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Shell, unions reach agreement in Prelude gas facility industrial dispute

Shell, unions reach agreement in Prelude gas facility industrial dispute

ABC Kimberley / By Taylor Thompson-Fuller

Key points:

The industrial action began in early June

It resulted in Shell stopping shipments and suspending activity aboard

Shell and unions say they are happy to have finally reached an agreement

Industrial action aboard Shell’s floating LNG facility Prelude is set to come to an end after unions and the company reached an in-principle enterprise agreement for workers.

The industrial action, which began in early June, led to Shell putting a halt to shipments leaving the facility 400 kilometres off the Kimberley coast and a shutdown in production amid soaring gas prices.

The multi-billion dollar facility was brought online in 2019, but has been plagued by technical problems, safety concerns and cost blow outs.

The facility shut down temporarily after a fire was detected onboard in December but was later cleared by the industry regulator and brought back online in April this year.

Shell, unions ‘celebrate’ agreement

A Shell spokesperson said the company was “pleased to confirm an in-principle enterprise agreement has been reached with the Australian Workers’ Union and Electrical Trades Union”.

“The process to formally lift the work bans in place under the Protected Industrial Actions is expected to be completed shortly, which will enable the facility to commence the process to prepare for a hydrocarbon restart,” the spokesperson said.

“Our strong preference was for this to be resolved through an agreement and confident this was the best outcome for our workforce.

“We are now focused on moving forward with our workforce, returning to safe, stable production and delivering affordable, reliable energy to our customers to meet the critical demands on energy security.”

The Offshore Alliance, a partnership between the Australian Workers’ Union and the Maritime Union of Australia, said they were “celebrating” the in-principle enterprise agreement.

“Members were able to secure a range of improvements to their pay and rostering arrangements along with, critically, new job security and career progression provisions,” an alliance spokesperson said.

Australian Workers’ Union national secretary Dan Walton said it was a relief they had finally reached an agreement with Shell.

“Thankfully at the end of the day common sense has prevailed we ended up with an outcome late last night and we went to our members this morning and presented it,” Mr Walton said.

He said members supported the new agreement, which still needed to be voted on, and many would be returning to the facility to get back to work.

“Sure tensions get strained throughout these processes and it’s difficult for everyone involved but at the end of the day hopefully it will be voted up formally,” he said.

“Then everyone can get back to doing what they do best and focus on their day to day jobs and ultimately we want to make sure this facility is successful and our members have good jobs.”

End to months-long dispute

The dispute onboard Prelude centred around pay rises for workers onboard, job security and superannuation increases.

Negotiations on a new agreement began in 2020 but broke down when Shell wouldn’t offer pay rises, Mr Walton said in June.

Shell cancelled shipments from the facility in June, blaming industrial action related “bans” which stopped workers unloading cargo from the facility at certain times.

The Anglo-Dutch company then temporarily shut down production at the facility in July and threatened to lock out workers from the facility — but  backed down from the plan.

The shutdown and cancellation of shipments came when gas prices were soaring due to a shortage in supply and war in Ukraine, with experts at the time warning it could push prices higher.

Shell asked the Fair Work Commission in early August to put a stop to industrial action aboard Prelude to prepare for planned maintenance at the facility in September.

The application was rejected by Fair Work Commission Deputy President Binet, who said it was “inconsistent” with the Fair Work Act.

“It is in everyone’s interest that the parties reach agreement on the outstanding issues as quickly as possible,” Deputy President Binet wrote.

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