The standoff between Chevron Corporation (NYSE:CVX) and the Offshore Alliance, comprising the Australian Workers’ Union and the Maritime Union of Australia, looks set to finally come to an end.
The US energy giant has agreed to an industrial umpire’s compromise over some key terms and conditions.
Fair Work commissioner Bernie Riordan’s proposal addresses contentious points including travel allowances, overtime, job security, and loading, but leaves out remuneration.
Chevron accepted the recommendation from the mediator.
The dispute with trade unions has disrupted operations at Chevron’s Wheatstone offshore gas platform and the Wheatstone and Gorgon onshore LNG plants in Western Australia and caused volatility in European gas markets.
About 500 union members at the Wheatstone sites have, for the past two weeks, been engaged in work bans and stoppages which are set to continue until mid-October.
Strikes have yet to result in reduced production, however gas markets remain on high alert, with Chevron’s WA plants supplying about 7% of global LNG.
The acceptance of the mediator’s terms could stave off any major disruption. Riordan's statement indicates that the parties are nearing a historic first enterprise agreement for Chevron's Liquified Natural Gas (LNG) facilities in Western Australia.
“We have informed the [Fair Work] commissioner of our position and written to the unions and other employee bargaining representatives confirming our acceptance,” a Chevron Australia spokesman said late on Thursday.
Resolution is now in the hands of the unions.
Teetering on the brink of resolution
Riordan issued a call for Chevron and opposing unions to confirm by Friday, 9am AEST, their stance on his compromise proposal.
The mediator's unusual announcement has tilted the balance in favour of the unions, which rejected Chevron's attempt to force arbitration, arguing that negotiations are not "intractable" and a deal remains viable.
Chevron sought an "intractable bargaining" declaration, which would allow an arbitrator to resolve the dispute and could set a precedent under new laws introduced by the Albanese government earlier this year.
However, Riordan urged both parties to adopt his recommendations, cautioning against squandering the progress achieved through extensive negotiations.
OA spokesman Brad Gandy said union members are carefully considering Riordan's recommendations, which touch upon key bargaining claims.
Chevron maintains that it will not accede to fixed remuneration rates higher than market levels and will not be swayed by industrial action.
Energy analyst Saul Kavonic suggests that despite Riordan's intervention, arbitration hearings are likely to proceed.
“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,” he said.
“An arbitration hearing could cut that time short, and thereby benefit Chevron. It may set a new industrial relations precedent whereby employers just need to withstand industrial action long enough until they can achieve a forced arbitration outcome.”