General Conference Twenty-ninth Session, Paris 1997 STAFF SALARIES, ALLOWANCES AND BENEFITS OUTLINE

Transcription

1 General Conference Twenty-ninth Session, Paris C 29 C/39 20 August 1997 Original: English Item 9.10 of the provisional agenda STAFF SALARIES, ALLOWANCES AND BENEFITS OUTLINE Source: 28 C/Resolution 28.2, Part II. Background: Under the terms of this resolution, the Director- General was authorized to apply to UNESCO staff measures which the United Nations General Assembly or the International Civil Service Commission (ICSC) might adopt affecting salaries, allowances and other benefits applicable to the staff of organizations participating in the United Nations common system. Purpose: The purpose of this document is to inform the General Conference of changes which have occurred since its twenty-eighth session in relation to staff salaries, allowances and other benefits. In particular, based on decisions and recommendations of ICSC and the United Nations General Assembly on conditions of service in the United Nations common system, and based on assurances from the High-Level Task Force that funds to finance the increases would be obtained exclusively from financial allocations for staff costs without affecting the programme, the Director-General decided, on an exceptional basis, to authorize the implementation of a certain number of measures which are detailed in the document. Decision required: paragraph 11.

2 29 C/39 PART I Consideration by the Executive Board 1. Under the terms of Part II of 28 C/Resolution 28.2 adopted by the General Conference at its twenty-eighth session (1995), the Director-General was authorized to apply to UNESCO staff measures which the United Nations General Assembly or the International Civil Service Commission (ICSC) might adopt affecting salaries, allowances and other benefits applicable to the staff of organizations participating in the United Nations common system. He was further invited to report to the Executive Board at its 149th session on measures taken to absorb any consequent cost, mainly in Parts I, IV and VII, while keeping within the budgetary ceiling and having recourse, where necessary, to all or part of the balance arising from Part VII during the biennium, it being understood that Article 4.3 of the Financial Regulations would be suspended for this purpose during The Executive Board was informed at its 149th session that the decisions of the General Assembly on the twenty-first (1995) annual report of ICSC did not involve financial implications for the Organization for the biennium When transmitting to the Executive Board, at its 151st session, the twenty-second annual report (1996) of ICSC and the related General Assembly resolution, the Director-General reported to the Board at the same time the measures which, in pursuance of 28 C/Resolution 28.2, he had decided to apply to UNESCO staff in respect of their salaries, allowance and other benefits. 3. The Director-General reported, in particular, on the revision of the base salary scale for staff in the Professional category and above effective 1 January 1997, reflecting a consolidation of 5.26 per cent of post adjustment into the previous net base salary scale, on a no gain, no loss basis, i.e., with corresponding reductions in post adjustment, along with a 0.42 per cent real increase in net base salaries; the introduction of a common scale of staff assessment for staff in the Professional category and above and in the General Service and related categories, also effective 1 January 1997, for use in the calculation of pensionable remuneration and pensions; the increase, effective 1 January 1997, in dependency allowances for staff in the Professional category and above; and the increase in seven currency areas, with effect from the school year in progress on 1 January 1997, in the maximum level of the education grant available to internationally recruited staff working outside their home country, for the education of their dependent children. 4. At its 150th session, at the request of the Director-General, the Executive Board considered the issue of the automatic application to UNESCO staff, of decisions and recommendations of ICSC and the United Nations General Assembly on conditions of service in the United Nations common system. At the same session, the Board was informed that he had deferred his decision on whether or not to implement a revised post-adjustment classification for Paris established by ICSC effective 1 May 1996, based on the results of a cost-of-living survey conducted in Paris in November The Executive Board did not take a decision on this item. Following the above-mentioned consultation with the Executive Board and after careful consideration, the Director-General decided not to implement the ICSC decision taken without the obligatory consultation with him as required by the Commission s Rules of Procedure. 5. In view of the implications for programme implementation, the Director-General initially decided not to implement an increase in net salaries for Paris staff in the General Service and related categories, which would have been triggered, effective 1 January 1997, by the

3 29 C/39 - page 2 movement over 12 months of the wage index used to adjust the salary scale for such staff between salary surveys. 6. Subsequently, based on assurances from the High-Level Task Force that funds to finance the increases would be obtained exclusively from existing financial allocations for staff costs without affecting the programme, the Director-General reconsidered his position and decided, on an exceptional basis, to authorize the implementation of (a) the above-mentioned increase, effective 1 January 1997, in net salaries for staff in the Paris General Service and related categories; and (b) the revised 1 May 1997 Paris post-adjustment classification established by ICSC, for staff in the Professional category and above. He further decided to pay Paris staff in the Professional category and above, before the end of the current biennium, the arrears in post adjustment for the period 1 May 1996 to 30 April 1997, reflecting the revised post-adjustment classification for Paris established by ICSC effective 1 May The Executive Board was informed accordingly at its 151st session, in the context of its consideration of the twenty-second annual report of ICSC. In this connection, the Director- General advised the Executive Board that he would not implement automatically non-routine changes in conditions of service established by ICSC, but would decide upon them after prior consultation. Payment of the adjustments referred to in subparagraphs (a) and (b) above was made with the May 1997 payroll. The revised salary scale for the General Service and related categories effective 1 January 1997, which represents an increase of 1.8 per cent over the previous scale, is reproduced as Annex I. The Director-General has further decided that payment of the post adjustment arrears referred to in paragraph 6 above would be made with the September 1997 payroll. 8. After considering the reports of the Director-General on the twenty-first and twentysecond annual reports of ICSC, the Executive Board adopted 149 EX/Decision 6.6 and 151 EX/Decision 8.2. These decisions are reproduced in Annexes II and III. PART II Other changes in staff salaries, allowances and benefits 9. In accordance with the procedure referred to in paragraph 5 above for the adjustment between salary surveys of the salary scale for Paris staff in the General Service and related categories, the Director-General approved, with effect from 1 January 1996, a revised salary scale for such staff. The revised scale, which reflects an increase of 1.8 per cent over the scale effective 1 January 1995, is reproduced as Annex IV. 10. Furthermore, in accordance with the established procedure, the Director-General approved, with effect from 1 January 1997, increases in the annual amounts of the children s allowance for staff in the Paris General Service and related categories. The revised amounts are indicated below: First dependent child of a staff member without a spouse 18,244 First dependent child of a staff member with a spouse 8,032 Each subsequent dependent child 8,032 FF

4 29 C/39 - page 3 PART III Conclusion 11. Based inter alia on the recommendations of ICSC, the General Assembly of the United Nations, at its fifty-second and fifty-third sessions, may approve measures affecting the salaries, allowances and other benefits of staff of the United Nations common system. These measures may come into effect when the General Conference is not in session. During the same period, ICSC may, on its own initiative and in pursuance of the authority conferred on it by Article 11 of its Statute, adopt or establish measures affecting the remuneration or other conditions of service of staff members. For these reasons, the General Conference may wish, as it has done in the past, to authorize the Director-General to apply such measures to the staff of UNESCO. The Director-General wishes to emphasize, however, that he does not intend to implement automatically non-routine changes in conditions of service established by ICSC, but will decide upon them after prior consultation. The General Conference is requested to note the above clarification and to consider the adoption of a resolution along the following lines: The General Conference, I Having examined the report of the Director-General on staff salaries, allowances and other benefits (29 C/39), Takes note of the contents of the said document 29 C/39; II Considering the possibility that the International Civil Service Commission may recommend to the General Assembly of the United Nations measures affecting salaries, allowances and other benefits of the staff of organizations participating in the United Nations common system of salaries, allowances and other conditions of service, Mindful also of the possibility that the International Civil Service Commission may, on its own initiative and in pursuance of the authority conferred on it by Article 11 of its Statute, adopt or decide on similar measures, 1. Authorizes the Director-General to apply to UNESCO staff any such measures as may be adopted either by the General Assembly of the United Nations or, by the powers vested in it, by the International Civil Service Commission, when he considers that - with respect to non-routine changes of conditions of service - a measure can feasibly be implemented without diminishing programme resources; 2. Further authorizes the Director-General to report to the Executive Board should he deem that the conditions evoked in paragraph 1 are not fulfilled and is thus constrained not to apply such measures.

5

6 29 C/39 Annex II ANNEX II 6.6 Twenty-first annual report (1995) of the International Civil Service Commission: Report by the Director-General (149 EX/21 and Add. and 149 EX/45) The Executive Board, 1. Having examined document 149 EX/21 and Add., containing the Director- General s report on the twenty-first annual report of the International Civil Service Commission (1995), 2. Takes note of the content of the said document; 3. Recognizes the important role that the International Civil Service Commission plays in the management of the United Nations common system procedures for determining the salaries, allowances and other conditions of service of the staff of the system; 4. Invites the Director-General to continue his collaboration with the Commission.

7 29 C/39 Annex III ANNEX III 8.2 Twenty-second annual report (1996) of the International Civil Service Commission and related General Assembly resolutions: Report by the Director-General (151 EX/26 and Addenda and Corr. and 151 EX/50) The Executive Board, 1. Having examined document 151 EX/26 and Addenda and Corr. concerning the Director-General s report on the twenty-second annual report of the International Civil Service Commission (1996) and the related General Assembly resolution 51/216, 2. Takes note of: (a) (b) (c) the contents of the said document 151 EX/26 and Addenda and Corr.; the twenty-second annual report (1996) of the International Civil Service Commission; resolution 51/216 adopted by the United Nations General Assembly; 3. Invites the Director-General to continue to ensure the participation of UNESCO in the work of the Commission and to take due account of the results of its work.

8

9 General Conference Twenty-ninth Session, Paris C 29 C/39 Add. 22 October 1997 Original: English/French Item 9.10 of the provisional agenda STAFF SALARIES, ALLOWANCES AND BENEFITS ADDENDUM COMMENTS BY THE DIRECTOR-GENERAL ON THE OBSERVATIONS OF THE UNESCO STAFF UNION (STU) 1. The UNESCO Staff Union (STU) submitted to the Director-General comments on document 29 C/39, which is to be considered by the General Conference at its current session. These comments are reproduced in full in the annex to the present addendum. 2. The Director-General does not consider it necessary to respond in detail to STU s observations. However, to assist the General Conference in its consideration of the item concerned, clarifications are provided below on a number of elements in the STU comments. 3. In the summary preceding the full text of its comments, STU deplores the omission from document 29 C/39 of information on the differences between the Director-General and the staff on his initial decisions not to apply certain salary adjustments. It will be recalled that the purpose of document 29 C/39 is to report to the General Conference, in summary form, on changes which have occurred since the twenty-eighth session in relation to staff salaries, allowances and other benefits. The issues referred to in Section A of STU s comments are brought to the attention of the General Conference in paragraphs 4 to 7 of document 29 C/39. It will be noted, furthermore, that these issues have been resolved. 4. In paragraph 11 of its comments, STU alleges that the Director-General does not have the right, under his own authority, to apply salary increases or decreases to all or a part of the staff. Similarly, in paragraph 13 of its comments, STU queries the legal basis for the inclusion in Part II, paragraph 1, of the draft resolution (para. 11 of document 29 C/39), of a condition for the application by the Director-General to UNESCO staff, of measures on staff salaries, allowances and other benefits adopted by the United Nations General Assembly or the International Civil Service Commission (ICSC), as follows: Authorizes the Director-General to apply to UNESCO staff any such measures..., when he considers that - with respect to

10 29 C/39 Add. - page 2 non-routine changes of conditions of service - a measure can feasibly be implemented without diminishing programme resources. 5. In this connection, it should be recalled that in pursuance of Staff Regulations 3.1 and 3.2, the Director-General determines the salaries and allowances of UNESCO staff members in accordance with decisions of the General Conference and not automatically in compliance with decisions taken by any organ or body external to UNESCO, which would not be in a position to appreciate at any given time the special financial or managerial circumstances which may exist within the Organization. It should further be noted that, under Rule 33 of the Rules of Procedure of ICSC, before making a substantive determination other than a routine revision of daily subsistence allowance rates or of the classification of duty stations for the purpose of applying post adjustments, the Commission is required to seek the views of the executive heads of the participating organizations concerned on the financial and administrative implications of implementing that substantive determination. 6. Finally, it should be recalled that contrary to the implication in paragraph 12 of STU s comments, the principle of equality of purchasing power across duty stations applies only to staff in the Professional category and above. For staff in the General Service and related categories, salaries are determined on the basis of the best prevailing conditions of employment at the locality concerned.

11 29 C/39 Add. Annex ANNEX STAFF SALARIES, ALLOWANCES AND BENEFITS Observations of the UNESCO Staff Union (STU) OUTLINE The purpose of this document is to inform the General Conference of the position of the UNESCO Staff Union (STU) on the report by the Director-General on staff salaries, allowances and benefits, which constitutes document 29 C/39, of 20 August STU deplores the absence in the report of any information on the serious conflict which arose between the Director-General and staff following his decisions not to apply certain statutory salary adjustments, ignoring both the rules in force and the views of the Members of the Executive Board. STU will show that the authorization requested by the Director-General in the draft resolution contained in paragraph 11 of document 29 C/39 does not come within his discretionary authority. In the unlikely event that authorization were given to him, it would open the door to arbitrary decisions, infringe the Statute of the International Civil Service Commission (ICSC) and take the Organization out of the common system for United Nations staff.

12 29 C/39 Add. Annex A. OBSERVATIONS OF THE UNESCO STAFF UNION ON THE BACKGROUND INFORMATION CONTAINED IN PART I OF DOCUMENT 29 C/39 1. The Director-General refused to apply the new Paris post adjustment index set by the International Civil Service Commission (ICSC) to come into effect on 1 May 1996, which was based on a cost-of-living survey carried out in Paris in November 1995 using a methodology approved by the United Nations General Assembly in the framework of the common system for United Nations staff. This decision affected staff in the Professional category and above (that is, Professional staff and directors). The UNESCO Staff Union (STU) recalls that post adjustments are added to the base salary in order to equalize the purchasing power of the remuneration of staff in the Professional category and above, of equal grade and step, serving in different duty stations, by adjusting for differences in the cost of living and in the exchange rate ( ) (Item of the UNESCO Administrative Manual). 2. The Director-General subsequently decided not to apply the increase in the salaries of staff in the General Service and related categories (that is, General Service staff) stationed in Paris, which was the result of the movement over the 12 months preceding 1 January 1997 of the quarterly index of hourly wages for non-manual workers published by the French Ministry of Labour and Employment. STU recalls that Salaries of staff in the General Service category are determined in accordance with the Flemming principle by reference to the best prevailing conditions of service in the duty station concerned. For this purpose, surveys on these conditions are conducted at four or five year intervals by ( ) ICSC in the different duty stations with the participation of representatives of the administration and of the staff. ( ) Periodic ( ) adjustments are made in accordance with the decisions of the General Conference between two salary surveys ( ) on the basis of the ( ) index mentioned above. (Items and of the Manual.) 3. In order to justify depriving the staff of its statutory salary adjustments, the Director- General claimed that ICSC had not followed its Rules of Procedure, which obliged it to consult him on post adjustments, and then that the payment of these salary adjustments would affect programme execution. STU considers that these justifications are inadmissible for three reasons: (a) (b) (c) Post adjustments for Professional staff and Directors are calculated by ICSC on the basis of a survey in which representatives of the Director-General take part and on the basis of a methodology approved by the United Nations General Assembly. The new adjustment index is set periodically and is the result of mathematical calculations and not political negotiation. It has always been considered by ICSC and all the executive heads of organizations in the United Nations system (including the Director-General in 1990) as a routine question which is not covered by the special consultations provided for by the ICSC Rules of Procedure. The increase in salary for General Service staff, which is calculated by applying an external reference index in accordance with ICSC methodology, was authorized by the General Conference in 28 C/Resolution It is not within the discretionary power of the Director-General to refuse to apply those salary adjustments. If it is not to be arbitrary, that power must be exercised in compliance of the legal texts in force and the decisions of the governing bodies. In fact, the Director- General s decisions violate, inter alia, Regulations 3.1 and 3.2 and Rule of the

13 29 C/39 Add. Annex - page 2 Staff Regulations and Staff Rules, whose authority was recognized in 1975 by the Executive Board by delegation from the General Conference, in 28 C/Resolution 28.2 of the General Conference and in 149 EX/Decision 6.6 of the Executive Board and, in the Universal Declaration of Human Rights, which proclaims the right to equal pay for equal work. His decisions called into question UNESCO s membership of the United Nations common system, which is established in its Constitution (Article X) and sanctioned by the Agreement between the United Nations and UNESCO of 14 December 1946 (Article XII). 4. Document 29 C/39 makes no mention of the severely critical comments made by the Executive Board, ICSC and the Administrative Committee on Co-ordination (ACC). During the debate of the Executive Board at its 150th session in October 1996, of the 20 Members who spoke on item 6.2, 15 said that UNESCO should apply ICSC decisions, four expressed more qualified views, and only one sided with the Director-General (150 EX/SR.13). If the Executive Board took no formal decision on the issue, it is because its Members felt that their views had been made clear. Nevertheless, the Director-General persisted in his errors. At its August 1996 session, ICSC had already stated that the measures taken by the Director-General violated its Statutes, were jeopardizing the United Nations common staff system, and would demoralize UNESCO staff and give rise to higher costs for Member States (150 EX/INF.6, Annex). ACC, which brings together the executive heads of the various United Nations organizations, did not support the initiative taken by the Director-General, and the Under-Secretary General for Administration and Management of the United Nations warned the members of ACC of the implications of differing levels of adjustment on the common system (ACC/1997/4 of 14 April 1997). 5. Document 29 C/39 completely passes over the grave conflict between the Director-General and nearly all the staff which lasted for over a year. Approximately 100 Professional staff members and 200 General Service staff members submitted protests against the measures taken by the Director-General, which were followed by detailed appeals to the Appeals Board of UNESCO. Even though the Director-General has gone back on his decisions and the payment of the salary adjustments has been made, certain appellants intend to continue the procedure by appealing to the Administrative Tribunal of the International Labour Organisation (ILOAT) on the grounds of the loss incurred as a result of the payment of one year s arrears without interest, and in view of the declarations of principle of the Director- General on the legality of his decisions and the need to regard his about face as an exceptional measure. 6. STU urged staff to take part in a number of protest meetings in 1996, and to go on strike on the morning of 26 February In addition, the fiftieth Council of the Federation of International Civil Servants Associations (FICSA), which met in Paris from 3 to 7 February 1997, adopted a resolution condemning the Director-General s refusal to apply the statutory adjustments due to staff, and that condemnation was communicated to the Deputy Director- General of UNESCO by a FICSA delegation. Given that these litigious measures took place against the background of a staff policy which is persistently lacking in coherence, transparency and fairness, and raised grave questions concerning both the institution and UNESCO s programme and budget, STU invited staff to participate in a Round Table which was held throughout the day of 1 April 1997 to discuss a working document entitled Managing UNESCO on the threshold of the twenty-first century (STU-CAC/ ). The results of the Round Table were published in a special issue of the newsletter Opinion entitled

14 29 C/39 Add. Annex - page 3 Making UNESCO work published in June 1997, which can be made available to interested delegates at the General Conference. Working groups are continuing to reflect on these issues. 7. STU established a Crisis Action Committee to advise its Executive Committee on ways to inform and mobilize staff in order to cope with incoherent and arbitrary staff management. Many information and protest flashes have also been published. 8. Finally, document 29 C/39 does not even mention the work of the Joint Special Committee established by the Director-General for the purpose of seeking a negotiated solution to the conflict. The High-Level Task Force (HLTF) on staff costs and effectiveness, which was mentioned, played only a marginal role in view of the fact that most of its members participated in the Joint Special Committee. During the meeting held with staff at Headquarters on 17 February 1997, the Director-General indicated that the payment of salary adjustments attributable to the rise in the cost of living would give rise to a deficit in Part VII of the budget of $5,428,000, and that he refused to draw on programme funds. He announced the creation of a Joint Special Committee which would submit to him proposals on ways of financing the adjustments without drawing on programme funds. The Joint Special Committee, chaired by the Deputy Director-General, included the Assistant Director-General for Administration and Management, the Director of the Bureau of the Budget, the Comptroller, the Director of the Bureau of Personnel, the Director of the Office of Management Co-ordination and Reforms, four representatives of the Staff Union (STU), two representatives of the International Association of UNESCO Staff (AIPU) and two staff members drawn by lot from among the unaffiliated staff. The Committee submitted its conclusions and recommendations, which had been adopted by consensus, to the Director-General on 25 March 1997 after one month s work. The Committee, noting that the potential deficit under Part VII would only be $1,558,100 and could easily be absorbed through savings in staff costs, proposed that all the statutory salary adjustments withheld should be paid in May 1997 and the arrears on those adjustments in September If that was done, the staff unions/associations undertook to encourage their respective members to withdraw their appeals and to refrain from claiming interest as the staff s contribution to greater efforts to achieve savings. 9. As part of its participation in the Joint Special Committee, STU analysed expenditure funded from the staff budget and recent and planned use of Part VII of document 28 C/5 Approved in an attempt to determine the possible amount of the deficit which might result from payment of the statutory salary adjustments withheld. In its documents entitled The true figures and The true figures continued, STU drew attention to malfunctions connected with Part VII of the budget which were brought to light thanks to the work of the Joint Special Committee. These included excessive expenditure arising from the over-large complement of directors, temporary posts coming above the approved ceiling and fees and travel expenses of consultants and special advisers whose precise functions remained unclear. It noted, on the one hand, that certain expenses which should have been financed from other parts of the budget had erroneously if not intentionally been assigned to Part VII and, on the other hand, that other costs relating to inflation had been overestimated. If it had been used in accordance with the rules laid down by the governing bodies, Part VII should not have shown a potential deficit, but rather a potential credit of over $1.5 million. 10. In Administrative Circular No of 25 April 1997, the Director-General agreed to go back on his decisions and to pay the statutory salary adjustments withheld and the arrears retroactively and without interest but, contrary to the recommendation of the Joint Special Committee, he announced that the arrears would not be paid in September 1997, but only

15 29 C/39 Add. Annex - page 4 before the end of the current biennium, without setting a precise date. It seemed to STU ethically unacceptable for the Director-General once again to postpone the date of payment of the arrears that had accumulated since 1 May 1996, in view of the fact that no interest was to be paid on the amounts due. At the request of the Chairman of the Appeals Board, the Director-General subsequently agreed that the arrears should be paid in September. 11. The decisions of the Director-General of which staff were notified in this Administrative Circular were preceded by a set of questionable and disturbing general considerations. The Director-General persisted in affirming that the measures he had taken were neither illegal nor arbitrary and therefore announced that he had decided to pay the statutory salary adjustments on an exceptional basis. He was of the view that he should have been consulted on all ICSC decisions apart from the monthly duty station adjustments arising from changes in the rate of exchange. According to him, ICSC decisions on periodic adjustments resulting from increases in the cost of living were not binding. STU has no objection to the Director-General being consulted by ICSC before ICSC takes decisions on that or any other measure, even though the results of mathematical calculations made according to an approved methodology are not subject to negotiation. In any case, STU reiterates that within the framework of the legal texts in force the Director-General is obliged to apply ICSC decisions, unlike its recommendations, which must be submitted to and approved by the General Conference in order to be binding. The Director-General has no right to decide on his own authority, even on an exceptional basis, to award salary increases or decreases to all or a part of the staff. 12. The Director-General recalls in the Administrative Circular that, in his view, a good remuneration system should take into consideration the merits of individual staff members and thereby avoid across-the-board salary adjustments or increases. For its part, STU recalls that the system of remuneration of the United Nations common system essentially comprises two mechanisms. The purpose of one is to guarantee equivalent purchasing power to all staff members in all duty stations, and it takes the form of the periodic local adjustments made to salaries of staff members in the Professional category and above and the periodic revisions of the salary scales of the General Service category. The other is designed to take into account the respective merits of staff members and takes the forms of the within grade increments (commonly referred to as the steps within each grade) that are granted each year only to those staff members whose services are entirely satisfactory (Rule of the Staff Regulations and Staff Rules). Even if merit bonuses were introduced into the common system in addition to the steps, such bonuses could not replace the periodic salary adjustments which are intended to compensate for inflation and to maintain identical purchasing power in all duty stations for equivalent functions and merit. B. OBSERVATIONS OF THE STAFF UNION ON THE AUTHORIZATION SOUGHT BY THE DIRECTOR-GENERAL IN PART III OF DOCUMENT 29 C/ In the conclusion of his report, and in particular in the draft resolution submitted to the General Conference, as is the rule, the Director-General seeks authorization to apply to staff any such measures as may be adopted either by the General Assembly of the United Nations or, by the powers vested in it, by ICSC. But the Director-General adds to this request a reservation which would grant him discretionary power not to apply such a measure - with respect to non-routine changes of conditions of service - unless it can feasibly be implemented without diminishing programme resources. With regard to form, it should be

16 29 C/39 Add. Annex - page 5 noted that the expression non-routine changes is not defined in the draft resolution and corresponds to no clear definition in the Staff Regulations and Staff Rules. With respect to substance, this extension of the discretionary power of the Director-General prompts grave objections, chief among which are the following: (a) (b) (c) The power of determining whether a given measure may be implemented effectively without diminishing programme funds opens the door to arbitrary decisions. Poor staff budget management, for instance the creation of posts without observing the lapse factor or overloading the hierarchical structure of the Secretariat with Director posts might be compensated for by delaying salary adjustments, which would conveniently be designated as non-routine changes of conditions of service. The discretionary power being sought by the Director-General is incompatible with the Statutes of ICSC, which stipulate that certain decisions are recommendations which are submitted for the approval of the governing bodies of organizations, and that others are binding because they define the common system applicable to United Nations staff. In this way, salary adjustments intended to compensate for inflation and to maintain the principle of equal pay for equal work across the system are not negotiable by individual executive heads of United Nations organizations. The authority of ICSC and its Statutes have been recognized by the governing bodies of UNESCO since UNESCO would be placing itself outside the common system applicable to United Nations staff and would have to devise complex and hence costly mechanisms to determine the conditions of employment of its staff members at all duty stations, in particular the 60-odd field offices. At its 151st session, the Executive Board, on the contrary, invited the Director-General to continue to co-operate with the joint machinery of the United Nations system (151 EX/Decision 5.1 A, para. 93). 14. STU is concerned about the proposals submitted by the Director-General in document 29 C/5, in which Part VII is dangerously under-funded. In document 29 C/5 the budgetary provisions needed to cope with foreseeable increases in costs arising from inflation and statutory salary adjustments, which are likely to be over $20 million, have been reduced to approximately $8 million. No provision has been made for cost increases which may occur during the second year of the biennium. As the Director-General does not consider himself bound by ICSC decisions, it is to be feared that he may refuse to pay statutory salary adjustments likely to arise in 1999 and thus plunge the Organization into a fresh crisis. It is for the Member States to specify whether they wish a fair and competitive system of remuneration to operate and UNESCO to remain within the common system for United Nations staff.

17 29 C/39 Add. Annex - page 6 CONCLUSION 15. In view of the foregoing, STU wishes to recommend to Member States that they: (a) (b) instruct the Director-General to apply the measures concerning conditions of service decided by the General Assembly of the United Nations on the recommendation of ICSC or decided directly by ICSC itself; set the staff budget and Part VII of the budget at a level which makes it possible to apply the rules in force in the United Nations system in respect of staff salaries, allowances and benefits.