Chevron Gambles on Untested Laws to Halt Australia LNG Strike Action

SEATTLE (Oil Monster): Chevron Australia 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 days before it escalates into full 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.

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.

"Until we have some case law, until we get some Fair Work Commission decisions on how the laws work, we don't know (how long the process will take)," said Shae McCrystal, a professor of labour law at the University of Sydney Law School.

"There's no precedent for this particular section."

A subsidiary of airline Virgin Australia made the only other application under these laws in June, local media reported. It took roughly three weeks to organise the first substantive hearings, but the parties reached an agreement the day they were due to start.

No talks are scheduled between unions and Chevron, according to the FWC website.

Offshore Alliance, a coalition of two unions, said on Saturday it was "bunkering down for a long dispute" and the U.S. oil and gas giant should prepare for "losing $billions of export revenue."

An Offshore Alliance spokesperson did not immediately respond to a request for comment on Monday.

Courtesy: www.reuters.com