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Lubelski Węgiel
Lubelski Węgiel Bogdanka S.A.

Position of the management board of LW Bogdanka concerning the collective dispute

Tuesday, 2014-10-21

Bogdanka, 21 October 2014

 


POSITION OF THE MANAGEMENT BOARD OF LW BOGDANKA CONCERNING THE COLLECTIVE DISPUTE.

 

Lubelski Węgiel BOGDANKA S.A. hereby informs you that a collective dispute has arisen in participation of all trade unions operating at the Company. The dispute began due to a discrepancy of the parties’ positions regarding the amounts of increases in salaries in 2014.

Given that the coal industry in Poland is in a difficult situation and taking into account the market perspectives for power coal, and bearing in mind the Company's further growth and its economic indicators, the Management Board of LW Bogdanka S.A. is of the opinion that the demands of the trade unions are excessively high and cannot be accepted.

The Parties are to pursue further negotiations with the assistance of a mediator.

Please find below the position of the Management Board of our Company as regards this matter:

Dear Sir/Madam,

Today the Management Board of Lubelski Węgiel Bogdanka S.A. announced that a collective dispute had arisen with all the trade unions operating at the Company. The dispute is due to differences between the parties as regards the level of salary increase in 2014.

The discussions and negotiations to date, which were held in accordance with the provisions of the Act on Solving Collective Disputes, have not led to an agreement.
We find it difficult to agree upon the salary increase proposed by the unions. Neither the production nor the economic targets set at the beginning of 2014 will be met this year. The salary budget is the most important fixed component of costs. Determining its size so that all stakeholders in Bogdanka are at least partially satisfied is a very difficult and responsible task.

We should also bear in mind that this year the real value of our salaries has been increasing, as Poland has been experiencing deflation for the last several months. We are, however, aware of the expectations of our employees. There are a number of factors that have a significant impact on our position on salaries. Undoubtedly, the most important of these is the drop in coal prices on world markets, which has been taking place for quite some time now. The situation of other Polish mines and the steps they take to sell their coal also raise our concerns about the level of coal prices on the Polish market in the near future.

Moreover, we have not seen any significant effects of the attempts to limit imports. The proposed changes to the law as regards control and monitoring of solid fuels can further lead to a reduction in coal sales to individual customers. When analyzing the possibility of increasing salaries, we also have in mind the internal situation of our Company, which has changed. This year, we have repeatedly experienced mining and geological problems in the walls. Coal yield and effectiveness of production are all falling. We hope that the difficulties are temporary, and that we can remedy them very soon due to the commitment of our staff.

The Management Board recognizes the need to ensure fair working conditions and salaries for our employees, which should reflect both their workload and the current financial capabilities of the Company.

This does not mean that we will not continue talks with the trade unions. Given the differences of opinion, they will be held with the aid of a mediator – which is not the first such case in the past few years – and we hope that, like previously, they will lead to an agreement to the satisfaction of all parties to the dispute. Above all, we are relying on the sense of responsibility of our partners in the talks. The development of our mine and its economic security are of importance to all our stakeholders, and to our employees they are a guarantee of jobs in the future.

Management Board
of Lubelski Węgiel Bogdanka S.A.

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