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Judgment No. 86
Complainant No. 138 Félix E. Hurtado de Mendoza v. Secretary General of the Organization of American States
THE ADMINISTRATIVE TRIBUNAL OF THE ORGANIZATION OF AMERICAN STATES, Composed of Alejandro Tinoco, President; Humberto García Ortiz, Vice President; and John L. A. de Passalacqua, Judge, Has before it for judgment the proceedings on the complaint filed by Félix E. Hurtado de Mendoza against the Secretary General of the Organization of American States. The Complainant was represented by Jorge Beruff and the Secretary General by William M. Berenson, attorney of the Secretariat for Legal Affairs, all in conformity with Article 22 of the Rules of Procedure of the Tribunal. WHEREAS: I. On April 3, 1984, the attorney for Félix Hurtado de Mendoza filed a complaint, as authorized by the Statute of the Administrative Tribunal, against the Secretary General's decision not to pay him anything in fulfillment of Judgment No. 64. After complying with the requirements as to the personal and official status of the Complainant, the attorney stated the facts and the reasons that prompted the suit. In this regard, he stated, inter alia: That the Complainant participated as a co-complainant in the complaint seeking to compel the Secretary General to pay his salary at parity with the United Nations, which led to Judgment No. 64. That, in compliance with Judgment No. 37 and with resolution AG/RES. 499 of the General Assembly, the General Secretariat paid him US$14,135.91, from which US$773.55 was deducted as the Complainant's contribution to the Retirement and Pension Fund, so that the net amount he received was US$13,362.36. That in December 1978 the Complainant's income, after calculating the pay authorized by resolution AG/RES. 499, was US$5,261. However, for the following twenty-four months, between January 1979 and December 1980, his monthly pay was less than that, and the difference adds up to US$13,206.27, which constitutes a reduction in his salary. That the agreement signed by the Secretary General and the President of the OAS Staff Association on May 10, 1983, which included the payment formula that would be used in implementing resolution AG/RES. 632 and Judgment No. 64, states that the target salary (the amount with which the OAS salary is to be compared in order to determine the drop in salary) is the United Nations salary scale plus the cost-of-living adjustments in effect in December 1978 minus, in the case of professional staff with dependents, US$33 for the allowance for the first dependent. That this method of payment affected the Complainant's interests by failing to include in the target month, December 1978, the salary corresponding to Judgment No. 37 and the salary he was paid in December 1978. That the President of the Staff Association does not state anywhere in the agreement that he acted on behalf and in representation of every staff member of the General Secretariat. That by memorandum dated May 12, 1983, the Director of the Department of Human Resources informed the Complainant that he would not receive anything in connection with Judgment No. 64. That, according to the guidelines in the introductory paragraph of the Referendum on Application of a New Salary and Benefits System, carried out on May 25, 1983, the referendum did not submit for consideration by the staff the method of payment for Judgment No. 64 stipulated in the agreement. That by memorandum of June 2, 1983, the Director of the Department of Human Resources informed the Complainant that, in accordance with the agreement, the benefits to which he was entitled under paragraphs 1(a) and (b) of resolution AG/RES. 632 (XII-O/82) amounted to US$1,223. That the Complainant did not sign any document or waiver relieving the General Secretariat of all the claims deriving from or related to operative paragraph 4 of Judgment No. 64. That the Secretary General, in responding to the request made by the Complainant to the Joint Advisory Committee on Reconsideration, arbitrarily altered the meaning of Judgment No. 64 by suggesting that parity with the United Nations was the main reason why the Administrative Tribunal ruled in favor of payment for the reductions in salary after December 1978, which moreover contradicts the certification by the Treasurer of the General Secretariat as to the purpose and amount of the payment that the General Secretariat made to the Complainant in accordance with Judgment No. 37. That in its final report, the Joint Advisory Committee on Reconsideration agreed that Judgment No. 64 makes no reference to parity with the United Nations and that therefore, in accordance with the last part of operative paragraph 4 of Judgment No. 64, the Complainant's target salary should have been based on the amount he received on December 31, 1980, plus 1/31 (one thirty-first) of what he received by virtue of Judgment No. 37, for a total of US$5,261, in the "target month." That Judgment No. 64 prevails over any administrative measure that fails to comply faithfully with it, including the agreement between the Secretary General and the President of the Staff Association, which cannot affect staff members who did not assent to it by a waiver. That the judgment, in declaring that where a salary reduction occurred the Secretary General is obliged to pay the Complainants the difference between the salary they received in December 1978, after calculating the payment authorized by resolution AG/RES. 499 (X-O/80), and the salary they received starting on January 1, 1979, did not rule that the December 1978 salary should be adjusted to that of the United Nations but, quite to the contrary, that the Complainants' 1978 classification and income level should be taken as the base. That, specifically, the Complainant prays: That Judgment No. 64 be complied with on the basis of his salary in December 1978, i.e., US$5,261, and that he be paid the difference between that and the salary he received from January 1979 to December 31, 1980, for a total of US$13,206.27. That this amount be paid to him at the rate of 40 percent in cash and 60 percent in special leave with pay. That the General Secretariat, upon payment of that amount, present a settlement statement for signature by the Complainant, including in that statement the amount that the Secretariat has withheld to adjust for the difference in basic salary between single and married staff members. That he be paid costs. II. In his answer, the attorney for the Secretary General stated: That the basic difference between the Complainant and the Respondent lies in the method of calculating the former's target salary in December 1978. For him it is the amount that results after the payment authorized by resolution AG/RES. 499 (X-O/80) is calculated; for the Secretary General it is the amount that is at parity with the United Nations after that payment. That the Complainant's claim is inconsistent with his own statement in the complaint that gave rise to Judgment No. 64; with the purpose of resolution AG/RES. 499, which was to raise staff members' 1976-1978 salaries, retroactively, to the level of parity; with the jurisprudence of the Tribunal set forth in its judgments No. 37 and 64; with the rules of equity, which oppose undue enrichment at the expense of third parties; and with the agreement between the Secretary General and the Staff Association, which represented the Complainant. That because the payment made to the Complainant in December 1978 far exceeds parity, it would be illogical to apply any part of the payment made to him in accordance with resolution AG/RES. 499 to his December salary. That the Complainant did not suffer any salary reduction, because the salary he received in January 1979 was no lower than the one he received in the preceding months. That it is illogical to add to the salary he received in December 1978 any portion of the sum received pursuant to Judgment No. 37, since his salary for that month already exceeded parity, which was the amount that the United Nations paid in Geneva in that month, so that the Complainant's allegation that his December 1978 salary was in excess of US$4,805 has no merit. That he denies that Complainant suffered any reduction of salary between January 1979 and December 1980. That the calculations by the Complainant in paragraph (c) (6) of the complaint have no merit; besides, they do not take into account the reductions in post adjustment made by the United Nations in the 24 months to which he refers -- reductions that are lawful and that do not diminish the basic salary, as the Tribunal pointed out in Judgment No. 38. That the method adopted in the agreement between the Secretary General and the President of the Staff Association, based on the rule that staff salaries in December 1978, after calculating the payment authorized under resolution AG/RES. 499, constitute parity with the United Nations, is wholly in keeping with the Complainant's rights under Judgment No. 37 and with the complaint he filed that resulted in Judgment No. 64. That the agreement between the Secretary General and the President of the Staff Association is binding on the Complainant, since all the Complainants whose claims gave rise to Judgment No. 64 authorized the Association, its Committee, and its representative to defend their interests in any claim for the payment of salaries and emoluments at parity with the United Nations effective January 1, 1979, which the Complainant did by telex because he was away from headquarters. That the method of payment under Judgment No. 64 was explained to the staff in a number of meetings held by the Staff Association in May 1983 and in circulars published by the Department of Human Resources and the Association. That the report of the Joint Advisory Committee on Reconsideration reflects an erroneous interpretation of resolution AG/RES. 499 and judgments No. 37 and 64. That for the purpose of making the payment authorized by resolutions AG/RES. 499 and 500 before the Christmas holidays of 1980, the General Secretariat calculated the amount to be paid to each staff member by multiplying the number of paid hours in accordance with Executive Order No. 80-3, which never took effect, by the amount per hour paid in November 1980. Since for most staff members the amount they received that month exceeded what they had received between June 1, 1976, and December 31, 1978, to which these resolutions refer, for them the payment constituted a windfall. That the payments would have been substantially lower if the General Secretariat had calculated the payment in proportion to the amount that the staff did not receive in each of those months. That the difference between parity and the salary the Complainant received between June 1, 1976, and December 31, 1978, was US$9,391, but the amount he received was US$13,362.36, of which approximately US$3,971 was a windfall. That the windfall was double, since the payment also included leave periods at a level substantially above the pay he received in the 1976-1978 period. That in Judgment No. 64 the Tribunal recognized the obligation to pay Complainants in cases where a reduction in salary resulted from the rescission of parity in accordance with resolution AG/RES. 383 and the payment authorized under resolution AG/RES. 499, which is not the case with the Complainant. That the Complainant's pay in December 1978 was US$4,805, whereas parity with the United Nations would have amounted to US$4,479.66, and therefore he is not entitled to claim anything for that month. That the only reductions in the total amounts received by the Complainant between July and December 1979 were due to changes in post-adjustment factors, which are authorized under Staff Rule 103.2. That, moreover, Judgment No. 64 only mandates payment to compensate for a salary reduction "until the date on which . . . [a Complainant] reached the level of the salary he received in December 1978," and that the Complainant therefore was paid no compensation for reduction in salary. That the Complainant authorized the Staff Association to represent him in the complaint that gave rise to Judgment No. 64 and did not revoke that delegation before the negotiation on and signing of the agreement by the President of the Association. It is a general principle of the power of attorney that the representation remains in effect with respect to third parties so long as they have not been notified of its revocation, and since that did not occur in this case, the Complainant remained bound by the agreement. That in studying the possible methods for determining the target salary, the General Secretariat selected parity with certain adjustments. That the salary level established for December 1978 by Judgment No. 37 and resolution AG/RES. 499 constituted parity. That the payment authorized in accordance with resolution AG/RES. 499 comprised salaries for the period between June 1, 1976, and December 31, 1978, so as to achieve parity of salaries during those 31 months retroactively. The payment made to the Complainant for that period in an amount exceeding parity must necessarily be understood by him as constituting a windfall, not authorized under the resolution. That, by accepting payment in accordance with resolution AG/RES. 499, the Complainant acknowledged that the OAS had fully complied with Judgment No. 37 in the matter of pay referred to in that resolution; and since Judgment No. 37 recognized his right to compensation at parity with the United Nations and the purpose of resolution AG/RES. 499 was to comply with that judgment, it is not logical to conclude that his December 1978 pay was not at parity, after the pay authorized by that resolution is calculated. That in Judgment No. 64 the Tribunal recognized that the policy of parity with the United Nations was in effect up to December 31, 1978, so that it would be inconsistent to assume that the target salary for a staff member in December 1978 would have been either above or below parity. That in the present case the Complainant received, in error, a post adjustment for Geneva higher than that paid by the United Nations that month--US$327 above parity. The General Secretariat's error consisted in having failed to make a timely reduction in the post-adjustment factor in accordance with Staff Rule 103.2, so as to adapt it to the reduction for Geneva made by the United Nations in 1978. Since the $327 was paid in error, the general principles of law and equity give the payer the right to recover it. That although the General Secretariat has not acted to recover that sum, the Complainant may not consider it part of his legitimate salary for December 1978. That the Complainants whose complaints gave rise to Judgment No. 64, of whom Mr. Hurtado de Mendoza is one, specifically acknowledged in their pleadings that the payment they received was at parity with the United Nations, so that it is improper for them to claim the opposite now. That if staff members were allowed to include the amount of that windfall in their basic salary, which would inflate their salaries to above the parity of December 1978, they would be given a second windfall, whereas it was not the intent of Judgment No. 64 to produce such undue enrichments. That the agreement between the Staff Association and the General Secretariat constitutes a novation of the labor relationship between the latter and its staff, and the Tribunal has held that, in cases of novation, staff members may not accept some of the benefits while rejecting others. That, specifically, the attorney for the Secretary General prays that the complaint be dismissed; that the Complainant return the amounts paid to him in error; and that he be ordered to pay costs. III. In his reply to the answer, the attorney for the Complainant stated: That Judgment No. 64 in no way ruled that parity with the United Nations should be used to pay for reductions in salary, since operative paragraph 4 of the judgment originates in the principle of labor law that, normally, not even the will of the parties suffices to amend the contract to the point of reducing workers' wages, and therefore the Complainant's target salary must be the salary he received in December 1978, after calculating the payment authorized under resolution AG/RES. 499. If the intent of Judgment No. 64 had been to use as the target the United Nations salary for December 1978, it would have said so specifically. Obviously, therefore, the judgment did not endorse parity with the United Nations. That in the OAS the post-adjustment factors contain two items, one constituting the post adjustment itself and the other representing an offset for losses in the exchange rate -- depreciation of the U.S. dollar vis-à-vis the Swiss franc. At first, these offsets were not reflected in the figures for post adjustment given in the monthly check stubs, but in December 1978 both items definitely appeared in the post-adjustment factor, so that this was very high in December 1978. That the Complainant was not represented by the President of the Staff Association in the latter's agreement with the Secretary General, since a power of attorney for a suit is limited to that suit and any authority to broaden the representatives' powers must be precisely expressed. Therefore, the President of the Association, in signing the agreement, could not state that he was acting in behalf and representation of the Complainants in Judgment No. 64. IV. In his response, the attorney for the Secretary General stated: That the Secretary General has never denied that the payment in accordance with resolution AG/RES. 499 should be taken into account for the purpose of ascertaining the Complainant's rights under Judgment No. 64, because the matter at hand is rather to determine how this is to be calculated. That the Complainant claims that the Tribunal intended the amount to be prorated for the period between June 1976 and December 1978, which has no basis whatsoever in Judgment No. 64; whereas, for the Secretary General, the Complainant's salary in December 1978, after calculating the amount paid in accordance with resolution AG/RES. 499, constitutes parity with the United Nations, since, as the Tribunal ruled in Judgment No. 64, parity was the salary policy of the General Secretariat on that date, and the purpose of the payment made under that resolution was to place staff salaries at parity with those of the United Nations. That if a staff member received a salary equal to or higher than parity in December 1978, it would be illogical and unfair to count all or part of the payment made in accordance with resolution AG/RES. 499 so as to increase his salary above the legal parity level. That in his complaint that resulted in Judgment No. 64, the Complainant stated that his December 1978 salary was at parity as a result of resolution AG/RES. 499, which contradicts the allegation in his present complaint that the salary was above parity. In accordance with the doctrine of estoppel, this inconsistency compels him to acknowledge that his December 1978 salary, as a result of the resolution, was at parity. V. Once the President had set the opening date for the twenty-fifth regular session, the pertinent steps were taken and the Tribunal was composed of Alejandro Tinoco, President; Humberto García Ortiz, Vice President; and John L. A. de Passalacqua, Judge. The Tribunal met as scheduled, deliberated on the case sub judice, and decided, in accordance with articles 17 and 18.3 of the Rules of Procedure, to take the testimony offered and to hold the oral proceedings requested by the parties. The hearing was set for April 9, 1985, at 10:00 a.m. At the appointed time, the testimony was taken and the oral proceedings were held, as the record shows. After the oral proceedings, the Tribunal decided that further evidence was unnecessary and, pursuant to Article 27 of its Rules of Procedure, designated one of its members to draft the judgment. Having examined the proceedings, the Tribunal now CONSIDERS: I. COMPETENCE OF THE TRIBUNAL 1. Pursuant to Article II of its Statute, the Tribunal is competent to hear cases in which members of the staff of the General Secretariat allege nonobservance of the conditions established in their appointments or contracts, or violation of the General Standards or of other applicable provisions. The Tribunal considers that it is competent to hear the present complaint by virtue of Article II of its Statute, since a specific violation of the conditions established in the Complainant's work contract is alleged. II. ISSUE RAISED 2. The point at issue in this complaint is the method of payment, contained in an agreement signed by the Secretary General, to honor the rights established under resolution AG/RES. 632 as a result of Judgment No. 64 of this Tribunal. The agreement states that a "target" salary should be established, based on the salary scale of the United Nations plus post adjustment. The Complainant claims that this method of calculation affects his interests because in December 1978, the target month, neither the salary determined under Judgment No. 37 nor the salary that should have been paid under that judgment was included. 3. For its part, the General Secretariat disagrees with the method used by the Complainant to calculate the target salary of December 1, 1978, since according to the Secretary General's interpretation the target salary is that established by the pay authorized in resolution AG/RES. 499, when this pay is at parity with that of the United Nations. The Complainant asserts that the payment formula agreed upon in May 1983 between the Secretary General and the President of the Staff Association, which was designed to standardize the payment established by resolution AG/RES. 632 and Judgment No. 64, was determined in accordance with the salary scale of the United Nations plus the post adjustments effective in December 1978, and that this method affects his interests because it does not include in the so-called target month (December 1978) what was paid to him in accordance with Judgment No. 37 plus the salary he received that month. The Tribunal finds that the General Secretariat is correct in claiming that there is an obvious contradiction between the arguments presented by the Complainants in the Judgment No. 64 case, among them this Complainant, and his allegation in the present complaint. 4. The Tribunal likewise accepts the Secretary General's claim about the calculation of the target salary for December 1, 1978, since the concept of parity is the basic spirit of the decision set out in Judgment No. 64. 5. Moreover, the Tribunal considers that, although it is true that the representation granted to the President of the Staff Association was essentially a judicial representation in the complaint that gave rise to Judgment No. 64, it has nevertheless been sufficiently shown in these proceedings, and the Tribunal so declares expressly, that the Complainants in that case authorized the Staff Association to act in defense of their interests in the claims they made regarding the payment of salaries and emoluments at parity with the United Nations effective January 1, 1979. 6. It should be borne in mind especially that the discussions concerning that eventual transaction between the Secretary General and the Complainants in the Judgment No. 64 case were carried out in such a manner that they were of common knowledge to all the staff of the Organization of American States, without the Complainants expressing any opposition to the way his interests were being represented by the Staff Association, and that, furthermore, those discussions were the subject of circulars issued by both the Department of Human Resources and the Staff Association. 7. This Tribunal considers valid the argument of the General Secretariat that there was no reduction of salary since the amount received by the Complainant was, in fact, slightly above what would have been due him by strict application of the principle of parity with United Nations salaries. The pay he received in December 1978 constituted the compensation at parity with the United Nations that conformed to resolution AG/RES. 499, in compliance with Judgment No. 37 of this Tribunal; this was expressly recognized by the Complainants in the proceedings that resulted in Judgment No. 64, one of whom, as has been said, was Mr. Hurtado de Mendoza. By virtue of the foregoing, and pursuant to articles II and VII of its Statute, the Tribunal unanimously RESOLVES: 1. To deny the Complainant's petition that he be paid the amount of US$13,206.27 as the alleged difference in salary received between January 1, 1979, and December 31, 1980. 2. To exempt the Complainant from the payment of costs because in the opinion of this Tribunal, in accordance with the findings of the Joint Advisory Committee on Reconsideration, he had grounds for filing the complaint.
Let notification be given. Washington, D.C., April 19, 1985
Alejandro Tinoco, Esq. / President Humberto García Ortiz, Esq. / Vice President John L. A. de Passalacqua, Esq. / Judge Martha Braga, Esq. / Secretary
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