PREMIUM FEATURES

Gippsland pay dispute deepens

THE Australian Workers Union has warned that strike action could again sweep across the Gippsland...

Gippsland pay dispute deepens

AWU Victorian state secretary Ben Davis told Energy News that the union was still seeking a compromise for new agreements to replace those that expired in late 2014, if ExxonMobil was successful with its Fair Work Commission "everything else is on the table".

If workers are bumped onto the award and the existing agreements are terminated, the pay rates will remain locked in for a six month period, after which they could fall by 40-50%.

Davis said that would mean the AWU could have the option of resuming bargaining with a fresh slate immediately, which could involve ballots and protected actions, including strikes.

The enterprise bargaining dispute has now dragged on for more than two years between the AWU and Esso, ExxonMobil's local business unit.

While progress has been made with the smallest of the three agreements, the Barry Beach marine terminal, the two larger agreements that remain to be finalised are for the offshore workers and the Longford and Long Island Point onshore facility.

The sticking points are similar to the causes behind the first strikes in the North Sea for a generation: pay and rosters.

Davis said workers were facing a massive pay cut if ExxonMobil was successful, something that has just happened in Western Australia at the Griffin Coal mine, where workers have agreed to a 19% pay cut after their enterprise bargaining agreement was terminated yesterday.

That cut is less than the 50% they had faced when the Fair Work Commission initially terminated the agreement, forcing workers onto the Black Coal Award, after an application from the financially struggling mine owner Lanco Infratech.

In Victoria, workers at Long Island Point and Longford are on around $170,000 per annum now, and could see wages slump to below $100,000pa.

"The resources sector and the offshore sector are areas that have always paid significantly above the award, and that is how it has been forever," Davis said.

"To take workers back to the award is quite a sledgehammer approach."

He believes ExxonMobil is using the pay dispute to seek the "holy grail" for the Gippsland Basin Joint Venture: longer shifts.

Bass Strait workers are on a one-week on, one-week off roster, a system that has been in place since the 1960s, but ExxonMobil wants to switch to a two-on, two-off roster, but the union is concerned about safety and staffing levels.

"I think the offshore roster issue has been the holy grail for Esso management for years and years, and now they are having a good hard crack at it," Davis said.

Davis said Bass Strait workers were not a FIFO workforce, and most live within an hour of the heliport, so they are not travelling the distances needed on the North West Shelf, so and 1/1 roster makes sense.

Davis says while it makes sense of have workers on the NWS on longer rosters, the idea is ludicrous in Victoria, and just doesn't offer any real productivity gains.

"The difference for 1/1 and 2/2 for Esso are insignificant. It's just a handful of helicopter flights," Davis said.

"They'll probably spend far more on legal fees fighting this than they will make in savings. A lot more."

Davis said he could understand wanting to change the roster if ExxonMobil had problems getting people to site, but "they haven't".

"It's largely a power play," Davis said.

"If Esso wanted a wages freeze and kept the rosters the way they are we could have worked around that somehow, but that is not the issue. They want the Holy Grail of 2/2."

He is also concerned at the safety impact of reducing the number of workers at Longford and Long Island Point.

The AWU has sat down with ExxonMobil 50 times over the period over three different agreements in the increasingly bitter dispute, which ExxonMobil is now seeking to take to the High Court, an application that won't be heard for several months.

If granted, the full hearing could be 6-12 months away.

An ExxonMobil spokesperson said the big US oiler remained committed to good-faith bargaining with the AWU.

"For more than two years, we have actively participated in more than 50 bargaining and conciliation meetings with the unions, including several chaired by the Fair Work Commission, as well as an independently mediated bargaining summit, in an attempt to secure productivity improvements (but) these engagements have led to little or no progress," he said.

He confirmed that Esso had applied to the FWC to terminate two of the expired enterprise agreements covering its Gippsland operations as "these agreements are outdated and based around work practices that are decades old and no longer reflect the nature of our business".

ExxonMobil says it has offered a "generous wage increase in our discussions with unions in exchange for improvements in productivity and flexibility that are considered standard for the oil and gas industry today".

The long-running Gippsland dispute echoes union support in the UK and Norway for strikes against Wood Group, which provides contract support to Shell on platforms in the North Sea.

There, Wood Group is seeking to cut wages by 30%. Around 400 workers went on strike twice in July, the first such action in 28 years.

Further strikes are expected today on the Curlew platform, and will roll across the North Sea into September.

The Barry Beach Marine Terminal is the main supply depot for the Bass Strait oil and gas operations, employing workers to support 23 offshore platforms and installations. Around 300 workers are offshore at any one time.

Earlier this year ExxonMobil and BHP announce plans to sell their interest in older oil platforms offshore Victoria.

TOPICS:

A growing series of reports, each focused on a key discussion point for the energy sector, brought to you by the Energy News Bulletin Intelligence team.

A growing series of reports, each focused on a key discussion point for the energy sector, brought to you by the Energy News Bulletin Intelligence team.

editions

ENB CCS Report 2024

ENB’s CCS Report 2024 finds that CCS could be the much-needed magic bullet for Australia’s decarbonisation drive

editions

ENB Cost Report 2023

ENB’s latest Cost Report findings provide optimism as investments in oil and gas, as well as new energy rise.

editions

ENB Future of Energy Report 2023

ENB’s inaugural Future of Energy Report details the industry outlook on the medium-to-long-term future for the sector in the Asia Pacific region.

editions

ENB Cost Report 2021

This industry-wide report aims to understand current cost levels across the energy industry