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Offshore Alliance EBA Win – Montara Venture FPSO facility

May 20, 2021

Offshore Alliance members have won an epic battle on the Montara Venture floating production storage and offtake facility, staring down pay cuts and threats of outsourcing, and achieving significant gains in the process.

The win came in the face of bitter employer tactics and sets the scene for similar action elsewhere in the offshore gas and oil industry.

The Offshore Alliance – a joint organising venture between The Australian Workers’ Union and Maritime Union of Australia – began bargaining with Jadestone Energy Australia for an enterprise agreement to cover Montara workers in early 2020.

The Montara Venture FPSO facility is run by Jadestone Energy Australia, and is located 690km west of Darwin and 630km north of Broome.

There are 46 workers on board, and over the course of the negotiations, 43 joined the Offshore Alliance and engaged in both employee claim and employee response protected industrial action. Only Alliance members took industrial action in support of the employee claims during bargaining, despite other employees being members of at least one other union.

From the outset, Jadestone’s key claim was to cut its employment costs by 14%, with the workers being the ones to bear the brunt of this. Jadestone did not impose the same demand on its management. Jadestone wanted to use the negotiation process to identify where this 14% saving could come from, despite having just posted a large profit.

AWU Assistant National Secretary Misha Zelinsky said at time workers had been left “appalled and disappointed” by the company’s decision to slash pay by up to $18,000 a year after posting a record annual revenue of $US325 million and a huge profit.

The Alliance pushed back on the employer’s claim to cut pay packets. Alliance members put forward their claims, which included:
● job security provisions (most importantly, pay parity provisions for contractors so Jadestone couldn’t just simply contract out members’ jobs).
● Income protection.
● Annual pay increases (members had not had an increase since January 2019).
● Locking in the current roster, so unilateral changes could not be made to the work cycle.
● Maintenance of generous redundancy provisions.

In September 2020 the Alliance applied to the Fair Work Commission for a protected action ballot order, which was vehemently opposed by Jadestone. The application went to hearing and the order was granted on September 7. In the subsequent ballot Alliance members overwhelmingly endorsed four and 24-hour stoppages on the Montara and industrial action began in December.

On December 18, the Alliance applied for another protected action ballot order, this time to have members vote on various work bans rather than stoppages. This application was once again opposed by Jadestone and went to hearing. Despite the company’s many and varied objections to the application, the order was granted on January 19. Members again overwhelmingly endorsed all six actions.

Bargaining continued but was strained. The negotiations were plagued with inconsistencies in position, including the employer reneging on previously agreed items.

On March 3 the Alliance provided a notice of industrial action to Jadestone, notifying the company that members intended to engage in a month-long stoppage of work from March 13.

But it was a bridge too far for Jadestone, which hit back by taking legal “employer-response action” against its striking workers, notifying its employees that it intended to lock out three Alliance members, one of whom was the union delegate currently on swing. This was the first lock out in the offshore environment in recent memory.

Being a remote facility, Jadestone ordered the locked-out workers to take a helicopter to the mainland. However, now that the company had engaged in employer response action, the Alliance and its members were legally permitted to engage in “employee response action”. As part of this employee-response action, the Alliance notified the company that its members would refuse to assist a helicopter to land, refuel or depart.

Jadestone also threatened legal action and Federal Police involvement against the locked-out workers for trespass, as they were not leaving the facility due to the new work bans put in place by Alliance members.

Additionally, the Alliance notified the company that further work bans would be put into effect so that no members would travel to the well head, no members would participate in any work in connection with the Montara offloading stored hydrocarbons to a tanker, and prevent the mobilisation or demobilisation of workers to and from the facility by helicopter.

The reduced output as a result of these bans cost Jadestone an estimated $600,000 a day. The bans were in place for four days.

“Alliance members stared down the threats and retaliation of their employer for one simple reason: job security provisions. Members considered that without strong job security provisions in the EA, their jobs would be gone to the lowest bidder sooner or later,” Offshore Alliance spokesperson and AWU Branch secretary Brad Gandy said. “These negotiations didn’t proceed as smoothly as we all hoped with the compant taking a very inflexible and hostile approach. Unfortunately for the company, Alliance members were ready and willing to take all actions they thought necessary to secure their futures and the union backed them every step of the way.”

On March 26, the Alliance and the company came to an in-principle agreement for the Jadestone Energy Montara Venture Enterprise Agreement 2021. Far from pay and staff cuts, it will see significant improvements for workers covered, thanks to the efforts of members of the Offshore Alliance.

Voting for the EA opened on April 27 and the result was a 90% endorsement by employees. It will be lodged with the Commission later this week.

“We were caught in a stare down with a multinational employer and it was the employer who blinked,” Mr Gandy said. “The Alliance once again showing the industry that its members will not back down from a fight.”

The newly-made EA includes:
● Actual rates of pay in EA, which are between $188,275-$256,496 on approval;
● 2% yearly increases to rates of pay.
● Job-security provisions preventing the company from hiring a contractor or labour hire to perform work for less than the rates in the EA.
● 14% superannuation.
● A 3/3/3/6 roster that cannot be changed unilaterally by the company.
● Income protection of 85% of income up to $4100 per week for 104 weeks.
● Redundancy provisions of 3 months’ pay upfront, plus 2.5 weeks’ pay for each year of service, with volunteers for redundancy given first preference.
● Improved dispute-resolution clause and recognition of union delegates.

Mr Gandy said the flow on from this campaign could be huge. Jadestone has another facility – Stag – and bargaining will begin there soon.

“This will be a great reference point for when employers think about taking employer response action against their employees in the future. If they are Alliance members, they will probably think twice.

“The Alliance won this because of the members’ willingness to take the bosses on. Alliance members on the Jadestone Montara Venture are to be thanked by workers in the industry at large for their courage and commitment to securing their employment conditions and doing their part to disrupt and prevent this race to the bottom in workers’ wages.”

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