Core employment regulations

Work Regulations of Bank Polska Kasa Opieki Spółka Akcyjna (hereinafter: “Work Regulations”) set out the organization and structure of work at Bank Pekao as well as rights and obligations of the Bank and its employees. The Work Regulations apply to all employees of Bank Pekao S.A., regardless of the nature of their work, position or basis of employment relationship. In particular, the Work Regulations:

• precisely define basic obligations of employees and the Bank,
• describe the Bank’s work time systems and work start and end time,
• set out principles for recording work time, monthly working schedules for settlement periods,
• establish the rules for the use of remote work by employees (immediately after the introduction of universal regulations on remote work, the Bank will enter into discussions with trade union organizations to agree on amendments to the Work Regulations in this regard),
• regulate the issue of OHS training, medical examination to be undergone by employees, informing employees about work hazards, rules for the allocation of workwear and personal protective equipment.

The Bank informs employees of the amount of annual leave to which they are entitled in their employment contracts and, with regard to parental leave, this information is provided to employees on an ongoing basis in accordance with current common law.

The Bank applies notice periods arising from the Labor Code or employment contracts, provided that they are not less favorable than those arising from labor law. Consultation concerning the termination of employment contracts are conducted at the Bank in accordance with Polish legal regulations. In 2022, the Bank mostly used one- or three-month notice periods.

In line with applicable regulations, the Pekao Group and the Bank must prevent discrimination in the process of entering into and terminating employment contracts, terms of employment, promotion and access to training to improve professional qualifications, including in particular discrimination against gender, age, disability, race, religion, nationality, political opinions, membership to trade unions, ethnic origin, faith, sexual orientation and employment for an unlimited, or limited time or full-time or part-time employment.

The Collective Labor Agreement (hereinafter: “CA”) sets out terms and conditions of the Bank’s HR and remuneration policy, including remuneration for the Bank’s employees and principles for awarding other work-related benefits, in, inter alia:

• principles of the HR policy,
• working time,
• principles of the remuneration policy,
• principles for basic pay,
• bonus fund,
• incentive award fund,
• bonuses,
• pension and annuity severance fees,
• gratuities connected with termination of employment for reasons independent of employees.

The CA currently in force was concluded on December 15, 2005 between Bank Polska Kasa Opieki S.A. and company trade unions operating at the Bank. Amendments to the CA in the form of an Additional Protocol were concluded successively in 2007 and 2022. The amendment to the CA in 2022 concerned the agreement of new bonus rules for sales network employees in the Retail Banking Division. The protocol was registered by the State Labor Inspectorate on January 13, 2023. Thus, the said bonus rules became an integral part of the CA.

Bank Pekao does not use any additional pension schemes, apart from the universal ones. As an employer, the Bank fulfils all its obligations arising in relation to the universal pension scheme and is not in arrears with any contributions payable from employees’ remuneration and the employer’s contributions. On the basis of the CA, the Bank makes additional pension and retirement severance payments for employees entitled to such benefits under the universal pension and retirement insurance scheme.

In 2022 at Bank Pekao, similar to the previous 12 months, the percentage of employees covered by a collective labor agreement was at 77%. There are no collective labor agreements in Pekao Group companies.

In relation to employees excluded from the regulations of the CA, all provisions of the CA are applied with regard to remuneration and the granting of other work-related benefits, with the exception of bonus rules. Bonus rules for this group of employees derive directly from provisions of individual employment contracts (management contracts). The Bank plans to start negotiations with trade unions to include this group of employees in the CA.

The Bank, in the event of a decision to conduct collective layoffs, acts in accordance with the applicable provisions of generally applicable law and the Collective Labor Agreement. The Bank’s decision is communicated to all employees, as well as to trade union organizations. In accordance with the law, the Bank consults its intention to carry out group layoffs with trade unions in accordance with the Act of March 13, 2003 on special rules for termination of employment relations with employees for reasons not related to employees. The Bank seeks to ensure that consultations of its intention to carry out group layoffs with the trade unions are concluded with the conclusion of a group layoff agreement. The following, among other things, are established in the concluded agreement:

• the number of employees with whom the employment contract will be terminated,
• criteria for selecting employees for dismissal, whose employment contracts will be terminated and whose terms and conditions of employment will be changed,
• the terms of severance payments and additional benefits, e.g., extended medical care, social assistance rules,
• the scope of the program to help laid-off workers, including financial assistance to acquire new skills or professional training opportunities if they find work in another area.

Pursuant to the CA, in the event of termination of employment contracts for reasons not related to employees, employees are entitled to cash severance payments of three times the amount to which they are entitled under generally applicable laws. The amount of severance pay may not exceed 36 times the minimum salary in effect on the date of termination of employment.

In addition, the Bank seeks to conclude an agreement with the Labor Office on labor activation of laid-off employees in each case.

In 2022, the Bank launched a Voluntary Redundancy Program (hereinafter: “VRP”). The employer established the VRP Regulations, communicating their provisions to employees. Employees volunteered for the VRP, and after the Bank accepted the application, the employee’s employment contract was terminated and the employee received the severance payment specified in the VRP Regulations.

The Bank’s social activities are organized in accordance with generally applicable laws and ensure the social security of its employees. The Regulations of the Company Social Benefits Fund set out the rules and conditions for the use of services and benefits financed from the Fund, as well as the rules for the allocation of the Fund’s resources for various purposes and types of social activities.

According to Polish legislation, the amount of the basic allowance per employee is 37.5% of the average monthly salary in the national economy in the previous year or in the second half of the previous year, if the average salary of that period was a higher amount. The Bank’s Company Social Benefits Fund is created from an annual basic allowance, in accordance with the provisions of the Collective Labor Agreement – per employee the allowance is 50% of the average monthly salary in the national economy in the previous year or in the second half of the previous year, if the average salary of that period was a higher amount. The Bank does not charge the deduction for pensioners or retirees, however, it does take care of them.

Bank Pekao’s social fund is earmarked for:

• subsidies for holiday leave of employees, children of employees under 17 years of age, as well as the Bank’s pensioners and retirees,
• subsidies for holiday leave of employees, children of employees under 17 years of age, as well as the Bank’s pensioners and retirees,
• housing loans,
• cultural, educational, sports, and recreational activities.

Most Pekao Group companies offer employees a variety of social benefits, including sports card and vacation leave subsidies, Christmas vouchers, financial support in difficult life situations, and a wide range of insurance. The companies, with few exceptions, provided the same access to benefits to all employees, regardless of the duration of employment.