May 8, 2020 / 2:01 PM / 25 days ago

Polish coal producer to cut pay and hours by 20% in May

WARSAW (Reuters) - Trade unions at Poland’s biggest coal producer, state-run PGG, have agreed to the company reducing hours and pay by 20% in May, which would make PGG eligible for government help.

Poland generates most of its electricity from coal but demand for power has slumped due to the new coronavirus epidemic and more of it is being generated from cleaner sources.

PGG is also struggling with the rapid spread of coronavirus cases among its miners.

The group’s management and trade unions have been in talks for weeks, as unions rejected the company’s initial proposal to cut salaries and working hours by 20% for three months.

They eventually agreed for lower pay in May only and the deal also assumes that by June 20 management will present the unions with a plan of how it sees the group operating in the remaining part of this year.

PGG’s chief executive said in April the company was in deep crisis, while the unions called for state support.

Poland’s State Assets Ministry said it was determined to stabilize the situation in the sector, without giving details.

Shareholders in PGG include other state-run listed companies - PGNiG (PGN.WA), PGE (PGE.WA), Energa (ENGP.WA) and Enea (ENAE.WA).

Reporting by Wojciech Zurawski and Agnieszka Barteczko; editing by David Evans

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