Human Resources management
HR Policy of KGHM Polska Miedź S.A.
An HR Policy has been defined for the Parent Company, which underscores that the Employees of KGHM are its most valuable capital – it is they who create the unique corporate culture and build the Company’s market position. In order to secure the achievement of its strategic objectives, the Company has for many years consistently invested in the labor market and actively influenced the process of young people’s education. The Company acts with due diligence towards its employees, since it is they who play a key role in the development of all areas of the business model, build the global standing of the enterprise and makes us an integrated organization open to the future. KGHM recruits the best experts and specialists. As a result of these actions the Company employs people with the greatest potential, who really correspond to the Company’s needs. The work of each of those persons is equally important to the success of the entire organization.
The uniqueness of the pursued HR policy is attested by the fact that KGHM’s employees are people who not only are talented and highly qualified, but also act in conformity with KGHM’s values, are open to changes, seek innovative solutions, and are willing to share their knowledge and experience. Most importantly, however, KGHM’s employees, regardless of their job titles, see their personal development as a challenge which contributes to the benefits achieved by the entire organization.
The development of KGHM has also driven changes in human capital management inside the Company. Recently, the implementation of the HR policy has been modified. A consistent set of key processes and tools have been implemented to support the long-term development of competencies, new solutions have been prepared for employee performance and assessment management, internal communication has been improved, and focus has been made on modern project, program and portfolio management systems. In view of this swift development, it has become a priority to identify the best employees efficiently, and then systemically prepare them to assume key roles and functions in all business operations.
In 2018, the employees were provided with:
- the possibility to pursue educational programs to develop professional, managerial and specialist competencies,
- implementation of the performance management process for managers and development of an employee assessment system,
- improved IT tools to support recruitment of the best people.
KGHM as a global Company gives a unique opportunity to persons who want to gain access to state-of-the-art technologies and equipment. They can do so by participating in the work of specialist project teams. Working in such a team is also a perfect opportunity to share knowledge and experience within the Company.
Human Resources management
International Mobility Policy
As a result of the acquisition of international assets, since 2015 KGHM has conducted an employee mobility program. In view of the international operations of the Group, a policy of international mobility has been adopted as the basis for action in conformity with the due diligence procedure. The delegation of employees to companies in Chile, Canada and the US represents an investment of major significance for the Group. They not only satisfy the local requirement for personnel, but also develop the employee’s professional potential. In 2018, four employees were delegated to new international postings, in the areas of IT, geology and production process support. On the other hand, in 2018 ten employees continued in their international postings started earlier. Based on previous challenges and experiences related to employee mobility, an interdisciplinary team has been developing an update of the policy, focusing on achieving greater efficiency of the process.
Human Resources management
The KGHM Group does not have in place a common Training Policy. In view of the international scope of activities, cultural differences and specific characteristics of the industries in which the Group operates, each Company conducts a series of activities related to employee training. Nevertheless, a Training Policy has been formulated for the Parent Company.
The purpose of development activities in KGHM in 2018 was to retain and improve human capital and manage the Company’s intellectual capital, taking into account the Company’s mission and Strategy as well as long-term development plans through:
- Securing fulfillment of the requirements defined in regulations by the employees’ participation in periodic training courses on occupational health and safety, courses and examinations entitling to take up jobs in underground mines which require specialist actions as well as other jobs in the company.
- Improving employees’ competencies by organization of training courses and other development activities, with particular focus on linguistic, managerial and interpersonal skills, as well as training on business process orientation in management.
- Improving the qualifications of the Company’s employees and changing their education structure by continuing to co-fund graduate and post-graduate studies.
The Company’s employees may improve their qualifications in the context of expected organizational and technological changes by participating in training courses, conferences, studies and post-graduate studies. The employer ensures a high level of training among others by aligning the contents of the training courses with the business goals.
When planning our activities, we focus on ensuring that they fit in the best possible way with the implementation of the Company’s strategic priorities.
Systemic competence development activities are performed by a centralized unit specialized in this area. Development needs are established regularly and constitute the basis for building a training plan and calculation of the resources needed for its performance. These actions are performed on the basis of the procedures existing in the Company and registered for purposes of internal and external accounting. Both the competence development activity and utilization of the allocated budget are regularly monitored and the results are reported. In 2018 the number of employees participating in a single training event was 27,756, of which 19,330 in blue-collar jobs and 8,426 in white-collar jobs. In 2018, 776 employees took part in industry symposia and conferences in Poland and abroad in order to become acquainted with new technological and organizational solutions, as well as exchange experiences with regard to performance, improvement of production efficiency, human capital management and innovativeness. The Company’s employees participated in cyclically organized conferences such as: “Winter School of Rock Mass Mechanics” and “School of Underground Mining” or the “Economic Forum” in Krynica Zdrój.
In 2018, 88 persons benefited from co-funding of their studies. The co-funding comprised graduate, post-graduate and MBA studies. The Company also continued cooperation with the largest Polish universities in opening faculties aligned with the specific needs of KGHM. 379 of the Company’s employees benefited from language courses in 2018. The purpose of the courses was to prepare the personnel of KGHM Polska Miedź S.A. to use general and business English and Spanish. Enhancing language skills is an important element of implementation of the cooperation and exchange plan for the Polish and international companies within the KGHM Group.
Human Resources management
The KGHM Group does not have in place a shared Diversity Policy in written form. In view of the international scope of activities, cultural differences and specific natures of the Group’s industries, each company has been performing a number of organized actions in the area of respect for diversity. In view of the above, the independent Diversity Declaration has been defined at KGHM Polska Miedź S.A.
The Company complies with the prohibitions of discrimination and take actions in order to ensure respect of diversity in the workplace. The Company establishes an organizational culture which is based on mutual respect, equal treatment, access to development opportunities and optimal use of employee talent regardless of, among others, ethnic origin, age, gender, nationality, citizenship, religion, political beliefs or trade union membership. It aims at ensuring reasonable diversity both in the selection of personnel (including in the recruitment process), with special focus on knowledge, technical competence and social skills. The Parent Company guarantees the implementation of the diversity principle across the KGHM Polska Miedź S.A. Group, and promotes and popularizes these values among its stakeholders and business partners. Further information on our approach to diversity in the supervisory bodies is presented in Appendix 1, Statement on Corporate Governance to the Management Board report on the Activities of KGHM Polska Miedź S.A. and the KGHM Polska Miedź S.A. Group in 2018.
Human Resources management
Declaration on human rights protection
The KGHM Polska Miedź S.A. Group does not have in place a shared Human Rights Protection Policy. In view of the international scope of activities, cultural differences and specific natures of the Group’s industries, each company has been taking a number of actions to protect human rights. Given that, the independent Declaration of Human Rights Protection has been defined at KGHM Polska Miedź S.A.
KGHM Polska Miedź S.A. declares that it will recognize, respect and promote human rights wherever it conducts its business. The Company does not tolerate any violations of human rights. It undertakes to conduct its business in compliance with the Universal Declaration of Human Rights of the United Nations and with other norms and standards, including legislation and implementing regulations of the target countries of its business activity.
KGHM Polska Miedź S.A. is a global organization, aware of the importance of respect for human rights in the modern world. The Company accepts responsibility for protection and respect for fundamental human rights and implements such standards across the KGHM Polska Miedź S.A. Group. It also assumes that respect for human rights by other entities is a vital element of mutual relationships.
In compliance with the adopted principles, each employee and collaborator of the KGHM Polska Miedź S.A. Group is responsible for ensuring that in his/her closest environment human rights are respected, and any infringements are reported according to the agreed procedure.
This Declaration is the basis of our approach to human rights. It supplements and consolidates the human rights issues contemplated in other policies and guidelines of the Company, such as the Code of Ethics, the Diversity Declaration, HR and the Responsible Supply Chain Policy.
The Declaration is implemented in the following manner:
Infringements are reported as follows:
Human Resources management
HR Projects in KGHM Polska Miedź S.A.
Competent in the sector
In 2018, KGHM Polska Miedź S.A. commenced cooperation with schools in the powiats (counties) of Legnica, Lubin, Głogów and Bolesławiec under the project „Competent in the mining-metallurgical sector. KGHM – a key partner in professional education”. The project is being advanced under the patronage of the Ministry of National Education and comprises 57 sector classes involved in educating among others future staff of KGHM.
The actions undertaken by the project are: shaping educational programs, expanding the scope and form of vocational education in actual workplace environments, acquiring certification by students, professional consulting and motivating students and raising the qualifications of teachers.
As a result of introducing this program, vocational training is being adapted to the needs of the workplace, and in particular to those of KGHM Polska Miedź S.A.
On 5 July 2018, KGHM Polska Miedź S.A., Katowicka Specjalna Strefa Ekonomiczna S.A. (the Katowice Special Economic Zone) and the County (Powiat) of Głogów signed a letter of intent declaring cooperation in the organisation and operation of a pilot Model Program for vocational education in the profession Metallurgical Technician, developed under the project “PO WER KSZTAŁCENIE DUALNE – DOBRY START W ZAWODACH BRANŻY GÓRNICZO – HUTNICZEJ”.
The objective of the project is to develop a model program for vocational education in the profession Metallurgical Technician. This is being achieved in cooperation with the school Zespół Szkół im. Jana Wyżykowskiego in Głogów and with the Głogów Center for Professional Education (Głogowskie Centrum Edukacji Zawodowej) in Głogów. Completion of the project is planned in December 2019.
KGHM Polska Miedź S.A. is strengthening its global position by expanding its business and social contacts. In every location where the Company operates it endeavours to be a responsible investor committed to sustainable growth and the local community.
On 11 December in Chile, the Polish investor signed a declaration of educational and technical cooperation with the University of La Serena. KGHM Polska Miedź S.A. intends to introduce a scholarship program for students from this University. At the same time this will be a means of honouring the memory of the famous Pole, Ignacy Domeyko. This Polish geologist, mineralogist, mining engineer and explorer of South America, including in particular Chile, played an enormous role in reforming the educational system in Chile and in advancing the science of mining.
Work is underway on expanding the functionality of the eRekrutacja (eRecruitment) system by three modules: Applications for Probationary period employment (Staże), Applications for Internships (Praktyki), Providing materials for the preparation of graduate theses in KGHM Polska Miedź S.A..
As a result of the team’s work, a business concept was developed aimed at creating the eKariera IT system for cooperation between the coordinators of KGHM Polska Miedź S.A. and interested external parties: pupils, students and educational institutions. Work on implementing these solutions will last until August 2019.
Employee Pension Program
To meet market trends and give wider opportunities to employees, in 2018. the Employee Pension Program functioning in KGHM since 2003 has been modified. After detailed financial and market analyzes, two new investment funds have been added and the recommended deposit model has been changed.
HR Projects in KGHM Group
In 2018, an Employee Pension Program was introduced in the Group’s companies in Poland, which is one of the elements in advancing the social policy under the strategy of KGHM Polska Miedź S.A. and, apart from other typical tools of HR policy, is an important element in motivating and integrating employees with the company. The Employee Pension Program was instituted in the Parent Entity in 2003. It is one of the oldest and largest such programs in Poland, in which the investment funds (to which the contributions are transferred) are managed by TFI PZU S.A.
In 2018, each of the companies advanced its own HR projects. These involved areas such as: raising skills, improving productivity and management efficiency. To address problems associated with acquiring employees, cooperation was instituted with vocational schools and schools of higher learning.
In addition, in 2018 actions were undertaken with respect to global projects introduced in prior years, comprising all of the Group’s domestic companies, including recruitment principles utilising the e-Rekrutacje system.
Human Resources management
KGHM Polska Miedź S.A.
Employment in KGHM Polska Miedź S.A. at the end of 2018 amounted to 18 503 people, and was 0.8% higher than at the end of the prior year. Average annual employment in KGHM Polska Miedź S.A. amounted to 18 331 people and was higher than the level of employment in 2017 by 133 people. The change in employment was due to natural movements in staff.
Average employment in KGHM Polska Miedź S.A.
|Mines||12 433||12 413||+0.2|
|Metallurgical plants||3 600||3 529||+2.0|
|Other divisions||2 298||2 256||+1.9|
|KGHM Polska Miedź S.A.||18 331||18 198||+0.7|
In 2018, the companies of the Group employed 34 386 people, or an increase by 1.3% as compared to the prior year. The employment structure is shown in the following table and chart:
Average employment in the Group
|KGHM Polska Miedź S.A.||18 331||18 198||+0.7|
|KGHM INTERNATIONAL LTD.||2 037||1 695||+20.2|
|Sierra Gorda S.C.M.1||790||748||+5.6|
|Group companies in Poland||13 228||13 294||(0.5)|
|Total||34 386||33 935||+1.3|
1 Sierra Gorda S.C.M. – employment proportional to share in the company (55%)
Employment structure in the Capital Group in 2018
1Sierra Gorda S.C.M. – employment proportional to share in the company (55%)
Companies in Poland
In 2018, average employment in the companies of the KGHM Polska Miedź S.A. Group in Poland decreased as compared to 2017 by 66 positions (or by 0.5%). This change was mainly in respect of blue-collar positions and was due to difficulties in securing properly-qualified workers, as well as to adapting employment to current needs.
The increase in employment in companies within the KGHM INTERNATIONAL LTD. Group in 2018 was due to the involvement of companies acting under the DMC brand in new projects in the United Kingdom (Yorkshire county) and Canada (the Sudbury Basin), development of the activities of the Franke mine in Chile and expansion of the scope of services offered by KGHM Chile SpA to the Sierra Gorda project.
The increase in employment in Sierra Gorda in 2018 was mainly due to the need to increase employment in the maintenance and conservation areas of the processing plant and mine, as well as in technical services. This was related to improving the efficiency and productivity of the processing plant and mine, as well as with advancement of the Debottlenecking Program, the goal of which is to optimise utilisation of the existing infrastructure of Sierra Gorda and at the same time to increase the processing capacity and productivity of the processing plant.
Human Resources management
Relations with the trade unions
In KGHM Polska Miedź S.A. there are 15 trade unions acting on a company-wide basis and 44 acting on a divisional basis. 88% of the Company’s employees belong to a trade union. Dialogue with the unions is carried out both at the Company level as well as by the Divisions of KGHM Polska Miedź S.A. In addition, the Collective Labour Agreement for the Employees of KGHM Polska Miedź S.A. provides for consultations to be held by the employer with the trade unions twice a year. Dialogue with the trade unions is carried out with respect for the parties’ individual rights and based on mutual cooperation.
|In 2018, the following major events with respect to relations with the trade unions took place in KGHM Polska Miedź S.A.:|
|5 February 2018||Additional Protocol No. 22 to the CLA was signed. With effect from 1 January 2018, it introduces an increase in basic wages by 6.1%.|
|28 June 2018||An additional agreement to the Collective Labour Agreement (CLA) for the Employees of KGHM Polska Miedź S.A. was signed regarding the date of payment of the annual bonus for 2017.|
|22 January 2019||Additional Protocol No. 23 to the CLA for the Employees of KGHM Polska Miedź S.A. was signed. It introduces the following, with force from 1 January 2019:|
In 2018, the domestic companies of the Group engaged in negotiations with the trade unions regarding questions of remuneration, employment conditions and social matters. In most cases they concluded with the signing of additional protocols to the Collective Labour Agreements and other agreements.
In entities engaged in therapeutic and spa activities, agreements were concluded involving assuring higher basic wages for employees, pursuant to the „act dated 8 June 2017 on setting the lowest basic wage of employees practicing medicine employed in healthcare entities”.
In 2018, collective disputes were initiated in two of the Group’s companies, which were short in duration and, after less than a month, were concluded with the signing of agreements.
INOVA Spółka z o.o. – in February 2018 one (of the two trade unions active in this company) initiated a collective dispute, in which the main demands were centered around wages. Following negotiations, in March 2018 an agreement was reached which ended the dispute.
PeBeKa S.A. – from 10 January 2018 to 15 February 2018 the company was in a collective dispute with one of the trade unions active in this company. During the procedural process the parties commenced negotiations, which concluded with the signing of a protocol of dispute. In the meantime the company commenced talks involving wage issues with all of the trade unions active in the company. As a result of these talks, the parties agreed a common position which also comprised the demands at the center of the dispute. In February 2018, based on the Agreement reached, the subject of the dispute was ended, while in December 2018 the trade union issued new demands. During the subsequent negotiations the parties presented their positions. Discussions in this regard will be continued in 2019.
In May 2018, as the result of the signing of an agreement with the trade union, the collective dispute in the company PMT Linie Kolejowe 2 Sp. z o.o., which began in 2017 and involved wage demands, was ended.
Human Resources management
Occupational health and safety
The life and health of employees and workplace safety in general is the chief priority in the hierarchy of values of the KGHM Polska Miedź S.A. Group. The Company applies high OHS standards, both towards its own employees as well as towards those providing services on the grounds of KGHM Polska Miedź S.A. Each of the Company’s Divisions has implemented a safety management system which is compliant with standards in force. All work stations have identified threats. The Company has assessed occupational risks and updates them continually. Working environments are continually monitored and periodic reviews and potential threat assessments are conducted, as well as reviews of equipment and required technical checks and approvals. Employees undergo systematic training and continually enhance their qualifications.
In 2018, the Company recorded a decrease in the total number of workplace accidents (as defined by the act on social insurance due to workplace accidents and occupational illnesses), with a year-on-year decrease from 300 to 297 injured. Most of the registered workplace accidents (98.7%) involved light injuries, with the main causes being in order: contact (striking) with or by moveable/ immoveable objects, loss of balance by employees, rock falls and injuries related to using workplace tools.
Natural hazards associated with the underground mining of copper ore deposits, in particular hazards related to mining tremors and their potential effects in the form of roof and wall collapses are considered as particularly important from the safety point of view, as their occurrence can lead to serious or even fatal injuries as well as damage to underground machinery, equipment and infrastructure, along with production downtimes. KGHM Polska Miedź S.A. carries out a variety of preventive actions in its mines involving the intentional provoking of roof collapses and rock falls, comprising systematic seismological observations, on-going assessment of the rock mass and the marking off of areas of particular threat of roof collapse. The size, shape and number of chambers and inter-chamber pillars is selected, as well as the most advantageous direction of mine work advance and the optimum order of ore selection to minimise local concentrations of stress in the rock mass. So-called active methods of preventing uncontrolled roof collapses and rock falls are also applied, based on provoking dynamic events through mass blasting of mining faces and through blasting to release stress in the orebody or its roof. The Company is continually improving in terms of the safe mining of the copper ore deposit. In 2018, the Company registered a total of 18 workplace accidents in its mines qualified as light injuries, caused by the threat inherent in the rock mass. These incidents represented 7.6% of all workplace accidents in the mines during this period. KGHM Polska Miedź S.A. is continuously improving its safety record in the mining of the copper ore deposit.
The ratio LTIFRKGHM (Lost Time Injury Frequency Rate KGHM) in 2018, or the total number of workplace accidents (as defined by the act on social insurance due to workplace accidents and occupational illnesses) in the Company, being the number of accidents per million hours worked for the entire core business of KGHM Polska Miedź S.A., decreased by 1.1 % as compared to 2017, and amounted to 10.3 (2017 = 10.4) and at the same time was lower by 45% than the amount recorded in 2010.
LTIFRKGHM in the Parent Entity
In KGHM INTERNATIONAL LTD., in accordance with the adopted obligations, the Occupational Health and Safety Management System is consistently implemented, based on a systematic approach to the identification, assessment, elimination and/or control of hazards and risks related to advancing and continuously improving the organisational culture of Zero Harm, which at the same time represents one of the company’s values. This system comprises all of the companies which are fully owned by KGHM INTERNATIONAL LTD. or in which KGHM INTERNATIONAL LTD. is a managing partner, and at the same time reflects the cultural and legal differences of activities of individual entities. In North America the Zero Harm policy encompasses employees, contractors and local communities. It is a process of continuous prevention and improvement in counteracting threats to occupational health and safety, as well as to environmental protection. In 2018, in the mines and projects supervised by KGHM INTERNATIONAL LTD. in Canada and the United States of America, a total of 51 workplace accidents were registered, while the TRIR ratio amounted to 2.90.
In Chile, KGHM Polska Miedź S.A. conducts mining operations in two entities, which have separate systems of OHS management adapted to legal requirements and to mining conditions in this country. These systems encompass both the employees in these entities as well as sub-contractors, and are aimed at achieving the long-term vision „Zero harm”. In KGHM Chile SpA, which oversees the Franke mine, and which also engages in its own exploration and other activities, two workplace accidents were recorded in 2018, with a TRIR ratio of 0.22. In the joint venture company Sierra Gorda S.C.M., 16 workplace accidents were recorded in 2018, with a TRIR ratio of 0.38.
In 2018 in the entities in which KGHM Polska Miedź S.A. conducts mining operations in Canada, the United States and Chile, a total of 69 workplace accidents were recorded. The consolidated TRIR ratio (Total Recordable Incident Rate) for these operations reached 1.0. This was 0.2 higher as compared to 2017 and at the same time 68% lower than the level recorded in 2010.
TRIR1 ratio in KGHM INTERNATIONAL LTD.
1TRIR (Total Recordable Incident Rate) calculated using accepted methodology as the number of accidents at work meeting the conditions of registration as defined in the ICMM (International Council on Mining & Metals) standard, in total for the employees of KGHM INTERNATIONAL LTD., KGHM Chile SpA and Sierra Gorda SCM and sub-contractors for these entities, per 200 000 worked hours.
OHS golden rules
Occupational Safety Council of KGHM Polska Miedź S.A.
The Parent Company’s employees are represented in the Occupational Safety Council whose functioning is based on the principles of mutual trust and cooperation. The Council is the opinion-making and advisory authority with respect to matters of occupational safety and health. It consists of 40 persons, including representatives of the employers (Divisions), representatives of the trade unions operating in the Company and the Company Voluntary Labor Inspectors in KGHM Polska Miedź S.A.’s Divisions.
The responsibilities of the Occupational Safety Council include among others periodic assessment of occupational safety and health in the Company, submitting opinions on preventive actions and formulating conclusions with respect to improvement of the working conditions.
At each facility of KGHM Polska Miedź S.A., the representatives of the employer, employees and medical services who are members of the Company Committees for Occupational Safety and Health perform periodic reviews of the working conditions, assess occupational safety and health and draw conclusions with respect to improvement of the Divisional working conditions. Since 2016, the current occupational safety issues have been discussed at each meeting of the Supervisory Board of KGHM Polska Miedź S.A. In 2017 and 2018, the occupational safety and health issues were analyzed many times and in various modes. An ongoing assessment of occupational safety in the Company is made at weekly meetings of the Vice President of the Management Board responsible for Production and at monthly meetings of the Management Board with the management of all the Divisions.
Zero Harm Policy of KGHM Polska Miedź S.A.
Risk management, including the principle of prudence, is an essential element of our business. KGHM strives for minimization of any threats to its employees, local communities and the environment (Zero Harm Policy). The best facilities are those with the highest level of safety.
Employees of the copper ore mines of KGHM Polska Miedź S.A. work in difficult conditions and are exposed to a great number of various hazards. Natural hazards connected with underground mining of copper ore deposits are among the most important threats to life and health of employees of KGHM Polska Miedź S.A. Specifically, the threats connected with tremors of rock masses and their potential impact in the form of bursts and falls are considered to be very important in terms of safety as they may lead to serious or fatal accidents, damages to machinery, equipment, and underground infrastructure, as well as exploitation downtimes. Since employee safety is our priority, the KGHM Polska Miedź S.A. Group has been taking a number of preventive and protective measures. Regular seismic observations are conducted in the mining companies based on a well-developed network of underground and surface-based seismic monitoring stations, encompassing all the regions and mining areas. The Company has implemented an integrated model of occupational safety and health management. The following entities are involved in it:
- the Company Occupational Safety and Health service;
- the Mine-Smelter Emergency Rescue Unit of proven world-class excellence,
- Miedziowe Centrum Zdrowia S.A., an entity providing specialized medical services;
- a research and development unit, KGHM Cuprum Sp. z o.o. CBR;
- CBR and an accredited laboratory of Centrum Badań Jakości Sp. z o.o.;
- an entity specialized in rescue services equipped with its own medical facilities.
Human Resources management
KGHM Polska Miedź S.A. adheres to work regulations which define the organization and order in the labor process, as well as the related rights and duties of the employer and the employees. The regulations define the manner and rules of accounting for working time and granting of holidays, as well as the time and manner of remuneration payment. They define rules of occupational health and safety. Moreover, the work regulations describe the practice with regard to rewards and distinctions, as well as penalties for breaches of work order and discipline.
Human Resources management
Company collective bargaining agreement (CCBA)
The CCBA specifies the conditions to be met by the employment relationship, in particular: working hours, recreational and additional leave, remuneration rules, protection of working conditions, benefits associated with employment and rules of their assignment and provision, benefits for former employees, old-age and disability pensioners and members of their families, mutual obligations of the parties to the Agreement.