Management Board Report on the activity of the JSW S.A. for 2012

4.5. Headcount and compensation

Headcount

The Company’s headcount and average headcount are depicted in the table below.

	Headcount as at		Average headcount during the year
	31 Dec 2012	31 Dec 2011	2012	2011
Blue-collar employees	18.067	18.461	18.267	18.291
White collar employees	4.611	4.47	4.558	4.414
Total	22.678	22.931	22.825	22.705

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As at 31 December 2012 JSW S.A. employed 22 678 persons. During the 2012, the headcount decreased by 253 persons. In the period from January to December 2012, 1,228 employees left the Company, of which 1,143 persons left on account of natural causes (including 1,018 persons who retired), while 975 persons were hired. Out of this group, 801 work underground and 174 on the surface.

The average headcount was 22 825 persons, which signifies a growth of 120 persons compared to 2011. The structure of headcount with the split between underground and surface functions was maintained at a ratio of 80% - 20%.

Compensation

	2012	2011	Growth
Total average monthly pay in JSW S.A. in PLN (net of profit sharing bonus)	7,914.36	7,505.39	105.4%
Total	7,914.36	7,505.39	105.4%

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The rules of compensation for the Company’s employees are defined in the company’s collective bargaining agreements or compensation rules and regulations and in the new employment contracts applied to all the employees hired after 15 February 2012. The Company’s collective bargaining agreements were terminated on 1 September 2009. Until a new consolidated collective bargaining agreement is worked out for the Company’s employees, the hitherto collective bargaining agreements which are no longer effective are still being applied. The rules and regulations for compensating employees employed in the Management Board Office of JSW S.A. is applied in the Company’s Management Board Office.

According to the clauses being applied from the terminated collective bargaining agreements, the Company’s employees have the right to receive compensation consisting of a base salary rate, a bonus or a piecework surplus, the Miner’s Charter (seniority-related allowance), a functional allowance (e.g. a wall-face allowance), an allowance for work in burdensome 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 an employee. Hiring employees for the appropriate jobs and awarding a category of rank are done on the basis of the Job Valuator. Notwithstanding these components of compensation, employees have the right to the following perks:

• annual bonus on Miner’s Day,
• Miner’s festival equivalent,
• additional annual bonus referred to as the 14th salary,
• free coal allowance,
• jubilee awards
• retirement and disability severance pay,
• cash equivalent for refunding the costs of vacation travel (referred to as the Ticket under the Miner’s Charter),
• equivalent to purchase scholastic aids.

Under the new employment contracts, employees are entitled to compensation comprised of basic salary and years-of-service allowance. The level of compensation depends on the type of work performed and the working time. Notwithstanding these components of compensation, employees with the new contracts have the right to the following perks:

• annual bonus on Miner’s Day,
• additional annual bonus referred to as the 14th salary,
• free coal allowance,
• retirement and disability severance pay.

An employee may be awarded a bonus for improving the occupational health and safety situation, an incentive bonus and a task bonus. The Company’s employees may also have the right to a profit sharing bonus. The rules concerning the rights to this bonus and its allocation have been laid down in the rules and regulations for allocating the profit sharing bonus. In 2012 the gross average monthly bonus in the Company was PLN 7,914.36 and it was 5.4% higher than the average salary in 2011 (PLN 7,505.39). The following factors contributed to the actual payroll growth in 2012:

• implementation of the incentive bonus, effective from 1 March 2012,
• implementation of the task bonus, effective from 1 April 2012,
• additional payments resulting from the motion of the National Labor Inspection,
• fulfillment of the agreement concluded on 8 November 2012 between the Management Board of JSW S.A. and the Inter-Union Protest and Strike Committee at JSW S.A., by the power of which a one-time bonus was paid to Company employees and new basic salary rate tables were introduced as of 1 November 2012, which were 3.4% higher than the previous ones.

In 2009 the law changed as a result of which starting from 2010 there is no need to agree with the trade unions the average payroll growth ratio (see Journal of Laws of 2009, No. 219, Item 1707).