Report: minimum wage needed

The Cayman Islands should establish a national minimum wage, reduce the standard work week from 45 to 40 hours, and require all overtime to be paid at overtime rates.

Those are some of the recommendations made in a study by Caribbean labour and management consultant Samuel J. Goolsarran, which was commissioned by the Ministry of Employment earlier this year. The report also reviewed the Department of Employment Relations and recommended an organisational overhaul, including the appointment of a labour magistrate or commissioner to hear cases involving workplace disputes.

Mr. Goolsarran did not recommend a specific rate for the minimum wage, but he urged the formation of a national minimum wage advisory council to study the matter. His study gave examples of minimum wages in the Caribbean such as US$5 an hour in Turks and Caicos and US$4 an hour in the British Virgin Islands.

There are documented cases of certain workers in the Cayman Islands being paid as little as $2.90 an hour.

‘Every effort must be made to avoid the perceptions of ‘importing and sustaining poverty’ by maintaining depressed wages in a first world country,’ the consultant report stated.

Employment Minister Alden McLaughlin is a strong supporter of the minimum wage, but he did not want to venture an estimate of what that rate should be.

‘It would be too dangerous,’ Mr. McLaughlin said, adding that the minimum wage advisory board would consult heavily with stakeholders, particularly in the hospitality industry, before taking any proposal to government.

The report also called for an end to the process whereby workers can ask to be paid overtime rates at straight time wages, a provision that has been in the law for decades. The Labour Tribunal must approve those arrangements.

‘This is a peculiar and unusual provision actively used, and consumes a lot of the time and resources of the Department of Employment Relations and Labour Tribunal and defeats the purpose of the overtime provision in law,’ Mr. Goolsarran wrote.

Mr. McLaughlin has previously said that he is aware of workers, mainly expatriates here on work permits, being forced to sign ‘voluntary’ waivers of overtime wages as a precondition of their employment.

‘This whole issue about people working overtime on the basis of a waiver must go away,’ he said.

Although Mr. Goolsarran recommended reducing the standard work week by five hours, Mr. McLaughlin did not state whether his ministry would support that. He acknowledged that reducing the work week and forcing employers to pay overtime at time and a half rates would increase costs to businesses.

Another change recommended in the report was the extension of severance pay. Under current Labour Law, an employee gets one week of severance pay for each year they’ve worked at a job up to a maximum of 12 weeks. The report said that severance pay should be without limit, so if someone works at a position 35 years and is laid off, they should get 35 weeks severance.

‘We have many instances of people, long-term employees who’ve worked 20-plus years, who wind up, when they’re made redundant or laid off, only getting 12 weeks of severance pay,’ Mr. McLaughlin said.

Reorganisation

Mr. Goolsarran’s review recommended the Department of Employment Relations be divided up into four units; policy and labour relations, employment services and training, a labour inspectorate and labour and market statistics.

It recommended that the Labour Tribunal be physically removed from department headquarters, and that the tribunal hire a full time chairperson and a legally qualified deputy chair with its own staff. The idea is to make the tribunal an independent, quasi-judicial body, separate from the Department of Employment Relations.

Mr. McLaughlin supported the proposed changes and said they would make the Labour Tribunal more efficient and create a greater perception of fairness in labour disputes.

Mr. Goolsarran pointed out that the Cayman Islands has no conciliation or mediation procedure in place to deal with disputes between companies and groups of workers such as collective bargaining agreements, largely due to the absence of trade or labour unions. He said the Labour Tribunal generally deals with only individual worker disputes.

Other recommended changes included the approval of work permits by the chief immigration officer, rather than by the Work Permit Board. It also suggested better communication between the Department of Employment Relations and the Immigration Department to help identify skilled nationals who are available for jobs. The government has recently announced plans to implement those changes.

The report said business staffing plans should be placed under the remit of the Department of Employment Relations and that the small business responsibility of the department should be shifted to the Cayman Islands Investment Bureau.

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