One of Victoria's largest power generators will keep burning over the hot summer months, with a planned strike averted.
A day after announcing industrial action at the Latrobe Valley's AGL Loy Yang A power station, the CFMEU on Thursday afternoon backed down
The stoppage, planned for 24 hours on December 28, had been granted protected action status by the state's Fair Work Commission.
However the state government intervened on Thursday, threatening to launch action to have the commission terminate the strike.
"Unfortunately the protected industrial action notice will expire," a CFMEU spokeswoman told AAP on Thursday.
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"In consideration for the peak power usage period in January, the CFMEU will not seek an extension to take action then."
The protected action was due to come after 14 months of failed pay negotiations.
The plant produces up to 30 per cent of Victoria's electricity and January can see power spikes when temperatures soar into the high 30s.
AGL had promised to lock workers out if the strike went ahead because keeping the generator going was too important to the community.
But after the union cancelled the strike, AGL also cancelled its lock-out notice.
Victorian Industrial Relations Minister Natalie Hutchins said the decision to force the two parties to the Fair Work Commission was the right one.
"We are always ready to take action as necessary to protect Victorian families and we make no apologies for that," Ms Hutchins said.
"We welcome the end of the industrial action but we encourage the parties to sit down and resolve their differences."
The next facilitated bargaining meeting at the Fair Work Commission is scheduled for January 10.
