Lionbridge: globalizing low wages

In December 2007, a trade-union called “Krajowa Federacja Pracownikow (KFP)” (Worker’s Federation) was formed in Lionbridge Poland, a subsidiary of Lionbridge Technologies, a US-based multinational with subsidiaries all over the world. Lionbridge specializes in translations and adapting products to local markets (so called “globalization services”).

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Lionbridge: globalizing low wages

In December 2007, a trade-union called “Krajowa Federacja Pracowników (KFP)” (Worker’s Federation) was formed in Lionbridge Poland, a subsidiary of Lionbridge Technologies, a US-based multinational with subsidiaries all over the world. Lionbridge specializes in translations and adapting products to local markets (so called “globalization services”).

Lionbridge is one of many US-based companies which move jobs from the US to countries with lower wages and working standards. Among the countries where workplaces are most often moved to are China, India, but also places like Poland, Romania, etc… Polish workers of the services and IT sector have had a very poor record of unionization during the recent years of capitalist transformation. The union effort undertaken by KFP is in a large part a step into uncharted territories.

Lionbridge currently employs 300 workers in Poland and plans to increase employment at a high rate. The company has publicly stated that it expects the Polish state to provide tax incentives in order to increase the profitability of the business in Poland. In 2007, the revenues of the company reached 8 million USD.

In 2003., Lionbridge acquired Mentorix, another US-based company which employed 700 workers. Since then, the number of workers has been increased to over a thousand workers. One of the clauses of the acquisition contract stipulated that “Mentorix is not and has never been a party to or bound by any union contract, collective bargaining agreement or similar contract. There has never been any lockout, strike, slowdown, work stoppage, labor dispute or union organizing activity, or any similar activity or dispute, affecting Mentorix or any of their employees. None of the employees of Mentorix are "workmen" as defined in Section 2(s) of the Industrial Disputes Act, 1947, of India and no notice or other consultation with any trade union in India is required as to any employee of Mentorix in India as a result of the Merger and the other transactions contemplated hereby.”

The Indian Industrial Disputes Act doesn’t provide any protection and any trade-union rights to workers who are defined as “non-workmen”. These may include workers whose duties may include coordination or elements of management, as in the case of Project Managers. The “management” authority of Project Managers is not really different from that of any other worker, but the employers can claim that this kind of workers are not entitled to protection of their labor rights. In 2004, the Indian Supreme Court has held that an Industrial Tribunal cannot adjudicate on the service conditions of employees who are "non-workmen" under the Industrial Disputes Act.

The company’s globalization practices influence not only workers employed in the company, but also the working conditions of freelancers, such as translators. Lionbridge has gained power on the market due to mergers and acquisitions. In 2006, the company has been awarded the 2.5 million USD contract for legal interpretation by the Court Service in Ireland. According to the Irish Translators' & Interpreters' Association, the rates for interpretation have fallen dramatically. As Mary Phelan of ITIA writes, “The Courts Service pays Lionbridge €46 per hour. In turn, Lionbridge pays either €25 or €20 or €17.50 to the interpreters. We have even heard reports of €15 per hour. The rates vary depending on when the interpreters were recruited – those recruited more recently are paid less. The reduction in pay is an alarming development. Interpreters used to complain that the hourly rate never increased despite inflation. But they never expected reductions like these. The ITIA believes that Lionbridge favours the more recently recruited interpreters for interpreting assignments because they cost less.”