OREANDA-NEWS. February 04, 2013. DTEK and the Trade Union of the Coal Industry Employees (TUCIE) have set up a working group to deal with the social protection of miners. The decision was necessitated by the aggravating economic situation in the coal-mining sector of the country.

 DTEK’s executives and representatives of the central committee and the regional organizations of the trade union have held a regular meeting in Donetsk, where they discussed the challenges the coal-mining industry is now faced with. The meeting participants were particularly concerned about further delays in signing of the Energy Balance of Ukraine for 2013, growth of illegal coal mining, and arrears in payment for the consumed electricity. All those factors make it impossible to plan coal procurement for Ukraine’s TPPs, and jeopardize the promptness of settlements for consumed products, which might result in considerable losses for coal enterprises, and social unrest in the coal-mining regions.  

 The trade-unions are also closely observing the new governance model being implemented in DTEK. The company is transforming its three-tier governance model into the two-tier one, disbanding the managing bodies of the mine associations, and merging adjacent mines into mine groups, which results in transfers of employees. Maxim Timchenko, the CEO, acknowledged that some lapses were made during the implementation of the management reform and agreed that trade unions should be more involved in the reorganization.

 The parties also discussed outsourcing of non-core functions. According to DTEK’s CEO, due to lack of common approaches and clear controls, as well as poor forecasting of potential risks the idea of outsourcing was discredited. He emphasized that DTEK still adheres to the idea, but has changed its approach to the transfer of non-core functions. All outsourcing processes are based on the ‘one-window’ principle and DTEK Service, a specialized company in DTEK group, will be responsible for the entire process: starting from selection of service providers to controlling the observance of social guarantees for the employees transferred from DTEK companies. The trade union in its turn will participate in working out the list of the social benefits of the transferred employees when selecting an outsourcing company.

 The trade unions were also interested in the remuneration system used at DTEK’s enterprises, and specifically in the grading system introduced at DTEK Pavlogradugol and DTEK Mine Komsomolets Donbassa. Answering the questions, Mr Timchenko pointed out that the Company is continuously improving the labour remuneration system and is ready to revise the points at issue. Most of them concern the principles of assessing the performance of blue-collar workers. The parties agreed that the grading system does not contradict the industry agreement with regard to the minimal guarantees of labour remuneration, and currently the wages at DTEK’s enterprises are higher than those at the state-owned mines.  

 “We see that DTEK’s management is open to a dialogue and we will keep working together while adhering to the principles stipulated by the Sector Agreement and collective bargaining agreements of the companies,” says Viktor Turmanov, the Chairman of the Central Committee of TUCIE and People’s Deputy of Verkhovna Rada. “We have agreed on the points of principle, and the details will be addressed by the working group. We understand that both state and private mines face a critical situation, as there is a surplus of coal and the prices are plummeting. One of the causes is illegal coal mining: surplus in the market is about 5.5 million tonnes, and illegal small mines (kopankas) take over nearly 6 million tonnes of consumption. I am a member of a specialized Parliamentary Committee, and in the nearest future, my colleagues and I will lodge a deputy inquiry to the Government asking for solutions.”

 “DTEK has been always building its relations with trade unions as a dialogue with partners,” says DTEK Chief Operating Officer Yuriy Ryzhenkov. “Our company has been complying with all our privatization obligations, concession and lease terms, and sector agreement provisions. In 2012, DTEK raised wages at its coal companies by 16.2%, compared to 2011 (while at state-owned mines the pay rise was 8.5%). Over the last two years, the wages of DTEK’s miners increased by 33.6%.”

 “We have had an open, honest and constructive discussion”, says DTEK’s CEO Maxim Timchenko. “We have talked about the issues and concerns of employees at our coal companies. Social protection of the miners remains the key priority for us. We will spare no effort to make sure their work is in demand and well paid for. As the 2013 production and financial plan of the energy market of Ukraine has not been approved yet, we do not know how much fuel Ukrainian power plants will need. Plants are overstocked with coal. Furthermore, DTEK has been practically subsidizing Energorynok to an amount of about two billion hryvnias, as we receive payments for our electricity with a month’s delay, because of debts of large state-run consumers. Yet, we will continue providing social guarantees to our employees and deliver on our promises.” 

 A meeting of DTEK's management with the leaders of the Independent Trade Union of Miners of Ukraine is planned for the next week.