for staff to become eligible for promotions.

Employees should also be paid to travel to attend training sessions, and Chevron must pay for their flights and accommodation if required, the commission said.

“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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source: reuters.com