Thomas v CI National Ins Company

• Jurisdiction: Cayman Islands
• Judge: (Sanderson, Ag. J.)
• Judgment Date: 05 February 2007
• Court: Grand Court (Cayman Islands)
• Date: 05 February 2007

Grand Court

(Sanderson, Ag. J.)

THOMAS

and

CAYMAN ISLANDS NATIONAL INSURANCE COMPANY

S. Wilson for the plaintiff;

A. Turner and Ms. R. Lawrence for the defendant.

Cases cited:

(1) Allen v. National Australia Group Europe Ltd., [2004] IRLR 847, applied.

(2) B.B.C. v. Kelly-Phillips, [1998] 2 All E.R. 845; [1998] I.C.R. 587; [1998] IRLR 294, considered.

(3) Cerberus Software Ltd. v. Rowley, [2001] I.C.R. 376; [2001] IRLR 160; [2001] EWCA Civ. 78, applied.

(4) Dixon v. B.B.C., [1979] Q.B. 546; [1979] 2 All E.R. 112; [1979] I.C.R. 281; [1979] IRLR 114, considered.

(5) Hamilton v. Open Window Bakery Ltd., [2004] 1 S.C.R. 303; (2004), 235 D.L.R. (4th) 193; 2004 SCC 9, applied.

(6) Long v. OBM Ltd., 2000 CILR N–12, applied.

(7) Manchester City F.C. Plc v. Royle, [2005] EWCA Civ. 195, applied.

(8) Roulstone v. Cayman Airways Ltd., 1992–93 CILR 259, dicta of Schofield J. applied.

(9) Withers v. General Theatre Corp. Ltd., [1933] 2 K.B. 536, [1933] All E.R. Rep. 385, considered.

Legislation construed:

Immigration Law 2003, s.39: The relevant terms of this section are set out at para. 16.

s.40: The relevant terms of this section are set out at para. 16.

s.42: The relevant terms of this section are set out at para. 16.

Immigration Regulations (2003 Revision), reg. 4: The relevant terms of this regulation are set out at para. 20.

Labour Law (2001 Revision), s.9: The relevant terms of this section are set out at para. 45.

s.47: The relevant terms of this section are set out at para. 63.

s.48: The relevant terms of this section are set out at para. 63.

s.54: The relevant terms of this section are set out at para. 64.

s.55: The relevant terms of this section are set out at para. 64.

Immigration and Status-work permits-renewal-under Immigration Law 2003, employer to use best endeavours to find suitable Caymanian before applying to renew work permit for non-Caymanian-not required by Law to dismiss non-Caymanian in favour of suitable Caymanian applicant

Employment-termination-wrongful dismissal-dismissal from fixed-term contract not wrongful if notice given in accordance with notice clause-no damages if minimum notice given, else limited to salary for notice period

The plaintiff claimed damages for wrongful dismissal by the defendant.

The plaintiff, a Canadian citizen, was employed by the defendant on a two-year contract, which provided, inter alia, that her employment could be terminated on one month”s notice and that it was subject to the defendant”s obtaining a work permit for her. The plaintiff was granted a work permit for one year. Shortly before its renewal date, the defendant advertised the post and received an application from a suitably-qualified Caymanian. The defendant, believing that it was required by the Immigration Law 2003 to offer the position to the Caymanian, gave the plaintiff seven weeks” notice and informed the Work Permit Board, which then renewed her permit for three months only. The plaintiff ceased employment with the defendant and brought the present action for loss of earnings to the end of the two-year period.

She submitted that her dismissal had been wrongful because (a) the defendant was not required by the legislation to employ a Caymanian, nor was the Work Permit Board required to refuse to issue a work permit to her merely because a Caymanian was available; (b) the contract had not been frustrated by her inability to obtain a work permit, because the Board had not yet refused to issue the permit at the time of her dismissal; (c) the clause providing that the contract was determinable on one month”s notice should be ignored to give effect to the parties” intentions, as it was inconsistent with the clause providing for a fixed two-year period, and a notice clause did not prevent an employment contract from being one for a fixed term; alternatively (d) it was an implied term of the

contract that the notice clause would only apply to a dismissal for just cause; (e) in any event, the defendant could not rely on the notice clause because its decision to dismiss the plaintiff was based on its mistaken belief that it was obliged to employ the Caymanian; and she also submitted that (f) she was permitted to claim compensation for unfair dismissal and retirement allowance under the Labour Law (2001 Revision), ss. 48(1) and 54(1).

The defendant submitted in reply that (a) in practice the Board had never granted a work permit to a non-Caymanian when a Caymanian was available, and in employing a Caymanian it was giving effect to the intention of the legislature to give priority to the interests of Caymanians; (b) the contract was frustrated because it became incapable of performance by the plaintiff once a qualified Caymanian had applied; (c) the defendant was entitled to rely on the notice clause since the parties had expressly agreed to a fixed-term contract that was nevertheless determinable by notice, as provided for by the Labour Law, s.9; (d) the notice clause did not apply exclusively to dismissal for cause, as this was expressly provided for in the contract, nor had the defendant done anything to give the plaintiff that impression; (e) although mistaken in its belief that it had to dismiss the plaintiff for the reason given, it had nevertheless given notice in accordance with the general notice clause, as it was entitled to do, and had expressly not cited its inability to obtain a work permit as the reason for dismissal; and (f) any claim for unfair dismissal and retirement allowance had to be brought before the Labour Tribunal as the court did not have jurisdiction to make such awards.

Held, dismissing the application:

(1) The defendant had not been required by the Immigration Law to dismiss the plaintiff and hire the Caymanian applicant, although it was obliged to use its best endeavours to ascertain whether a qualified Caymanian was available before it applied for the renewal of her work permit. Nor was the Work Permit Board obliged to refuse a work permit to a non-Caymanian in favour of a Caymanian, although it was entitled to do so. Whilst the legislation was intended to protect the interests of Caymanians, there were other important considerations, including the interests of the community as a whole and the welfare of Cayman companies wishing to employ non-Caymanians. The defendant”s argument that the contract of employment had been frustrated also failed because the Board had not refused to issue a permit at the time of the plaintiff”s dismissal (para.19; paras. 21–22; para. 28; para. 31).

(2) However, the plaintiff had not been wrongfully dismissed and was not entitled to damages. Although the defendant had interpreted the law incorrectly, it had not dismissed the plaintiff on that basis but had instead relied on the general one month”s notice clause. Furthermore, according to settled principle, even if the original reason given had been invalid, the defendant would have been able to rely on the notice clause at a later stage to justify the dismissal. In any event, the defendant had been given

more than the month”s notice to which she was entitled and she had not therefore suffered any damage (paras. 54–55; para. 61).

(3) The notice clause did not conflict with that providing for a fixed term of two years but merely qualified it. A clause that limited or qualified another would not be struck down unless it was manifestly inconsistent with the rest of the contract, and the court had to read the document as a whole to determine and give effect to the intentions of the parties. There was authority that even a contract with a defined term could be determined by notice if the parties so agreed, whereas the English authorities cited by the plaintiff were of limited use as they related only to the interpretation of specific statutory provisions in that jurisdiction. Furthermore, the Labour Law, s.9 expressly provided that a fixed-term contract might allow for early termination within the contract or by the agreement of the parties. Nor was there an implied term that the notice clause would only apply to dismissal for cause, as there was no evidence of any discussion of this matter between the parties and the contract expressly provided for this event (para. 34; para. 37; paras. 44–45; para. 48).

(4) The plaintiff was not entitled to compensation for unfair dismissal and retirement allowance as such claims could not form part of a common law claim for damages for wrongful dismissal. Although the Labour Law, ss. 48(1) and 54(1) provided that an employee ‘may’ file a complaint with the Director of Labour, the language was not intended to be broadly permissive, so as to allow a range of other applications for this relief. The purpose of the statutory scheme was to ensure that such claims could only be brought before the Labour Tribunal and the court had no jurisdiction to entertain them (paras. 65–66).

1 SANDERSON, Ag. J.: The plaintiff seeks damages for wrongful dismissal. Her employment contract provided that she would be employed until December 31st, 2006. It also provided that the defendant could terminate the contract by giving her not less than one month”s notice. By letter dated November 11th, 2005, the defendant advised the plaintiff that it was required by the Immigration Law to offer her position to a qualified Caymanian who had applied for it. The defendant gave the plaintiff notice advising that her employment would be terminated with effect from December 31st, 2005.

2 The defendant defends the claim primarily on the basis that-

(i) it was required by law to offer her position to a qualified Caymanian who had applied for it; and

(ii) the terms of the contract permitted the defendant to dismiss the plaintiff upon giving one month”s notice.

At issue are the determination of the rights and obligations of the parties to the agreement and the statutory rights and obligations of the defendant employer...