Redundancy First Among Equals

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Redundancy is a term that rarely has positive connotations. Making the right decisions ahead of any redundancy selection process can save time and money. 

In the Cayman Islands, the Labour Law provides that a redundancy is potentially a fair reason for dismissal. However, the Law also requires that the employer acts reasonably in all of the circumstances.

Where an employer is considering one or a number of redundancies, the Law requires employers to discriminate positively in favour of Caymanians. The Law provides that a redundancy will be unfair where, for example, there are two employees in the redundancy pool, both performing similar types of work, and the employee dismissed is the Caymanian. In this example, the employer should choose the non-Caymanian for redundancy before the Caymanian, the spouse of a Caymanian or a permanent resident.

The same immigration rules in relation to the order in which employees must be employed, i.e. preferential treatment for Caymanians, also applies to redundancies.

If an employer intends to downsize, he or she must seriously consider the pool of employees from which the redundancies are to be selected. If the employer selects a Caymanian for redundancy where there are other options available in that job description, it is likely that a Court or Tribunal will find that employee wrongly and/or unfairly dismissed.

Such an error can be a costly mistake as it can have adverse implications for bonus payments and restrictive covenants, where relevant, not to mention compensation for unfair dismissal.
It is recommended to seek the advice of a lawyer before commencing the process to ensure that you are meeting the requirements of the law.  

For more information about the legal implications related to redundancies or other immigration issues, please contact:

Nick Joseph, Partner
T: 814 2005
E: [email protected]

Shaun Cockle, Associate
T: 814 2754
E: [email protected]