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15 March 2000
ANNUAL REPORT OF THE ADMINISTRATIVE TRIBUNAL TO THE GENERAL ASSEMBLY
MARCH 1999 Ė FEBRUARY 2000
The Administrative Tribunal of the Organization of American States is submitting this Report to the Permanent Council of the Organization in accordance with Article 91.f of the OAS Charter. This report covers the activities conducted by the Administrative Tribunal between March 1, 1999 and February 29, 2000. It conforms to the guidelines set out in General Assembly resolutions AG/RES. 331 (VIII-O/78); AG/RES. 1452 (XXVII-O/97); AG/RES. 1586 (XXVIII-O/98, and AG/RES. 1669 (XXIX-O/99), for preparation of the annual reports on the activities of the organs, agencies, and entities of the Organization.
In resolution AG/RES. 35 (I-O/71), in 1971 the OAS General Assembly created the Administrative Tribunal as an independent organ. The Tribunal is governed by a Statute approved by the Permanent Council in resolution CP/RES. 48 (48/71) and amended by it in resolution CP/RES. 142 (158/75), acting upon the authority that the General Assembly delegated to it in resolutions AG/RES. 35 and 158 (IV-O/74), and resolution AG/RES. 1526 (XXXVII-O/97).
The principal purpose of the Tribunal is to settleĖwithin the jurisdictional limits established in its StatuteĖdisputes between staff members and the General Secretariat concerning the terms of their employment and other related questions, including the Retirement and Pension Plan. Under a Special Agreement, the Tribunalís jurisdiction was extended to include the Inter-American Institute for Cooperation on Agriculture (IICA).
The Tribunalís six members are elected by the General Assembly to six-year terms and may be re-elected once. Election of the members is rotated so that the General Assembly elects one member of the Tribunal each year.
The Secretary of the Administrative Tribunal is in charge of the Secretariat of the Tribunal, which is an office of the Secretariat for Legal Affairs of the OAS General Secretariat. The Secretariat provides the Tribunalís members with advisory assistance, directs the statutory process that must be followed with the complaints filed with the Tribunal, and is in charge of administrative matters related to the Tribunal and its Secretariat.
II. MANDATES AND RECOMMENDATIONS OF THE GENERAL ASSEMBLY
II.1 At its twenty-ninth regular session, held in Guatemala City, the General Assembly elected Dr. Morton Sklar of the United States to a second term as a member of the Administrative Tribunal. His term began on January 1, 2000, and will end on December 31, 2005.
II.2 The term of office of Ecuadorís Dr. Enrique Ponce y Carbo as a Judge of the Tribunal will end on December 31, 2000. At its thirtieth regular session, the General Assembly will, from the candidates nominated, elect the new judge for the term from January 1, 2001 to December 31, 2006.
III. SUMMARY OF ACTIVITIES CARRIED OUT TO FULFILL THE TRIBUNALíS PURPOSE, OBJECTIVES, AND MANDATES
The Tribunal held its XLVI and XLVII regular sessions during the period covered by this Report. The full membership of the Tribunal was present for the first of these sessions; the judges on the panel for the second session were judges Morton Sklar, Rosa Montalvo Cabrera and Lionel Dupuis.
The Secretariat of the Tribunal readied for publication the Tribunalís Rules of Procedure and Volume III.a of the Tribunalís judgments in English. The latter contains judgments No. 114 to No. 138, inclusive.
IV. MEETINGS HELD
In March 1999, the Tribunal met en banc for its XLVI regular session. The XLVII regular session was held from November 29 to December 3, 1999. The judges on the panel for the second session were Judge Morton Sklar (United States), the Tribunalís President, and judges Rosa Montalvo Cabrera (Peru), and Lionel Alain Dupuis (Canada). Judge Josť Ajuricaba Da Costa e Silva (Brazil), who had been selected for the panel for this session, informed the Secretariat that he would be unable to attend. After conferring with the other members of the Tribunal, the President called Judge Dupuis to replace him.
V. RESOLUTIONS, RECOMMENDATIONS, AND OBSERVATIONS
V.1 XLVI Regular Session
During the XLVI regular session, the Tribunal, en banc, approved its Rules of Procedure in English and Spanish. The new Rules of Procedure adds to the procedures the amendments that the General Assembly introduced into the Tribunalís Statute in resolution AG/RES. 1526 (XXVII-O/97).
Five resolutions were adopted at this session. The Tribunal approved the English and Spanish versions of its Rules of Procedure, and ordered that they be translated to French and Portuguese. It also instructed the Secretariat to publish the judgments on the OAS home page on the Internet. It examined a number of regulatory, budgetary, and administrative matters related its operation and that of its Secretariat.
V.2 XLVII Regular Session
At its XLVII regular session, the Tribunal handed down two judgments and four resolutions. Its President delivered a statement at the opening of the hearings and asked that the Secretariat of the Tribunal make special mention of it in this report.
V.2.i Statement by the President of the Tribunal, Judge Morton Sklar
During the XLVII regular session the Tribunalís President publicly addressed certain matters of general interest that he wished to emphasize, and asked that the Secretariat of the Tribunal include a summary of his statement in this report.
The President began by noting that the XLVII regular session was the first to be convened under the new rules adopted by the General Assembly and by the Tribunal. Dr. Sklar remarked that the reforms were important because they signaled a revitalization of the Tribunal and a renewed commitment on the part of the Tribunal, its judges, and the Secretariat to make the dispute resolution mechanism more readily available to deal with labor relations disputes arising in the Organization.
The President went on to note that the cases before the Tribunal for that session raised very important questions and issues regarding two critical aspects of the administration of the Organizationís labor relations: policies regarding reimbursement of tax payments, and the practice of using renewable, short-term contracts to replace permanent staff employment arrangements.
As part of the Tribunalís reform efforts, when considering these cases the judges made a special effort to give appropriate attention to the jurisprudence and case precedent developed not just by this Tribunal but also by other administrative tribunals established in other international organizations.
Unlike the past practice of this Tribunal, the Secretariat had made a special and very useful effort to provide the judges on this panel with a comprehensive analysis of the cases coming up for consideration that included a review of the decisions of the Tribunalís counterpart courts with the United Nations, the International Labour Organisation, the World Bank, the Inter-American Development Bank, and other international bodies that have had to decide similar disputes.
It was the Tribunalís hope that this practice, and the more effective preparations of the case work more generally that the Secretariat had undertaken to provide, would become a regular practice, as it had greatly improved the judgesí ability to deal effectively and creatively with labor disputes and questions brought before the Tribunal.
The judges urged the administration of the OAS to be similarly aware and to make effective use of the corpus juris that existed on labor relations issues of international organizations to help inform their policies and practices and to help prevent serious disputes from arising or from reaching the point where litigation before the Tribunal became necessary.
The President concluded his remarks by pointing out that the Tribunal and its Secretariat were ready to assist in the process, consistent with the Tribunalís proper adjudicative responsibilities, including considering whether and how to establish authority for the making of advisory opinions on matters of general applicability unrelated to specific contentious cases, or to otherwise make available to interested parties summaries of case law and precedent that relate to issues of current concern to the Administration and its staff members.
V.2.ii Judgment No. 139, handed down in the case of Hanono vs. Secretary General
On March 9, 1998, during its XLIV regular session, the Tribunal adopted resolution 324, whereby it dismissed the complaint brought by Mrs. Eugenia Sara Hanono against the Secretary General.
Although the decision was final, in March 1999, one year after receiving notification of the Tribunalís decision, counsel for Mrs. Hanono petitioned the Tribunal to place the complaint back on its docket.
After hearing the pleadings, and as the petitioner had given no legally valid reason nor cited exceptional circumstances that would justify her request, the Tribunal unanimously upheld the decision contained in Resolution 324.
The Tribunal was of the view that apart from issues of deadlines and procedure, the request the petitioner filed to have her case reinstated was not premised upon arguments for which the Tribunal could order any legal remedy, which in itself made the request inadmissible.
The Tribunal noted that it understood the implications that this decision had for Mrs. Hanonoís rights and that her case had been decided on procedural grounds. In the Tribunalís view, the merits of the petition, which the Tribunal did not address in this Judgment, would have merited due consideration.
V.2.ii Judgment No. 140, handed down in the case of Romero et al. vs. Secretary General
The petitioners, Mrs. Martha Romero and Mrs. Teresa Folgate, were former staff members of the General Secretariat who retired from the Organization in December 1996, when they asked to be included in an early-retirement program.
The OAS Retirement and Pension Fund paid the benefits they were owed for having participated in the Retirement and Pension Plan; the petitioners opted to receive the amounts in question in a lump-sum payment.
The General Secretariat issued a check to each of the petitioners, payable jointly to the order of the respective staff member and the appropriate U.S. taxing authorities, for reimbursement of the income tax on the lump-sum distribution made by the Retirement Fund.
For their part, the petitioners transferred the amounts they received from the Fund to an individual retirement account (an operation known as a "rollover"), which had the effect of deferring payment of the taxes that the Secretariat reimbursed to the petitioners.
The tax authorities that had received the General Secretariatís checks returned to the petitioners the tax contributions each had paid on the lump-sum distribution.
When they prepared their annual income tax declarations, the petitioners noted that the sums the Secretariat paid as tax reimbursement were less than the sums they believed they were entitled to receive, and requested that the amounts be corrected.
The Secretariat, without objecting to the right to additional reimbursement based on possible errors in the calculation of the reimbursement, informed the petitioners that it would only pay them the reimbursements at the time the taxes on annuity distributions were actually paid to the taxing authority and so verified.
The tax documentation and information that Mrs. Romero filed with the Secretariat was not the actual tax return filed with the tax authorities. When the General Secretariat discovered this, it issued a stop-payment order against the check issued to correct the reimbursement miscalculation claimed by Mrs. Romero.
In Mrs. Folgateís case, because she had never provided the information requested of her, any additional reimbursement for the miscalculation she was claiming was not sent to her.
Petitioners therefore requested a hearing with the Secretary General, whereupon the parties mutually agreed to forego the Reconsideration hearing, thus expediting the case with the Tribunal.
The petitioners filed this complaint seeking payment of the difference that the General Secretariat mistakenly failed to reimburse to them when they opted to receive their retirement benefits in a lump-sum distribution.
There was no dispute between the parties concerning the reality of the miscalculations, but there were differences concerning the tax reimbursements because of the consequences of the "roll-over" that the petitioners opted to make.
The Tribunal considered that for an individual paying United States taxes (as in the case of Mrs. Romero and Mrs. Folgate) under the 1984 Tax Reimbursement Agreement between the General Secretariat of the Organization and the Government of the United States, a payment had to meet four criteria to quality for tax reimbursement. It had to be: 1) among one of the qualifying types of payments listed in the appendix to the Agreement; 2) subject to actual tax liability and payment; 3) verified as having been subject to tax liability and payment through such verification as the Organization may require, and 4) covered by the periodic payments made by the U.S. Government to the Organization to indemnify U.S. taxpayers and to maintain their compensation in rough equivalency to staff members who are exempt from tax.
Having examined the facts of the case and heard from the counsels for the parties, the Tribunal concluded that the petitionersí tax payments met the first of the four criteria for reimbursement in that they were among the qualifying types of payments listed in the appendix to the Agreement. However, the Tribunal found it disingenuous for petitionersí counsel to suggest that the language left open the possibility for a staff member to seek reimbursement for taxes not yet paid, but expected to be paid sometime in the future.
The Tribunal wrote that in the instant case, inasmuch as the petitioners had not paid the taxes for which they sought reimbursement, the amounts the General Secretariat paid them as of that point had involved an overpayment, rather than an underpayment.
Given the special circumstances of the case, the Tribunal gave the petitioners the equivalent of a full tax year to make the arrangements necessary to put their situation in order. They could opt to either keep their individual retirement accounts and reimburse the General Secretariat for the overpayments, or pay their taxes in a single payment and receive in reimbursement the correctly calculated amounts. If the petitioners opted to keep their individual retirement accounts and had to repay the Organization the amounts they received, the administration would have to credit the repayment to the Fund used to reimburse staff for the taxes they pay, using it to reduce the amount that the United States Government contributed for that purpose.
However, in the case of Mrs. Romero, after examining the pleadings, the documents the parties presented and the oral arguments and explanations given during the hearing held on this case, it was clear to the Tribunal that Mrs. Romero had intentionally provided to the Organization misleading and incorrect information designed to justify the payment of additional tax reimbursements.
During the hearing, counsel for petitioner Romero suggested that the tax return form provided to the General Secretariat was a preliminary version that was superceded by the actual tax return she filed with the tax authorities, which contained different information.
The information the Tribunal examined in this connection suggested otherwise.Even though the act in question might not have been technically illegal or subject to some form of disciplinary action, it was nevertheless incumbent upon the Tribunal to apply a standard of equitability and reasonableness. Therefore, in order not to encourage the submission of false or misleading information, the Tribunal opted to reject Mrs. Romeroís petition that the General Secretariat be ordered to pay her an additional sum for tax reimbursement.
The Tribunal therefore ruled that the amount of any underpayment she was due would not be paid to her even if the petitioner eventually paid taxes on the principal of her retirement disbursements that exceeded the total of the amounts that had already been reimbursed to her.
At this session, the Tribunal adopted four resolutions concerning procedural issues in the complaints currently in process and administrative business of the Tribunal and its Secretariat. Lots were drawn to determine who the members of the panel for the forthcoming sessions would be.
OAS Official documents are those published by the General Secretariat that are classified as part of the Official Records Series. Documents may be issued in one or more of the OAS official languages.