Chevron to try to halt strike in Australia using untested law

Chevron Australia does not expect to reach an agreement with unions in the current dispute over wages and working conditions. Instead, it will try to use a new, untested legal option to halt strikes at its liquefied natural gas (LNG) facilities at Gorgon and Wheatstone. Reuters reported this today. Unions at both facilities, which account for more than five percent of global LNG supply, are now preparing for full-scale strikes. Australia is the world’s largest LNG exporter.

Hundreds of employees at both facilities began brief strikes last Friday after five days of talks on wages and working conditions ended without an agreement. The unions said that, without a deal, they would step up the strikes from Thursday and planned to stop work entirely for two weeks.

Chevron said today that it sees no reasonable prospect of reaching an agreement. It will therefore ask Australia’s Fair Work Commission to declare the negotiations intractable. If this is accepted, the strike could be ended.

A Chevron spokesperson told Reuters that both facilities are operating for now. However, they declined to provide further details.

The case will be a landmark test of new laws introduced in June that empower the arbitrator to force the parties to reach an agreement they are unable to conclude themselves.

With unions set to begin full-scale strikes on Thursday, the arbitrator is unlikely to have time to hear arguments and issue a ruling before then. The first hearing is scheduled for Tuesday at 15:00 local time (07:00 CEST) in Melbourne and will deal only with administrative matters.

Even if the strikes escalate, analysts do not expect production to be disrupted for several weeks, as both facilities have stockpiles. Some Wheatstone employees have also offered to keep working during the strike to maintain domestic supplies. Any supply problems would therefore emerge only after several weeks.