This was published 1 year ago
WA resources jobs under threat as major contractor seeks financial lifeline
By Jesinta Burton and Peter Milne
The offshore workers’ union has demanded a major engineering contractor safeguard the entitlements of its members based at Chevron’s LNG projects in Western Australia, amid revelations the contractor’s Singaporean parent company is fighting to stay afloat.
WAtoday understands the Offshore Alliance has given AusGroup’s West Perth-based subsidiary AGC until the end of the day to guarantee hundreds of WA-based workers wouldn’t be left empty-handed in the event of a collapse.
Chevron's Wheatstone project in Western Australia.
It comes just days after AusGroup called on Singapore’s High Court to allow Deloitte and Touche Financial to step in as managers as it mulls a restructure and the offloading of assets and parts of its business.
Documents obtained through corporate regulator ASIC indicate AusGroup has more than 1050 employees across its Australian-based subsidiaries, including AGC, MAS Australasia and NT Port and Marine.
AGC is just 18 months into its 10-year maintenance contract with energy giant Chevron, which was tipped to support up to 500 employees over its duration.
Australian Workers’ Union secretary Brad Gandy told WAtoday members of its workforce had raised concerns about their severance pay and annual leave amid the lack of clarity, with the union following up last week.
But the company has not yet confirmed the entitlements would be protected.
“Once again, workers are the last to know about their own entitlements,” he said.
“It’s not good enough that companies keep their workforce in the dark.
“Unfortunately, we are seeing too many companies not being able to balance their books – in particular regarding debt and their workforce are left paying the price.
“We know members of the workforce have asked for guarantees directly and have not received them.
“Several workers have now raised concerns with us and we’ve been trying to get a better handle on what the situation is and making sure the company can service those entitlements.
“Hundreds of our members work for AGC, it’s one of our bigger work bases, and we want to make sure those entitlements are protected and that they’re not fighting for them alongside other creditors.”
AusGroup’s financial woes were laid bare in its latest financial report, with the company posting a loss of more than $31.6 million.
In the weeks that followed, AusGroup’s share price plummeted to a record low before it suspended trading on the Singaporean Stock Exchange.
In a statement to the market, AusGroup told shareholders that while the company was advancing a potential sale of assets or businesses of the group behind closed doors, there were no assurances the sale would materialise.
It followed the departure of two senior board members, including its managing director of more than five years Shane Kimpton, who will remain chief executive, and chief financial officer Christian Johnstone.
In June, AusGroup sold off its 3.1-hectare Kwinana Beach facility as part of a $16.2 million sale-and-leaseback agreement, with the proceeds used to bolster working capital.
The company attributed much of its loss to a non-payment under the East Rockingham waste-to-energy project and the slowing of activity at its port businesses in the Northern Territory.
In the report, AusGroup conceded it had been hit hard by supply chain issues, labour shortages and skyrocketing costs, which were having a major impact on its cost base and project margins.
AGC has been contacted for comment.
AGC was founded in 1988, with operations in WA, the Northern Territory and Victoria.
Since then, it has worked on a swathe of projects, including First Quantum Minerals’ Ravensthorpe Nickel Mine and Shell’s Prelude FLNG facility.
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