JSOC Bashneft has concluded a new Collective Agreement with its employees for 2013–2015. The document has been signed by the Company’s President Alexander Korsik representing the employer and by the chairman of the United Employee Representative Body Ildar Sadykov representing the employees.

The collective agreement governs the relationship between the employees and the employer as part of a social partnership, mutual responsibility of the parties, and stipulates that the Company’s employees should be provided with additional benefits and guarantees apart from those stipulated in the existing legislation and other statutory regulations.

The need for concluding a new Collective Agreement was related to the fact that after five of Bashneft’s subsidiaries (OJSC Ufaneftekhim, OJSC Ufimsky refinery plant, OJSC Novoil, OJSC Bashkirnefteprodukt and OJSC Orenburgnefteprodukt) were merged with JSOC Bashneft on October 1, 2012 and were given the status of the Company’s branches, their Collective Agreements became invalid.

The new single agreement confirms all obligations of the parties stipulated in the Collective Agreement of JSOC Bashneft for 2011–2013, as well as the key provisions of the collective agreements of the consolidated subsidiaries concerning labour relations, employment protection, working hours and leisure time, work discipline, health, safety and environment, social benefits and guarantees.

Furthermore, the new Collective Agreement stipulates a bigger benefits package aimed at improving the quality of life of the employees and their families. This includes increasing one-time payments related to marriage and the birth of a child, granting special paid leaves to expectant and single mothers, determining the amount of financial assistance in a number of events and circumstances. Besides, the new Collective Agreement stipulates that the Company’s Council of Veterans should be provided with premises, office equipment, communications and transport.

NOTE:

For the purposes of collective bargaining and preparing a new agreement in compliance with the principles of social partnership, the Company’s employees have created the United Employee Representative Body. It includes both the representatives of the Employee Council, and the chairman of the primary trade union organization of Bashneft-Bashkirnefteprodukt (a branch of JSOC Bashneft) who has confirmed his authority.

The Employee Council is the main representative body of Bashneft’s employees. It was established in November 2010. On October 30, 2012 the delegates of all of the Company’s divisions held a conference and elected a new membership of the Employee Council taking into account the changes in the structure of Bashneft and the number of its employees after the Company’s reorganization.

The preparation of the Collective Agreement involved studying similar agreements of the largest Russian oil and gas companies and taking into account labour market overviews prepared by the leading consulting firms.