We recognized that adding more boards and more employees was no longer the answer; real gains in efficiencies required real changes in processes.
—Leader of Government Business, the Hon. Kurt Tibbetts, JP.
Statement by Hon. Leader of Government Business
Thursday 27 November 2008
A new approach to the processing of work permit applications
In November 2007 I and my colleagues announced the next phase of our commitment toward improving efficiency in the way that migration is managed in our Islands. I am referring to a system where certain categories of work permit applications are decided upon administratively by Civil Servants in the Department of Immigration rather than by the Work Permit Board or the Business Staffing Plan Board. The necessary changes to the law to give effect to this important initiative passed through the Legislative Assembly last month and took effect on Monday of this week. Associated changes to the Immigration Regulations (2007 Revision) took effect on Tuesday.
I am delighted that this new system will very shortly be put into action. But before I talk about that it is worth remembering the reasons why it was necessary to introduce this radical new approach to processing work permit applications.
Background to policy change
In the past decade our Islands have experienced unprecedented growth and the associated need for foreign workers to meet the shortfall in Caymanian workers has placed a significant burden on the work permit system. The responsibility for the granting of annual work permits has always been vested in a Board comprising members appointed by the Cabinet (or Executive Council at the time). For many years this was the Caymanian Protection Board which then became the Immigration Board. These Boards were responsible for processing not just work permit applications but Permanent Residence and Caymanian Status applications also.
In 2004 the Immigration Board was divided into three separate Boards:
- the Work Permit Board;
- the Business Staffing Plan Board; and
- the Caymanian Status & Permanent Residency Board.
This reflected the huge growth in recent years in the number of applications being received in all three categories and the complexities of a much more modern and sophisticated society and labour market. The growth in work permit applications can be illustrated by the following statistics:
1994 - 6,400 work Permits in Force
2004 - 19,004 work Permits in Force
November 2008 - 26,121 work Permits in Force
Although these changes made a considerable difference, the numbers of work permit applications being received continued to increase at a pace with which the Work Permit Board and the Business Staffing Plan Board could not keep up without having to work unacceptably lengthy hours. In this regard we must remember that Board members are not employees of the Immigration Department but are private individuals who take time away from their professions and businesses to serve the community in this important function.
As a result, the Immigration Law was amended to increase the number of members on each of these boards so that they could split into sub-committees and hold additional meetings each week. Again, this was not a perfect solution. The 'processes' remained unchanged and efficiencies remained unacceptable. We recognized that adding more boards and more employees was no longer the answer; real gains in efficiencies required real changes in processes.
The new system
With that in mind the Governor-in-Cabinet instructed the Immigration Department to proceed with the development of a system where certain straightforward categories of work permit applications are processed administratively by Immigration Department personnel against a carefully chosen checklist of criteria rather than by a board. Research had shown that such a system operates effectively in the United Kingdom, New Zealand and Australia.
Earlier this year the Cabinet approved the proposals put forward by the Immigration Department and these have now been translated into the requisite legislative changes. This system will significantly reduce the number of work permit applications going before the Work Permit Board and Business Staffing Plan Board. As a result, backlogs on applications for annual work permits will not arise and the turnaround time on these applications will be greatly improved - a consequence that will no doubt be well-received by the business community. This will mean that the Boards will now be able to focus closely on difficult or sensitive applications and the critical issue of Key Employee designation.
I wish to emphasise though that the boards will retain decision making control of all applications where a Caymanian applied for the position; or where there is a signed complaint against a prospective employee on file; or where the Department of Employment Relations identifies that there is a Caymanian who is capable and available for the position. The boards will also retain responsibility for determining applications involving the promotion and re-designation of an employee; the revocation of work permits; applications for the grant, renewal or amendment of a Business Staffing Plan, and requests for the waiver of the requirement to advertise a position.
At the same time careful consideration has been given to ensure that this administrative system is not open to abuse. To this end, the Immigration Department has implemented a series of measures designed to ensure that quality and consistency of decision-making among those persons involved and randomness in the allocation of applications. These systems will be supported by regular internal and external audits.
Other important benefits
So it can be seen that there were already strong reasons for implementing a new process that was capable of meeting the needs of our modern day workforce. These reasons can only be reinforced however by the situation we find ourselves in as a result of the present economic crisis. It is clear that we in the Cayman Islands will feel the painful effects of recession along with the rest of the world. It is therefore critical that the two industries that form the backbone of our economy - tourism and financial services - are able to recruit and retain the brightest and best personnel that they need to enable them to compete effectively in the difficult times ahead. If they can do this, then we can mitigate against the worst effects and take comfort from knowing that we have the best minds helping us rebuild for a brighter future - a future that brings more opportunity for Caymanians and business in general, and ultimately continued prosperity for the people of our Islands.
It is clear therefore that we must work closely with our partners in the private sector and give them the tools they need. This includes granting them the work permits they need quickly and without unnecessary interference. One of the most frequent complaints that I hear is not the actual decision of a work permit application, but the length of time that it has taken for the decision to be taken. I am confident that the system that we now have will mean greatly improved turnaround times on applications.
I should also stress that the public/private sector partnership is not new - the private sector in fact played an important consultative part when the Government conducted its comprehensive review of our immigration legislation. Most recently, the Cayman Islands Tourism Association provided very helpful input with respect to the new category of Temporary Work Permit for Seasonal Workers. Again, in the past week the Minister for Education and I met with representatives from the private sector to discuss approaches to dealing with the current economic situation. The message we are getting from the private sector is coming through loud and clear - work with us and we will survive. I can assure you that the Government recognizes the importance of this relationship and the need for a concerted effort as we face the challenges ahead.
The introduction of the new system of processing work permit applications administratively has presented many challenges for the Department of Immigration. I am very grateful to the Chief Immigration Officer and his team for their hard work in getting us to this point. The Department has had to restructure its processes for getting applications to the appropriate decision-maker and make changes to the Department's IT systems to reflect new workflow structures. Given the importance that we attach to this new approach to processing work permit applications the Government took the decision that exemptions to the moratorium on recruitment must be made with respect to the additional personnel that are required. A number of these positions could not be filled until the Law took effect and the Department is now finalizing those appointments. It is proposed that the Department will begin accepting applications for Temporary Work Permits for Seasonal Workers with effect from Monday 1 December and the new application form for this category will be posted on the Department's website by tomorrow. The processing of work permit applications administratively will be phased in beginning on Monday 5 January 2009.
I mentioned at the beginning that amendments to the Immigration Regulations (2007 Revision) have also taken effect this week. Some of the amendments were necessary as a result of the new work permit processing arrangements. But another important change has been the inclusion of a much more detailed Schedule of Fees. This is the result of calls from private sector employers for greater clarity and consistency in application with respect to fees for particular occupations. In producing this new fee table the Department of Immigration worked closely with the Department of Employment Relations and representatives from the private sector to ensure that all occupations within each industry represented here have been specified.
As part of this exercise a decision was also taken to introduce a new fee for certain categories of senior employee. At present, the most senior executives -- Chief Executive Officers and Managing Directors who must possess a professional qualification for their position -- pay an annual work permit fee of $17,500. This is the most expensive fee that is charged for any immigration category. The next fee below this amount, which is paid by professional managers - for example accountants, doctors, and bankers, is $7,500. It was considered that the disparity between these two fees is excessive. A new fee has therefore been created in the amount of $12,500 which will apply to persons employed in the level below the most senior executives - for example, Director of Information Systems, or Director of Human Resources in the financial services or legal industry. The fee of $7,500 would continue to apply to those professionals to whom it applies now, namely accountants, bankers, lawyers, etc. We believe that this is a more equitable approach and it was not objected to when the revised Schedule of Fees was circulated to private sector organizations for comment.
Another important change relates to the system by which fees payable upon the grant of permanent residence are calculated. Previously, the fee payable depended on whether the person was employed in an unskilled, skilled or professional occupation. With only three possible outcomes this was considered unfair to those who were either considered skilled or professional but whose incomes were not as high as other occupations within those designations. For example, a teacher or nurse and a managing director would be required to pay the same fee ($5,000). It was therefore decided to introduce a system where the fee payable is based on the person's annual income, and there would be six income ranges with fees set incrementally as the income bands increased. Using the same example as before, a teacher under the new system earning between $43,000 and $59,000 per annum would pay a fee of $2,000 whereas a managing director earning in excess of $100,000 per annum would pay $6,000. We consider that this is a much fairer basis upon which to assess permanent residence fees.
The way ahead
Turning now to the future, those of you who listened to my introduction of the Immigration (Amendment) Bill 2008 in the Legislative Assembly last month will have heard me say that the launch of the administrative system of processing work permits is not the end of the process. The Department of Immigration is already working on the next stage - a stage that focuses on combating work permit abuse by unscrupulous employers. Measures are to be introduced that will require employers to pre-qualify before being able to apply for and obtain any work permits. This pre-qualification process will ensure that employers are complying with health insurance and pension requirements in respect of their employees and that they have programmes in place to ensure that Caymanians are given every opportunity through on-the-job training, mentoring or further education to advance in their careers. As part of this initiative, mechanisms will also be introduced to reward those employers who stand out as good corporate citizens. Again, the development of this next phase is being done in consultation with representatives from the private sector. The joint public - private sector group will be submitting proposals on this next stage to Cabinet by 15 January 2009.
I would like to end by saying that while the administrative system of processing applications will make huge improvements in efficiency, as with any new system there will be teething problems. I ask that in the spirit of partnership, that I have been speaking about, our businesses and employers will show patience and understanding as those issues are addressed.