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Unified Salary Scale: UN Dispute Tribunal’s decision in favour of staff overturned by UN Appeals Tribunal

A number of cases were brought to UN Dispute Tribunal (UNDT) by staff to appeal the changes to salaries and benefits which translated into a significant reduction in salary for some staff at the professional and higher levels. On 29 December 2017, the Dispute Tribunal declared those pay cuts illegal and reiterated the principle of acquired rights of staff.

 

You may recall that CCISUA, together with two other staff federations, FICSA and UNISERV, addressed a letter to the Secretary General urging him not to appeal this judgment and to call on the ICSC to rethink its approach in a more modern and productivity-focused way.

 

The UN Appeals Tribunal (UNAT) delivered its judgment on 29 June 2018, upholding the Secretary General’s appeal against the Dispute Tribunal’s initial ruling in favour of staff.

 

The UNAT’s judgment was delivered in three cases. Below is a preliminary analysis of the decision.

 

  • The UNAT adopted a narrow interpretation of what constitutes “acquired rights”. The Tribunal did not consider that staff have an absolute right to an expectation of continued salary increases over time. The Tribunal made the point that nothing prevents a potential salary decrease;
  • The UNDT had described Staff Regulation 12.1 as enjoying “quasi-constitutional” status, therefore taking primacy over the General Assembly’s (GA) subsequent resolutions that established the new staff compensation package. While the UNAT accepted that there was a normative clash, they did not agree that the GA Resolution adopting the Staff Rules should carry more weight than subsequent resolutions. In light of this, the Tribunal considered that the Secretary General was duty-bound to apply the GA Resolutions establishing the Unified Salary Scales;
  • The UNAT held that the GA’s legislative power is absolute and conceded that there was no recourse against it. It is therefore understood that the GA is entitled to modify staff’s conditions of service at any time and staff are powerless to do anything about it. The same principle applied to the secondary question of whether the transitionary scheme (transitional allowance) for staff members with dependent children was discriminatory in its design. Since the scheme was laid out in detail in the resolution, it is considered a legislative and not administrative decision, which falls beyond the Tribunals’ jurisdiction.

 

The pronouncement of the judgment can be found at minute 50 here.

 

Some salient quotes from the pronouncement:

 

  • “The SG did not act illegally in implementing Resolutions 70/244 and 71/263.”
  • “The fact that the respondents’ letters of appointment state that the initial salary may rise does not constitute an express promise by the organization to continue to increase their rate of pay and never to reduce it.”
  • “In accordance with universally accepted principles, contracts which purport to fetter in advance the future exercise of constitutional statutory or prerogative powers are contra bonos mores and not valid or enforceable. It is in the public interest that public authorities retain the freedom to exercise their discretionary or legislative powers. The fetter proposed by the respondents would be incompatible with the powers conferred upon the General Assembly by the Charter of the United Nations.”

 

 

UN Dispute Tribunal ruling on Unified Salary Scale

 

Following the ICSC’s 2015 report (A/70/30), the General Assembly adopted the ICSC’s recommendation for the introduction of one net salary scale for all staff members in the Professional and higher categories without regard to family status (Resolution 70/244). Consequently, support provided for dependent family members would be separated from salary and, therefore, staff members with a non-dependent spouse and in receipt of a salary at the dependency rate by virtue of a first dependent child would instead receive the child allowance. In essence, staff argued that their contracts of employment and their acquired rights have been breached by implementing the new salary scale, as some staff experienced a significant reduction in salary under the proposed system.

 

The Tribunal ruled that the “decisions to pay the Applicants a salary reduced of the portion which was previously paid on the basis that they have dependent(s) were unlawful” and that “the Tribunal rescinds them”. As clarified by the Judges, the mentioned rescission entailed “that the 6% reduction of the Applicants’ net salary plus post adjustment should be reintegrated as part of their salary from 1 January 2017 onwards”.

 

The three-judge panel further noted that “[t]he system allows the Secretary-General to play an important role in ensuring that proposed modifications to staff members’ conditions of service are in line with the Organization’s existing obligations”, and that “the obligation of an International Organization to respect its staff members’ acquired rights is a general principle of international civil service law”.

 

The judges also provided observations on the lack of independence of the ICSC.