Prosecution Possibilities for Discrimination Under Cayman’s Labour Act

Since the 1980s employers in the Cayman Islands have understood that they might face repercussions for unfairly dismissing an employee, but as a result of a recent charge brought before the Summary Court of the Cayman Islands, employers now face the prospect of being prosecuted for discriminating against their employees or potential employees. HSM Partner Alastair David delves into this topic.

It is understood that the recent charge filed in the Summary Court is pursuant to, a little used section in the Labour Act (2021 Revision), that is Section 80 of the Labour Act (2022 Revision), which states:

(1) No person (whether an employer or an employee) shall discriminate with respect to any person’s hire, promotion, dismissal, tenure, wages, hours or other conditions of employment, by reason of race, colour, creed, sex, pregnancy or any reason connected with pregnancy, age, mental or physical disability (provided their ability to perform the job is not impaired), political belief or the exercise of any rights under this or any other Law.

(2) Subsection (1) shall not be construed as prohibiting the taking of any personnel action genuinely related to an employee’s ability to discharge the duties of the employment in question.

(3) A person who contravenes subsection (1), commits an offence and is liable on summary conviction to a fine of five thousand dollars and to imprisonment for twelve months.

While Section 80 of the Act has been in existence, in a similar form, since at least 1987, it is not known whether or not this section has ever been relied upon by the Department of Labour and Pension (“DLP”) or the Director of Public Prosecution (“DPP”) to bring a prosecution. Certainly, in recent memory, it is not believed to have ever been relied upon.

What is unusual about Section 80 of the Act is that a criminal sanction applies to what is normally a civil matter, i.e. dealt with in a Employment / Labour Tribunal. While it is the case that individuals can bring a claim in the Gender Equality Tribunal, who are claiming that they have been discriminated on the basis of their sex, gender, marital status or pregnancy, those people who believe that they have been discriminated against on the basis of their:

• Race,
• Colour,
• Creed,
• Political belief,
• Age or
• Physical or mental disability

Have in the past felt that they had no recourse in Law. It now appears that the DLP, with the support of the DPP, will certainly entertain a potential prosecution if the facts support one.

What is also interesting, and potentially concerning for employers is that Section 80 (1) of the Act does not appear to be limited to direct discrimination, i.e. an employer not employing an individual because they are a women, but also other types of discrimination. As Section 80 (1) uses the wording “any reason connected with …” it is possible to interpret the Act to include other forms of discrimination, i.e. indirect discrimination, discrimination arising from a disability, etc. If that is the case, then employers in the Cayman Islands should be extra careful in dealing with individuals with protected characteristics to avoid ending up before the Summary Court of the Cayman Islands.

Section 80 (2) of the Act does provide some comfort for employers, in that they can successfully defend a prosecution if can show that their actions were genuinely related to the ability of the person to carry out the role. Whilst that may offer some crumb of comfort to the employers, it is suggested that all decisions employers make are thoroughly documented, so as to show a proper paper trial in regard to their actions.

What is also currently not clear is how the burden and standard of proof apply with respect to the Defence as set out in Section 80 (2) of the Act. Employment practitioners from the UK will be familiar with the reversable burden of proof in the Equality Act 2010, which when a Claimant has established facts which could amount to a contravention of the Act, the employer will have to explain the alleged treatment and show that there was no discrimination. However, that reversible burden is set out in the Act itself and it is suspected that the Defence as contained in Section 80 (2) of the Act will be more akin to self defence, i.e. when the Defence raise the issue, it will be for the Prosecution to disprove the defence.

It will be interesting to see if further prosecutions are instigated by the DLP and their outcome. In the meantime Employers should be aware of the risk of prosecution.