The Electrical Trades Union and Construction Forestry Mining and Energy Union say 850 contractors were left without work yesterday after Laing O'Rourke said it had not been paid for its work on building four cryogenic tanks for the Ichthys LNG project in Darwin by KHI for the past four months.

 

Laing O'Rourke was reported to be owed $170 million by KHI when it withdrew from the contract. 

 

Other reports suggest that more than 1000 workers could be stood down; and while the unions look to place the blame, Laing O'Rourke said it would try to redeploy staff to other projects while also helping sub-contractors hit by the dispute.

 

Laing O'Rourke said it notified the parties at the most recent meeting in Tokyo last Thursday that it would "take action to protect itself from the consequences of KHI's conduct, unless urgent measures to rectify the situation occurred".

 

"KHI declined to take those necessary steps," the company said yesterday.

 

Ichthys is expected to start up in the third quarter of this year, and operator Inpex maintains the dispute has not affected that target as tank construction is about 91% done and the construction is "not on a critical path" for start-up.

 

Unions say the demobilised workforce was made up of a mix of Darwin locals and fly-in, fly-out workers from across Australia.

 

Unions picketed JKC's Darwin office this morning just as the ETU and CFMEU filed a joint Fair Work Commission application alleging that Laing O'Rourke breached clauses in workplace agreements that required consultation with employees around redundancies when it sacked its Inpex workforce.

 

ETU Queensland and NT Branch acting secretary Peter Ong said the union would apply public pressure to JKC until the workers and subcontractors affected by the project's mismanagement received a "just outcome".

 

"Many of these people have leases or mortgages to pay in Darwin," Ong said.

 

"They have made lives for their families in Darwin and now, through no fault of their own, they've had their livelihoods torn from them.

 

"This situation is fundamentally unjust and we are determined to ensure JKC rights this wrong.

 

"JKC and Kawasaki Heavy Industries are ultimately responsible for the pain being experienced by these 850 workers and their families.

 

"It is as a result of their mismanagement that so far two major contractors have walked away from this project and left hundreds of ordinary people without a way to pay their bills.

 

"Nobody sitting in boardrooms in Tokyo is wondering how they're going to keep their house. When these companies fail, it is working people here in Darwin and around Australia who are left to pay the price."

 

 

The CFMEU and ETU said sub-contractors may not be protected by the Turnbull government's construction industry regime, which the unions said were "shown to be hollow" by the withdrawal of Laing O'Rourke.

 

The unions pointed out that Cash assured the parliament last year that her legislation would ensure that sub-contractors were paid promptly and that people working for them would not be disadvantaged by delays in payment.

 

"Her law supposedly requires Laing O'Rourke to have informed the Australian Building and Construction Commission of their situation and ensured that arrangements are made to look after these people," CFMEU construction and general national secretary Dave Noonan said.

 

"Either the ABCC have sat on the information and done nothing, or they have never been told."

 

ETU national secretary Allen Hicks said that his union and others had repeatedly warned of "industrial chaos" in the lead-up the introduction of the government's regime, but that the warnings had fallen on deaf ears.

 

Energy News contacted Cash's office, however she is in New York.

 

Minister for Resources and Northern Australia Matt Canavan told ABC that he had been in touch with Inpex yesterday over the Laing O'Rourke issue.

 

"Inpex at this stage have reassured me that the dispute's not with the workers as such, it's a dispute between a contractor and a contractee and they hope that arrangements can be put in place to ensure those workers affected can continue to work on the project," he said. 

 

"The work needs to be done, notwithstanding the dispute that's occurring at the moment. But I'm very mindful of that and will be getting more information in the next couple of days."