Our employees

As at 31 December 2022, the Group had 30,739 employees while as at 31 December 2021 the headcount was 31,916. At the end of 2022, the Parent Company had 21,239 employees versus 23,119 employees in 2021. The average headcount in the Group in 2022 was 29,981 persons. It was 579 persons lower than in the previous year. The average headcount in the Parent Company in 2022 was 21,132, which was 971 persons lower than in the previous year.

In 2021 the JSW Management Board decided to transfer free of charge a portion of JSW’s enterprise in the form of the “Jastrzębie III” Mining Area in KWK “Jastrzębie-Bzie” to Spółka Restrukturyzacji Kopalń S.A. As a result of the signed agreement, the Parent Company transferred 2,148 employees (including 1,234 employees of PGG) to SRK as of 1 January 2022. On the transfer date, these people were employees of KWK Jastrzębie–Bzie.

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Table. Number of employees by region

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Group company employees are mostly residents of the municipalities, counties and towns and cities where Group companies are based. Hence also managers of these companies come from the local communities. This is illustrated well by the fact that in 2022 one of every four Group managers (23.4%) was a resident in a municipality, county or city in which the registered office of a given Group company is domiciled (in the case of JSW the figure was 15.9%).

Table. New hires (excluding movements between Group companies / within JSW)

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Employee departures (excluding movements between Group companies / within JSW):

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Number of employees who took parental leaves:

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Number of employees who returned to work after their parental leaves:

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Rate of retention after parental leave (percentage of returns to work after parental leave ends)

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PAYROLL

Group companies have separate rules for employee compensation. The average monthly salary in Group companies in 2022 ranged from PLN 5,012.56 to PLN 13,856.85. The average monthly salary in the Parent Company is shown in the diagram below (in PLN):

RULES AND REGULATIONS CONCERNING COMPENSATION

The compensation of most JSW employees is paid on the basis of company-level collective bargaining agreements (“CCBA”) terminated with effect as of 1 January 2010. Employees who started their employment after 15 February 2012 are compensated according to the rules laid down in new employment contracts. Pursuant to internal regulations, employees of JSW receive compensation for their work composed of a base salary rate, a bonus or a piecework surplus, the Miner’s Charter (seniority allowance), a functional allowance (e.g. a wall-face allowance), and an allowance for work in onerous, dangerous and hazardous conditions. The level of an employee’s base salary depends on the category of the employee’s rank, the nature or the specifics of the work performed and the position held by the employee. Hiring employees for the appropriate jobs and awarding a category of rank are done on the basis of the Job Valuator. In addition to the aforementioned salary components, JSW employees are entitled to such additional benefits as: annual Miner’s Day bonus, Miner’s Day cash equivalent, additional annual bonus – the so-called 14th salary, free coal allowance, jubilee awards, retirement and disability severance pay, holiday travel costs refund allowance (referred to as the Miner’s Charter Ticket), and school aids allowance. Additionally employees may receive an incentive bonus and an OHS bonus.

Under the new employment contracts, employees are entitled to remuneration composed of a basic salary and period of service allowance. The level of compensation depends on the type of work performed and the working time. In addition to the aforementioned salary components, employees employed under new contracts are entitled to the following additional benefits: annual Miner’s Day bonus, additional annual bonus – the so-called 14th salary, free coal allowance, retirement and disability severance pay, holiday travel costs refund allowance (the so-called Miner’s Charter Ticket), and school aids allowance. Additionally employees may receive an incentive bonus and an OHS bonus.

On 8 February 2023, the Company entered into an Agreement with the Representative Trade Union Organizations under which salaries are raised by 15.4% compared to 2022, starting from 1 January 2023. The mutual employer–employee relationships are subject to national regulations and internal law. Under its cooperation with the Representative Trade Union Organizations, the Company steadily strives to unify the remuneration system across JSW through the Agreements executed on the basis of Article 9 of the Labor Code.

The following employee compensation rules apply at JSW:

• the Company-level Collective Bargaining Agreements concluded in the 90s, terminated effectively in 2009, when the Company became a single employer, applied in individual plants due to employment contracts referring to these documents,
• the Rules and Regulations of Compensation applying to the employees of the Management Board Office,
• the Agreement of 20 December 2004, entered into by the Management Board of Kompania Węglowa S.A., applying to the employees of KWK Knurów-Szczygłowice.

100% of employees are hired under employment contracts entered into on the basis of the above-described rules and the Labor Code.

DEFINED BENEFIT OBLIGATIONS

In accordance with the provisions of labor law, the Group pays employee benefits by virtue of the following:

• post-employment benefits: retirement and disability severance pays, adjustment disability benefits, death benefits,
• other long-term employee benefits: jubilee awards,
• other employee benefits: unused holiday leaves.

In its statement of financial position, the Group recognizes the commitment to pay the above benefits in the amount equal to the present value of the liability as at the end of the reporting period, taking into account actuarial gains and losses. The amount of the post-employment benefit liability in the form of defined benefit plans (retirement and disability severance pays, adjustment disability benefits, write-offs for the Company Social Benefits Fund for old-age and disability pensioners) and jubilee awards is calculated by an independent actuarial advisory company using the projected unit benefit method, until the expiration of this liability. The details of the benefit amounts are presented in Note 7.15. to the consolidated financial statements of the Jastrzębska Spółka Węglowa S.A. Group for the financial year ended 31 December 2022.

EMPLOYEE PENSION PLAN AT JSW

In order to meet the needs of JSW’s employees who exercised their retirement rights a little earlier than employees in other industries, the JSW Management Board decided to introduce an Employee Pension Plan in the company. On 21 February 2019, a Company-level Employee Pension Plan Agreement was signed (entered in the register of employee pension plans based on the decision of the Polish Financial Supervision Authority of 12 April 2019). On 25 February 2019, JSW entered into an agreement with PKO Parasolowy Open-End Mutual Fund and PKO Zabezpieczenia Emerytalnego specialist open-end mutual fund with separate subfunds. Based on the agreement participant contributions are paid into the above mutual funds managed by PKO Towarzystwo Funduszy Inwestycyjnych S.A. with its registered office in Warsaw. Approximately 67% of JSW employees have joined the plan.

Employees have access to opportunities for raising their professional qualifications by attending post-graduate studies, industry conferences, seminars or symposiums as well as training organised by external entities and by participating in training and courses organised by the employer.

Detailed rules for accessing opportunities for raising qualifications are described in internal documents such as policies, rules and regulations. The Group is constantly engaging in the area of employee development programs, and management education is also of importance because the success of the Group's initiatives depends on the competences of its team leaders. We strive to ensure that people holding managerial positions know their roles well and have the knowledge and skills necessary to perform them properly.

FREEDOM OF ASSOCIATION

As at 31 December 2022, there were 139 trade union organizations in the Group (137 as at 31 December 2021). Given that an employee may be affiliated with several unions, the total number of trade union members exceeds the number of the Group’s employees, and as at 31 December 2022 stood at 40 167, which translates into the union membership ratio of 130.7%.

At the Parent Company, the basis for cooperation with trade union organizations is set out in the Trade Union Act of 23 May 1991, the Collective Dispute Resolution Act of 23 May 1991 and the Principles of Mutual Cooperation Between the Management Board of JSW SA and Trade Union Organizations Operating in JSW adopted on 14 November 2019.

As at 31 December 2022, there were 67 Trade Union Organizations in the Parent Company (66 as at 31 December 2021). The number of trade union members stood at 34,331, which translates into the JSW union membership ratio of 161.6%.

In 2018, in accordance with the provisions of the Program for the Hard Coal Mining Sector in Poland, an Auxiliary Steering Committee for JSW was appointed, composed of 4 representatives of the JSW Management Board representing the employer and 4 representatives of representative trade unions representing the social party. The duties of the Auxiliary Steering Committee include supporting the work of the Mining Steering Committee.

MATERIAL DISPUTES INITIATED BY THE SOCIAL PARTNER AND RELATIONS WITH SOCIAL PARTNERS IN JSW IN 2022

Letter from JSW’s Representative Trade Union Organizations

In the letter of 27 December 2021, JSW’s Representative Trade Union Organizations requested that the JSW Management Board arrange a meeting on a salary hike as part of implementing JSW’s payroll policy. Its purpose was to present and discuss the proposed pay raise for 2022.

Two meetings were held on this subject matter. On 28 January 2022, the JSW Management Board and JSW’s Representative Trade Union Organizations signed an agreement on implementing JSW’s payroll policy in 2022. The base pay rates were raised under the agreement by 10% for all JSW employees as of 1 January 2022, while the value of supportive meals was raised from PLN 21 to PLN 30 per day. In later years, the value of these meals will be determined on the basis of the average wage in the business sector net of profit-sharing announced by the President of the Statistics Poland. The value of the meal will represent 0.5% of the wage above for Q4 of the previous year. In addition, in Item 3 of the Agreement, the Parties agreed that after evaluating JSW's financial position for H1 2022, they would decide on the payment of a one-off bonus to all JSW employees, which was regulated by a separate agreement.

The aforementioned Agreement exhausted all of the claims for raising pay and employee benefits in 2022 as of the date of its signing.

Agreement on the entitlement of JSW mine employees to additional leave

On 10 May 2022, an Agreement was signed by the JSW Management Board and JSW's Representative Trade Union Organizations regarding the entitlement of JSW mine employees to additional leave of 5 days after 5 years of service, and the entitlement to additional leave of 8 days after 10 years of service vested in all employees who had the “employed underground” note in their employment contract. The Agreement was aimed at unifying the rules in place in JSW's mines.

Letter of 13 June 2022 from JSW’s Representative Trade Union Organizations

In a letter dated 13 June 2022, JSW’s Representative Trade Union Organizations requested the JSW Management Board to schedule a meeting to implement Item 3 of the Agreement of 28 January 2022 regarding the 2022 payroll policy, and to renegotiate the provision of Item 2 of the aforementioned Agreement regarding the value of supportive meals.

On 5 July 2022, an agreement was signed between the JSW Management Board and JSW's Representative Trade Union Organizations under which employees in their employment status as at 30 June 2022 were granted a one-off bonus, which might not exceed the following amounts in individual employee groups: PLN 19,000 gross for employees working underground, PLN 16,000 gross for employees working in the Coal Preparation Plants and PLN 13,000 gross for all other employees. In addition, rules were established for the payment of one-off bonuses to JSW employees, based on which the decision on the individual amount of a one-off bonus for an employee was to be made by the Director of the respective organizational unit. The amount of the bonus was made conditional upon the employee's commitment to the fulfillment of his or her work duties.

Demand submitted by JSW's Company Coordination Organization of WZZ “Sierpień 80” (ZOK WZZ “Sierpień 80” JSW)

On 4 July 2022, ZOK WZZ “Sierpień 80” JSW addressed the JSW Management Board with a demand for an increase in the base salary rates of the Company's employees, in an amount corresponding to the increase in the inflation rate to 16%, with simultaneous compensation by the inflation rate starting from January 2022, and for an increase in the amount for supportive meals from PLN 30 to PLN 50 per day. At the same time it advised that the letter should be treated as initiation of a collective dispute in accordance with Article 7, sec. 1 of the Acton resolution of collective disputes of 23 May 1991.

In a letter dated 6 July 2022, the JSW Management Board responded to the demands presented in the letter from ZOK WZZ “Sierpień 80” JSW, recalling the Agreements concluded with Representative Trade Union Organizations on the basis of which, as of 1 January 2022, the base salary rate tables for all JSW employees increased by 10% and a one-off bonus was paid on 22 July 2022 to JSW employees. In addition, the JSW Management Board asked for clarification of the demand for an increase in the base salary rates to 16% (whether the demand was for an increase in the salary rates by another 16%, or an increase in rates by the difference between the demand and the increase made under the Agreement concluded on 28 January 2022).

In a letter dated 14 July 2022, ZOK WZZ “Sierpień 80” JSW specified that the demand was for a 16% increase in the base salary rates from 1 January 2022 on an annual basis, and requested the initiation of negotiations. During the meeting held on 25 July 2022, the Trade Union further clarified the demand, indicating that, taking into account the 10% increase in the base pay rates in accordance with the Agreement, this would be an adjustment to 16%, i.e. an increase in the average pay from January by an additional 6%. In addition, the Trade Union suggested resolving the demand by unifying the wage elements in the old and new employment contracts, such as: the 14th salary, the Miners' Day (“Barbórka”) bonus, severance pays and jubilee awards in all JSW plants.

On 22 August 2022, another meeting devoted to the demands of ZOK WZZ “Sierpień 80” JSW was held, during which the Trade Union was presented with calculations of the costs incurred by JSW in 2022 on the provision of salary benefits in accordance with the Agreement signed on 28 January 2022. In addition, the Trade Union was presented with the costs of implementing the increase in salaries by an additional 6% from January 2022, as well as of implementing the increase in the supportive meal amount up to PLN 50, and reminded that the Agreement of 28 January 2022 between the JSW Management Board and JSW's Representative Trade Union Organizations exhausted the claims on wage increases in 2022 from the moment of its signing. The Trade Union again put forward a proposal to equalize the wage elements in the old and new employment contracts in all JSW plants. The Trade Union was informed that the equalization of the above elements was an encroachment on the labor law rules set by the Company-level Collective Bargaining Agreement, which should be negotiated with the participation of JSW's Representative Trade Union Organizations that were parties to the Company-level Collective Bargaining Agreement.

On 3 October 2022, another meeting was held on the collective dispute initiated on 4 July 2022 by ZOZ WZZ “Sierpień 80” JSW. During the meeting, the Employer presented the position of the JSW Management Board to the Trade Union, informing them that, in accordance with the Agreement signed on 28 January 2022, the claims on wage increases in 2022 had been exhausted. The Employer, having regard to the demands of the Trade Union, was to request JSW's Representative Trade Union Organizations to initiate talks on the introduction of changes, if any, among others, to unify salaries and employee benefits. The Trade Union, in connection with the position of the JSW Management Board, suspended the collective dispute for the time being, awaiting the start of the talks on the postulated demands.

The demand of the Company Trade Union Organizations operating at JSW, i.e. Trade Union “Jedność” at KWK Budryk, Trade Union “Jedność” of the JSW S.A. Group, Trade Union “Jedność” of the Employees of JSW and SRK, Trade Union “Jedność” of the Employees of JSW KWK Knurów-Szczygłowice, Trade Union “Jedność” of the Employees of JSW KKW Pniówek, Trade Union “Jedność” of the Employees of the JSW Zofiówka Section, Trade Union “Jedność” of the Employees of the JSW Borynia Section, Trade Union “Jedność” of the Employees of the JSW Knurów Section, and Trade Union “POPIS w Pracy”.

In a letter dated 20 July 2022, the above-mentioned Company Trade Union Organizations operating at JSW submitted the following demands to the JSW Management Board: to raise the base salary rates of JSW employees by PLN 19.70 (equivalent to 16% of the ninth base salary rate), to raise the amount of supportive meals from PLN 30 to PLN 50 per day worked, to introduce permanent procedures allowing all JSW employees to make retail purchases of coal for their own needs on preferential terms, and informed them that if the above-mentioned demands were not met within 14 days, the letter was to be treated as the initiation of a collective dispute.

On 8 September 2022, a meeting was held to address the demand of JSW's Company Trade Union Organizations for the introduction of permanent procedures to allow all JSW employees to make retail purchases of coal for their own needs on preferential terms. A representative of the Commercial Division presented the Trade Unions with the procedure in force at KWK Budryk for the sale of steam coal, as well as provided up-to-date information related to the collection of coal. He recalled that JSW's business profile was directed towards the production and sale of coking coal, but due to the difficult situation in the steam coal market, the JSW Management Board decided to support retail customers and to start production of coal in the Nut coal range. In addition, he explained that given the small supply capacity for producing this type of coal, JSW was unable to meet the needs of all employees in this regard. In view of the above, JSW Management Board, taking into account both the limited supply capacity and JSW's image considerations, did not decide to introduce preferential coal sales to its own employees. The Trade Unions, taking into account the arguments presented by the Employer, specified that it did not expect the Management Board to interfere with the current queuing system, but proposed the introduction of sales outside the current queue, i.e. to launch sales at a separate time, e.g. on weekends or in a 3rd shift. The Trade Unions therefore maintained their demand in this regard, expecting that the JSW Management Board, as a matter of goodwill, would take a step in the direction of the employees and launch sales outside the current queue, e.g. on Saturdays-Sundays under the banner of “Energy Security for Employees.”

On 22 September 2022, during a meeting, the JSW Management Board informed the Trade Unions that it did not see the possibility of increasing the salaries of JSW employees in 2022, since, according to the provisions of the Agreement of 28 January 2022, the claims for employee benefits and salary increases in 2022 had been exhausted. However, in the case of the demand for the introduction of permanent procedures allowing all JSW employees to make retail purchases of coal for their own needs on preferential terms, given the small supply capacity for the production of this type of coal, JSW was unable to meet the needs of all employees in this regard. The Trade Unions continued to maintain their position on the demands of 20 July 2022, and asked for a meeting to be scheduled on 27 October 2022, to sign a discrepancy report.

On 27 October 2022, another meeting was held, during which the JSW Management Board presented its final position regarding the collective dispute initiated on 20 July 2022, noting that it was not in a position to meet the Trade Unions' demands and saw no need for further mediation on the issue in question, as well as stating that in the event of signing a discrepancy report and appointing a mediator for further proceedings, the total cost of the mediator's remuneration would be borne by the Trade Unions. The Trade Unions, on the other hand, were of the opinion that the costs of the mediation proceedings should be borne in accordance with Article 11¹ sec. 4 of the Act on resolution of collective disputes of 23 May 1991. In the absence of agreement between the parties regarding the demands laid down in the letter of 20 July 2022, a discrepancy report was signed on 27 October 2022, and on 2 November 2022, the Trade Unions, in a letter addressed to the JSW Management Board, advised that it had appointed a mediator – Mr. Grzegorz Matusiak, MP, for further proceedings in the collective dispute.

On 21 December 2022, an Agreement on the rules for determining the value of the supportive meals provided for in the OHS regulations and of other meals for JSW employees was entered into between the JSW Management Board and JSW's Representative Trade Union Organizations. Accordingly, the value of meals will be determined on the basis of the minimum wage set by the Council of Ministers and will constitute 1.5% of the amount of this wage. The Agreement has been in force since 1 January 2023 and applies to all JSW employees.

On 29 December 2022, the first mediation meeting relating to the collective dispute was held with the participation of the Mediator, Mr. Grzegorz Matusiak. During the meeting, the Trade Unions withdrew the demand to increase the supportive meal amount from PLN 30 to PLN 50 per day worked, because the Agreement signed on 21 December 2022 addressed this issue, as well as from the demand to introduce permanent procedures allowing all JSW employees to make retail purchases of coal for their own needs on preferential terms, as coal was being sold on an on-going basis at KWK Budryk based on the list of those wishing to purchase it.

The Trade Unions submitted a modified demand to raise employee base salary rates by 25%, referring to the high inflation rate and high revenues from the sale of coal in connection with the high coal price to support it. In addition, the Mediator requested that JSW Management Board representatives participate in the next mediation meeting. The next mediation meeting was held after the final date of the reporting period, on 9 January 2023. During the meeting, the Parties to the collective dispute presented their positions with regard to the demand concerning an increase in employee base salary rates by 25%. The date of the next meeting will be set once the Supervisory Board has issued its opinion on the Technical and Economic Plan of JSW for 2023.

On 23 February 2023, during a meeting, the Trade Unions withdrew their demands concerning an increase in base salary rates by 25% in 2023 in connection with the conclusion, on 8 February 2023, of the Agreement between the JSW Management Board and JSW's Representative Trade Union Organizations, i.e. ZOK NSZZ “Solidarność” JSW, ZZ “Kadra” Pracowników JSW and Federacja ZZG JSW. In view of the above, a memorandum ending the collective dispute initiated on 20 February 2022 was signed to document the mediation conducted.

Demand submitted by JSW's Representative Trade Union Organizations after the final date of the reporting period, i.e. on 3 January 2023, to raise salaries in 2023 by introducing new tables of base salary (job-related) rates from 1 January 2023.

On 12 December 2022, the Trade Unions presented the demand to increase salaries in 2023 by 25%. In its letter of 13 December 2022, the JSW Management Board informed the Trade Unions that the requested 25% increase in salaries in 2023 could not be put into effect. After the final date of the reporting period, i.e. on 3 January 2023, JSW's Representative Trade Union Organizations submitted a letter to the JSW Management Board demanding that salaries be raised in 2023 by introducing new tables of base salary (job-related) rates from 1 January 2023.

In reply, in its letter of 5 January 2023, the Management Board informed the Trade Unions that it sustained its position stated in the letter of 13 December 2022 and that the situation relating to the impact of consumer prices on the level of real wages at JSW would be monitored as part of the payroll policy in place. A salary raise to compensate for the adverse impact of inflation will be put into effect in consultation with JSW's Representative Trade Union Organizations provided that the Company's economic and financial situation allows it.

During a meeting held on 12 January 2023, the Trade Unions presented its position on the demand to raise salaries in 2023. In view of the divergent positions of the parties, the Trade Unions requested that a discrepancy report be signed and proposed Mr. Wojciech Piech as the Mediator for further proceedings in the collective dispute.

Mediation meetings were held on subsequent days with the participation the Mediator, Mr. Wojciech Piech, and on 8 February 2023, the parties to the dispute signed an Agreement in the Mediator's presence under which: the salary fund will increase by 15.4% compared to the salary fund for 2022, additionally taking into account the effects of the agreements concluded in previous years. The increase will be put into effect by implementing new base salary rate tables starting from 1 January 2023 and will apply to all JSW employees. The Agreement concluded on 8 February 2023 ends the collective dispute concerning a 25% increase in the base salary rates in 2023. The remuneration fund for 2023 will not exceed the specified value (i.e. 15.4% compared to the salary fund for 2022). After H1 2023, the Parties to the agreement will review the Company's production and economic situation and the Company's results will be assessed, which will the basis for implementing the set salary fund.

MATERIAL DISPUTES INITIATED BY THE SOCIAL PARTNER AND RELATIONS WITH SOCIAL PARTNERS IN OTHER GROUP COMPANIES IN 2022