Restructuring case fuels debate on relocation

In June 2007, euroscript was informed by its main client that it had lost a major part of its contract to a competitor based in France. As a result, the company’s management announced that 120 employees were to be made redundant. The trade unions signed the redundancy scheme but condemned what they called a ‘policy of relocation’. It appears that the French competitor has contacted euroscript’s Polish branch regarding fulfilment of the contract.

On 22 June 2007, euroscript – a division of the content management company euroscript International – learnt that it had lost a significant part of the service contract with its main client, the Office for Official Publications of the European Communities (Publications Office). The Publications Office had decided to award the contract for the next five years to a French company instead. The latter had made a more competitive offer by submitting a quotation 40% below that of euroscript for the same services.

Established in 1987, euroscript specialises in pre-press activities, including editing and the translation of documents. It has branches in some of the new Member States, including the Czech Republic, Hungary, Lithuania, Poland and Romania.

Job losses spark debate on relocation

As a result of having lost much of its contract with the EU Publications Office, euroscript has made 120 employees redundant out of a total workforce of 289 people. The company’s management immediately informed the Ministry of Labour and Employment (Ministère du Travail et de l’Emploi) about the redundancies; the latter initially suggested that, for 70 euroscript employees at least, the operation could be classified as a ‘transfer of undertakings’ if these employees transferred to the French company.

The Luxembourg Confederation of Independent Trade Unions (Onofhängege Gewerschaftsbond Lëtzebuerg, OGB-L), which defends the employees’ interests, doubted that a company based in Paris would take on the Luxembourg personnel to do the work when the price it quoted was in effect half of that of the Luxembourg company. In addition, OGB-L brought up the possibility that euroscript Luxembourg may not want the contract and that such service contracts would move to eastern European countries where the company has subsidiaries. The trade union confederation claimed that a director of euroscript had stated that the French company to which the contract was awarded had contacted euroscript Polska Sp. for the execution of the work in question.

Although the Luxembourg company has been able to hold on to the translation part of the service contract, which represents the largest part in terms of volume and value, this has only been possible by means of granting large financial discounts. For this reason, the company’s management argued that a further 50 jobs in translation would be lost in addition to the initial 70 redundancies.

Maintaining Luxembourg’s competitiveness

euroscript International, which is present in 12 countries and three continents, built its success on globalisation, while also having become dependent on the global market. In the current economic climate, the allocation of service contracts remains volatile in Europe. Many Luxembourg-based multinationals carry out their administrative functions in eastern European countries, where labour costs are less important. This move eastwards of companies has reopened the debate on the factors determining Luxembourg’s competitiveness. Experts are wondering whether the high concentration of qualified workers really creates a high level of added value, or whether reducing the cost of labour would also reduce the risk of job losses.

Focus on retraining and reintegration of redundant workers

OGB-L for its part deplores the policy of relocation which lies behind such decisions to move the execution of work to eastern European countries. It is calling on the government and the business community to make every effort to guarantee and retain as many jobs as possible in the Grand Duchy of Luxembourg. The trade union confederation believes that this is in the interest of the country’s economy and that it is vital to ensure that workers can remain in employment. OGB-L has launched an appeal to all the parties concerned to explore every possible way of mitigating the consequences of these redundancies, by means of support measures aimed at the immediate redeployment of the redundant workers and their reintegration into the labour market.

Odette Wlodarski, Prevent

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