Chevron Australia pursuing untested legal strategy

Chevron Australia (CVX.N) has abandoned hopes of reaching an agreement with unions and is now opting for an untested legal strategy to halt industrial action at its Gorgon and Wheatstone liquefied natural gas facilities. This decision comes as unions gear up for full-scale strikes.

After five days of last-minute negotiations ended without a resolution, hundreds of workers at these facilities, responsible for over 5% of global supply, initiated brief strikes on Friday. Unions have announced plans to escalate these actions to two weeks of round-the-clock strikes starting on Thursday.

On Monday, Chevron announced that it perceives “no reasonable prospect of agreement” and will seek a declaration of “intractable bargaining” from Australia’s industrial authority, the Fair Work Commission. If granted, this declaration would put an end to the strikes and allow the commission to impose an agreement.

A Chevron spokesperson expressed disappointment, stating, “Unfortunately, following numerous meetings and conciliation sessions with the Fair Work Commission, no agreement has been reached as the unions are demanding terms significantly above market norms.”

This case represents a landmark test of new laws, initially introduced in June, which grant the authority to compel parties to reach an agreement when they are unable to do so themselves.

However, given that unions are poised to launch full-fledged strikes on Thursday, it is improbable that the commission will have sufficient time to hear arguments and make a decision beforehand. The initial hearing scheduled for Tuesday at 3 p.m. (0500 GMT) in Melbourne will solely address administrative matters.