We urge that the sitting government rethink, rewrite, or flat-out reject the current draft of the labor legislation that is currently being circulated for public input and comment.
In yesterday’s Compass, we included a 12-page special report on “Labor reform in Cayman” that provides an objective and comprehensive view of the labor issue, including analysis of the Labour Relations Bill, explanation of current law, historical background, and arguments both for and against the new legislation. We encourage everyone to read the report, in print or online at the Compass Data Desk.
Attorney James Bergstrom, making the arguments against the bill, made this overall observation:
“The Bill, as drafted, provides a much more punitive approach toward employers. It introduces a number of severe sanctions which are criminal in nature that are directed at individuals in the business.”
Some egregious examples included in the current draft legislation:
Every employer must enter into an employment contract within 10 days of hiring a new employee (including household domestics). Failure to do so makes the employer (the individual, not the business) liable for a $10,000 fine upon summary conviction.
The bill endows the director, deputy director, and labor inspectors with the same powers conferred upon a constable under the Police Law. These labor officials would be empowered to enter any workplace without notice at any time during working hours to ensure compliance with the law.
Extremely importantly, the new bill erodes the current provisions of the Labour Law as they relate to the standard probationary period for new employees. Currently, an employer can “take a chance” on a marginal employee, who well may be Caymanian, because if the relationship doesn’t work out, it can be ended without penalty. This is extremely beneficial to young people entering the workforce because it gives well-meaning employers an incentive to give them an opportunity.
The new legislation, in certain circumstances, would subject the employer during the probationary period to charges of “unfair dismissal” if he were to terminate a new employee. Again, in Mr. Bergstrom’s words: “Employers would need to become far more cautious in hiring any new staff and would not be willing to hire anyone except those with the requisite experience and qualifications. This would most likely impact young Caymanians the most.”
Some additional details and tidbits from the bill:
Severance pay for “fair dismissal” of an employee doubles from one week per each completed year of employment to two weeks. For “unfair dismissal,” the payment quadruples from one week per each completed year of employment to four weeks (up to a maximum of 48 weeks).
The proposed bill governs only the private sector. The public sector (meaning the civil service) is excluded from its onerous provisions.
We could go on and on, but since we are approaching our “bottom line” for this editorial, let us offer this:
Governments everywhere – not just in Cayman – seem to operate under the illusion that they can mandate and effectuate full private sector employment by passing laws.
Education, not punitive labor legislation, is the only sure path to meaningful long-term employment in these islands – and anywhere else.
P.S. For those who do not agree with us, we refer you to the arguments made in favor of the bill by local businessman George Ebanks in our special report. Mr. Ebanks put forth the best possible defense of what we still consider to be a critically flawed piece of legislation.