For many years the KGHM Group has been consistently investing in the labor market and has positively impacted the educational of young people. We attract the best experts and specialists, and avail ourselves of the knowledge and competence of experienced employees. We all create the potential which enables sharing knowledge, creativity, enthusiasm and integrity, and at the same time complies with the Company’s values. Our work results in effectiveness, achievements, our market position, and broadly understood safety.

Good cooperation practices in the KGHM Group

  • Safety for the common good
  • Teamwork to increase knowledge
  • Accountability as an intentional commitment
  • Courage to combat weaknesses
  • Results-driven

We promote talent, high qualifications and behaviors which are consistent with our corporate values. We appreciate employees who courageously look to the future, are open to changes, seek innovative solutions, and share acquired knowledge and experience. Constant improvement of skills and organizational effectiveness considerably support the development strategy pursued by the KGHM Group.

Development of the staff

We strive to ensure an optimum working environment and invest in the continual professional development of our staff and good atmosphere at work. Under our Human Resources Management activities in 2016 we continued initiatives which allow the enhancement of competencies and result in the increased motivation of our staff. In particular, we focused on amending the mobility policy, as well as more effective recruitment and management-by-results processes.

In 2016, we provided our employees with:

Our priority is to enhance qualifications and change our staff’s educational structure (the program subsidizing academic and post-graduate studies was continued in 2016), we ensure periodic OHS training, courses and exams which ensure certification for work in specific positions, and we also organize other development-related activities, taking particular account of management and interpersonal skills, and training related to process management and Lean Management. Our employees can also improve their qualifications in the context of the anticipated organizational and technological changes; we provide training courses tailored to our business goals.

In recent years, we have implemented projects enabling the exchange of knowledge and experience among employees, and in 2016 we continued our Trainer Academy. The development-related activities are of an open nature, and provide for the systemic identification of training needs with regard to the work performed and identification of the development requirements of employees and the Company.

In 2016, more than 31,000 employees participated in training courses in the KGHM Group. Statistically, each of these employees spent more than 31 hours participating in various types of courses or professional training (see the table below for details).

GRI Indexes:

Average number of training hours during the year per employee by employment structure and gender.

 
Total number of training hours
2016
2015
Women
Men
Total
Women
Men
Total
Total number of training hours by gender
22,891
551,438
574,329
36,584
533,736
570,320
Number of employee
1,300
16,963
18,263
1,325
16,901
18,226
Average number of training hours by gender
17.61
32.51
31.45
27.61
31.58
31.29


Employment structure
Total number of training hours by employee category
Total number of employees by category
Average number of training hours by category
2016
2015
2016
2015
2016
2015
Management Board
160
400
5
5
32.00
80.00
Top executives
2,962
5,384
54
50
54.85
107,68
Management
42,723
51,744
998
944
42.81
54.81
White collar workers
97,926
135,448
3,690
3,742
26.54
36.17
Blue collar workers
430,558
377,448
13,516
13,485
31.86
27.99

The differences in the number of training hours in items 1–4 are the result of the organizational changes which took place in 2016. The increase in point 5 is due mainly to the new investment project which is pursued in the HMG Division—the launch of a flash furnace—and the need to train employees in respect of new technological solutions.

Source: KGHM

In 2016, we subsidized studies for 112 people. The subsidies were granted for academic-level, post-graduate and MBA studies. We continued our cooperation with the largest Polish academic centers to create curricula adapted to KGHM’s specific needs.

In 2016 we focused on adapting the development programs to legal requirements with regard to training, courses and exams due to changes in the geological and mining law and other legal regulations connected with the profile of our activities. In 2016, 681 employees participated in industry-related symposia and conferences organized in Poland and abroad, in order to become acquainted with the new technological and organizational solutions, as well as exchange experiences relating to effectiveness, improvement in production efficiency, human capital management and innovation.

In 2016, the unwaveringly popular language courses were attended by 686 of the Company’s employees. We organized English and Spanish general and business language courses. Reinforcement of language skills is an important element of the plan for cooperation and sharing solutions in the Polish and foreign companies which form the KGHM Group.

Additional development events in 2016

  • 83 people availed themselves of the program implemented in cooperation with the Economic University in Wrocław and completed post-graduate studies in Management Methods in 2016. The purpose of the studies was to provide the students with theoretical and practical knowledge in respect of implementing Lean Management and making changes in the organization.
  • 282 employees participated in training preparing them for the roles of auditor and integrated management system representative.
  • From September 2015 to June 2016, more than 700 employees participated in the program entitled “Leadership study – development of management competencies” which was aimed at aligning management competencies in the Company and making an evolutionary change in the predominating management style as a result of changes in our organizational structure.
  • The 3rd edition of our “Talent Mining” program took place and was addressed to the most talented university students and graduates. The people selected were employed in our plants.
  • 50 people participated in training courses concerning employer responsibility.
  • 165 people participated in training courses concerning cyber-safety.
  • We continued the International Mobility project to prepare our staff for tasks to be performed in our foreign facilities.
  • In October 2016, we completed our central project “System of results-based management and talents management” which will enable us to use a consistent, integrated solution for appraising employee competencies.
  • Members of the Group received a set of recommendations regarding recruitment principles. Moreover, we provided them with access to a common e-Rekrutacja (e-Recruitment) computer system.
  • At the 44th National Competition for Improving Working Conditions, KGHM Polska Miedź S.A. was recognized for solutions implemented in the area of health and safety at work. The jury rewarded a program for limiting the absorption of lead at the Głogów Copper Smelter, and for papers entitled “System ciągłego monitorowania zagrożenia siarkowodorem w kopalni Polkowice–Sieroszowice” (“Continuous hydrogen sulfide risk monitoring system at the Polkowice-Sieroszowice mine”) and “Korporacyjny Vortal Bezpieczeństwa Pracy w KGHM Polska Miedź S.A.” (“Corporate Work Safety Vortal at KGHM Polska Miedź S.A.”).
  • Plans prepared for 2017 included the launch of the “Leader Academy” development program which prepares people in key positions for implementing our Company strategy, for conducting activities which enhance effectiveness and the increasing access of employees to tools and development programs, creates a culture of openness to new knowledge and skills, as well as providing training courses which increase language competencies and teach employees to understand cultural differences and their impact on the daily business practices.
GRI Indexes:

In 2016, as in the previous year, there were no strikes or lockouts in the KGHM Group.

KGHM Polska Miedź S.A. is the most attractive employer in Poland—such was the verdict of participants in the Polish edition of the Randstad Award 2016. In the employer image ranking we were distinguished by our stable financial standing, security of employment and attractive wages and salaries, and employee benefits. Strong leadership was also appreciated, as well as an appropriate balance between private and professional life which is promoted in our firm.

We are proud of the mutual development of our long-term relationships with our employees. Employees leave work mainly due to retirement, and only a marginal number voluntarily leave the Company. KGHM Polska Miedź S.A. are often the sole employer throughout our staff’s professional career.

GOOD PRACTICES

Building our employees’ competencies is accompanied by care for their safety and an emphasis on preventive healthcare. In 2016, we carried out a Movember campaign – combining two English words: November and moustache – it was addressed to male members of staff to remind them that they must care for their health. Cheaper PSA-level tests were offered during the Copper Health Centre campaign.

We support our employees’ innovative ideas

Innovation is one of the KGHM Group’s competitive advantages. Work on innovative solutions is conducted at various levels of the enterprise, both by cooperating with third parties, and by appreciating the potential and creativity of our own staff. Employees best know the specific needs and can identify areas and solutions which can result in better effects and greater safety.

We believe that creating change and innovation should be the daily practice of each employee.

We are aware that KGHM’s success today depends on innovation, involvement and the teamwork of many thousands of employees who have varying knowledge and experience.

In this structure, the Innovation Zone, i.e. a tool for creating leaders who will have to cope with the challenges of effective management of the Company on an international arena, is of particular importance. The purpose of the program is to build a culture of innovation at KGHM. We effectively encourage our employees to look for technological solutions. Therefore, they are often the inventors who determine the Company’s innovative character.

For many years, we have actively involved our employees in the process of positive change in our firm. We organize campaigns which give them an opportunity to build new organizational models and implement technological innovations, such as “Lean Mining” – a campaign during which groups of employees worked together on making the production process in mines more effective, “Effectiveness Program” – a project which allowed us, thanks to the involvement of the staff, to reduce the costs of copper production.

The inventiveness program is an example of our long-term activities. This form encourages people employed at KGHM to enrich the firm’s knowledge, enabling them to submit proposals for facilitating enhancements. If the new concept is implemented, the author receives additional remuneration.

In 2016, the Company began implementing a new operating model for R&D and innovation activities within the KGHM Group. This will enable using the skills of KGHM Group entities operating in the field of research and innovation, optimizing the scopes of operations, using research infrastructure and regulating the issue of intellectual property.

GRI Indexes:

Relations with trade unions

There are 15 trade unions active in KGHM Polska Miedź S.A. which form 48 trade union organizations, and 88.6% of all employees are members of trade unions. The mutual rights and obligations of the employees and our Group, including primarily the remuneration conditions and other benefits connected with work at KGHM Polska Miedź S.A., are governed by a collective labor agreement.

Number of employees covered by the collective labor agreement (percentage of the total number of employees) at KGHM Polska Miedź S.A.

Total number of employees by:
Number of employees in 2016
Total number of employees covered by collective labor agreements
18,202
 Total number of employees
18,263
Percentage of employees covered by the collective labor agreement
99.70

Source: KGHM

In January 2016, an additional protocol was signed to the collective labor agreement which introduces changes to the principles for calculating annual bonuses paid out from the profit earned. The Protocol states that starting from 2015, the annual bonus will no longer be calculated based on the net profit, but on the positive financial result. In March 2016, under another protocol to the collective labor agreement, the Company’s social fund (ZFŚS) was increased by an additional contribution of 4.5%.

In 2016, the Group’s domestic and foreign companies engaged in negotiations with the trade unions regarding remuneration, employment conditions and social matters. In most cases they were conducted amicably and concluded with the signing of additional protocols to the Collective Labor Agreements and other Arrangements.

“MCZ” S.A. is party to four collective disputes in progress, announced in 2007, mainly involving the issue of wage increases. At present these disputes have been suspended, with the Company’s Management Board and trade unions basing their relations on annually concluded protocols of settlements or agreements reached.

Since March 2010, PeBeKa S.A. has been party to a collective dispute with the trade union Związek Zawodowy Pracowników Dołowych, which since 12 August 2010 has been suspended for an unspecified period.

In May 2016 a settlement with Union No. 2 trade union was signed at the Franke mine which will remain in force until mid-2019. In the Morrison mine, agreements with the trade union have been in force since 2014, and the cooperation between the trade union and the Company’s management is constructive and characterized by mutual understanding.

Wages and salaries, and benefits dedicated to employees

In 2016 employee wages and salaries were shaped, among other things, by an increase of PLN 74 in the base remuneration table, promotions and changes in positions held by category (22% of all employees) as well as a reduction in advances paid towards the additional annual bonus from 17.5% to 13.5% of the payroll.

In 2016, the average remuneration, excluding the annual bonus paid out of profit, amounted to PLN 8,456—a statistical increase of 3.4% compared with 2015. No employees at KGHM Polska Miedź S.A. receive remuneration at the minimum pay level (minimum wage).

GRI Indexes:

Employee remuneration at the lowest level by gender compared to minimum pay on the respective market in the Company’s main locations

Location: Poland
Minimum pay in the location (gross) 2016
1,850 PLN
Average employee remuneration at the lowest level women
3,887.76 PLN
Ratio of remuneration at the lowest level to the minimum pay women
2.10
Average employee remuneration at the lowest level men
3,443.91 PLN
Ratio of remuneration at the lowest level to the minimum pay men
1,86

Source: KGHM

Total average monthly remuneration (PLN)


2016
2015
Change (%)
KGHM Polska Miedź S.A.
9,731
9,617
+1.2%

Source: KGHM

According to the Central Statistical Office, the average remuneration in Poland in 2016 amounted to PLN 4,047.21. The level of wages and salaries at KGHM Polska Miedź S.A., which is more than twice as much, only confirms that we are a Company with immense potential both in terms of development and human capital.

GRI Indexes:

Additional benefits for employees of the KGHM Group comprise:

  • Financial benefits from the Company Social Funds
  • Contributions to the employee pension plan (PPE)
  • Medical program for employees and their spouses financed by the employer
  • Employee insurance
  • Co-financing employees’ commuting costs

KGHM Polska Miedź S.A. is also obliged to pay out specific post-employment benefits (one-off retirement benefits, death allowances, coal equivalent) and other long-term benefits (in the form of long-service benefits), in accordance with the Company’s Collective Labor Agreement.

In foreign companies which are members of the Group, the level of benefits varies depending on the country, but it always comprises mandatory insurance, including social and health insurance. Moreover, employees in Canada and the USA are, for example, provided with dental care and access to an Employee Family Assistance Program (EFAP) which provides advisory services on a broad range of matters—from psychological and legal assistance, through family matters, to health issues.

GRI Indexes:

Human capital at the KGHM Group

In 2016, Group companies employed 33,370 people which is a 0.7% decrease compared with 2015.

Average employment in the KGHM Group


2016
2015
Change (%)
White collar
10,062
10,285
-2.2%
Blue collar
23,308
23,313
-0.02%
Total
33,370
33,598
-0.7%

Employment structure by segments

* Sierra Gorda S.C.M. – number of employees in proportion to the stake in the Company (55%)

In 2016, the average employment in the domestic companies of the KGHM Polska Miedź S.A. Group increased by 139 FTE (i.e. by 1%) compared with 2015, due to an increase in blue collar positions. In the same period, the KGHM INTERNATIONAL LTD. Group companies recorded a decrease in average employment of 344 FTE (i.e. of 16%) compared with 2015, due to the implementation of actions aimed at reducing costs and adapting the size and structure of employment to the scope and schedule of work on projects pursued by KGHM INTERNATIONAL LTD.

All people affected by redundancy at KGHM INTERNATIONAL LTD. received full severance payments, higher than required under local legislation, as well as coaching in respect of developing their further career paths. We have not recorded any complaints connected with redundancy.

Achievements in respect of KGHM INTERNATIONAL LTD. human capital policy in 2016:
- Implementing new benefits and retirement plans
- Developing new HR rules and procedures
- Implementing an employee data management and reporting system

GRI Indexes:

KGHM Code of Ethics

The Code of Ethics of the KGHM Polska Miedź S.A. Group is the main tool in its corporate culture, which helps define priorities and establish principles that are binding for all employees in their day-to-day work.

The objective of the Code of Ethics is to ensure that the behavior of employees conforms to the highest standards based on the values which guide the KGHM Group’s employees: zero harm, teamwork, results-driven, accountability and courage.

Based on best practices in corporate governance, the following policies are in force, introducing global, uniform standards which have been adapted to the laws applicable in all the jurisdictions in which the KGHM Group operates:

Competition Law Policy in the KGHM Polska Miedź S.A. Group

The goal of the Competition Law Policy is to create a functional framework for a system that will enable the KGHM Group to maintain compliance with the competition laws applicable in all the countries in which the KGHM Group operates.

Anticorruption Policy in the KGHM Group

The Anticorruption Policy establishes basic principles and standards aimed at preventing any breaches of the anticorruption laws in the jurisdictions in which the KGHM Polska Miedź S.A. Group operates. The Group applies a zero tolerance policy towards corruption and bribery.

GRI Indexes:

In 2016, all our business units were subject to analysis regarding the risk of corruption. As in previous years, the Audit and Internal Control Department did not find any corruption practices in the Company.

Responsible Supply Chain Policy in the KGHM Group

The Responsible Supply Chain Policy is aimed at ensuring that only responsible suppliers are selected, especially in respect of acquiring so-called conflict minerals (gold, tin, wolfram and tantalum) and that the merchandise and services purchased by us are not used to finance terrorism, and are manufactured or provided in accordance with laws respecting basic human rights, working standards, environmental protection and counteracting corruption.

In 2016, the Company fully implemented its internal system for managing a responsible gold supply chain which comprises the Responsible Supply Chain Policy in the KGHM Group and the Audit Policy for the Responsible Chain of Supplies of Gold in the KGHM Polska Miedź S.A. Group. This system is subject to an independent, external audit to ensure compliance with the guidelines of the LBMA’s Responsible Gold Guidance as well as to obtain LBMA (London Bullion Market Association) certification.

Diversity Policy in the Group

In our activities, we strive to ensure reasonable diversity both in the selection of personnel for our bodies, and in the process of hiring employees. We recognize there are real benefits from ensuring diversity, in particular with respect to age, experience and gender criteria. Nevertheless, the core criterion in staff selection is always technical competence and social skills. The practical implementation of these premises enables us to ensure adequacy in the selection of personnel while fully respecting diversity, in particular with respect to the equal opportunity principle. In 2016, we formulated principles of diversity management, which will be officially adopted in 2017.

Point 5.3 of the KGHM Code of Ethics concerning diversity and tolerance

In KGHM, we create an environment and workplace free of discrimination, which enable employees to utilize their competencies and potential. We operate among various cultures and nationalities, which we take into account when planning shared work. Our diversity contributes to KGHM’s success and enables us to build our brand.

We do not tolerate any sign of discrimination.

Our Principles:

- We treat each other justly and with respect.

- We treat all our employees equally, irrespective of their race, nationality, religious beliefs, gender, age, sexual orientation, degree of (dis)ability or political views.

- Decisions concerning our employees are taken objectively, guided by our knowledge of their achievements, competence and their attitude.

- We report all cases of discrimination to our management.