LIME has already engaged in similar outsourcing agreements with Ericsson in other countries, and such arrangements are common in the industry.
While it is unfortunate the transition may affect people’s livelihoods, Cayman has robust immigration and work permit laws predicated on the assumption that properly qualified Caymanians get first consideration on job opportunities. Surely the 37 Caymanians now working for LIME would have a competitive edge on other applicants for Ericsson or, for that matter, for any positions requiring experience and skills they have obtained and can readily demonstrate.
On the heels of LIME’s announcement, a news release from the Office of the Premier followed swiftly, threatening to revoke Ericsson’s business license if it doesn’t hire “our people,” in the words of Infrastructure Minister Kurt Tibbetts, who was joined in the proclamation by Employment Minister Tara Rivers and Premier Alden McLaughlin.
The implications of the Government response go to the fundamentals of doing business on these islands. For decades, there has been an uneasy peace between government and private industry over giving priority and preference to “qualified Caymanians,” and ancillary issues such as training and retention.
Over the years, immigration policy (and particularly the issuance of work permits) has been influenced, if not driven, by the need to place Caymanians in the private sector. The disastrous and divisive “rollover policy” is an indirect expression of this broader objective.
However, many companies, including LIME, née Cable & Wireless, have exemplary records of hiring, training, and promoting Caymanians into senior positions. In fact, the workforce at LIME is 90 percent Caymanian.
One of the consequences of hiring nearly all Caymanians, of course, is that when a company downsizes for whatever reason — advances in technology, economic pressures, rising costs, or workplace efficiencies, for example — it will be Caymanians who will be affected.
It is one thing to give preference to Caymanians when hiring; it is quite another to treat Caymanians as a protected class, with, de facto, the expectation of a job for life.
In large measure, that’s what government does with its civil service, authorities and companies. There is never any reduction in the size of the workforce, regardless of cost, performance, productivity or need.
The private sector cannot operate that way.
It is unclear from the government press release how it would react to the following scenario:
Ericsson, in its arrangement with LIME, determines that it does not need 39 employees to provide its services. It requires only 20. The math is straightforward, if unpleasant: 19 employees, nearly all of them Caymanians, are going to lose their jobs.
In anything other than a state-run economy (think Cuba), no government can force private industry to maintain artificially inflated payrolls.
Perhaps Minister Marco Archer, a well-credentialed and well-respected economist, can explain to his colleagues in government what happens when government burdens a business with unsustainable costs.
The company goes out of business — and ALL of the employees lose their jobs.