UNITED NATIONS EDUCATIONAL, SCIENTIFIC AND CULTURAL ORGANIZATION EXECUTIVE BOARD. Hundred and fiftieth Session

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1 PARIS, 1 October 1996 English & French only UNITED NATIONS EDUCATIONAL, SCIENTIFIC AND CULTURAL ORGANIZATION EXECUTIVE BOARD Hundred and fiftieth Session Item 6.10 of the provisional agenda APPLICATION OF THE DECISIONS AND RECOMMENDATIONS OF THE INTERNATIONAL CIVIL SERVICE COMMISSION BY UNESCO. BACKGROUND INFORMATION SUMMARY Relevant background information is provided below to assist the Executive Board in its consideration of the issues discussed in document 150 EX/36, which is being submitted under this agenda item. UNESCO and the common system 1. UNESCO entered into a relationship agreement with the United Nations on 14 December 1946, making it one of the earliest members of the United Nations family of organizations and its common system of salaries, allowances and benefits. Article XII of the Agreement, entitled Personnel arrangements reads as follows: 1. The United Nations and the United Nations Educational, Scientific and Cultural Organization recognize that the eventual development of a single unified international civil service is desirable from the standpoint of effective administrative co-ordination, and with this end in view agree to develop common personnel standards, methods and arrangements designed to avoid serious discrepancies in terms and conditions of employment, to avoid competition in recruitment of personnel, and to facilitate interchange of personnel in order to obtain the maximum benefit from their services. 2. The United Nations and the United Nations Educational, Scientific and Cultural Organization agree to co-operate to the fullest extent possible in achieving these ends and in particular they agree to:

2 - page 2 (a) (b) (c) (d) consult together concerning the establishment of an International Civil Service Commission to advise on the means by which common standards of recruitment in the secretariats of the United Nations and the Specialized Agencies may be ensured; consult together concerning other matters relating to the employment of their officers and staff, including conditions of service, duration of appointments, classification, salary scales and allowances, retirement and pension rights and staff regulations and rules with a view to securing as much uniformity in these matters as shall be found practicable; co-operate in the interchange of personnel when desirable on a temporary or permanent basis, making due provision for the retention of seniority and pension rights; co-operate in the establishment and operation of suitable machinery for the settlement of disputes arising in connection with the employment of personnel and related matters. 2. Starting in 1948, the Consultative Committee on Administrative Questions (CCAQ), a subsidiary committee of the Administrative Committee on Co-ordination (ACC), began to meet on a regular basis to discuss personnel and administrative issues of concern to organizations of the common system and develop a common approach to such matters. Ever since, UNESCO has been an active participant in CCAQ and in its branch on personnel and general administrative questions. UNESCO was also represented at the periodic meetings of the International Civil Service Advisory Board (ICSAB), a subsidiary organ of the United Nations General Assembly on personnel matters established in 1948, which was replaced by ICSC in By 17 C/Resolution 23.2 (1972) and 18 C/Resolution 28.1 (1974), the General Conference authorized the Executive Board to take the necessary steps to enable UNESCO to participate in the work of ICSC, whose establishment was then under consideration. The United Nations General Assembly, by its resolution 3357 (XXIX) of 18 December 1974, established the Commission for the regulation and co-ordination of the conditions of service of the United Nations common system. By the same resolution, the General Assembly invited the member organizations of the United Nations common system to participate in the work of ICSC. The Executive Board, by virtue of the authorization in 17 C/Resolution 23.2 and 18 C/Resolution 28.1 of the General Conference, decided at its 97th session (May 1975) to accept the Statute of the Commission on behalf of the Organization without reservations, and authorized the Director-General to inform the Secretary-General of the United Nations of that acceptance. The text of 97 EX/Decision of the Executive Board in this regard may be found in Annex I. UNESCO s acceptance of the Statute became effective on 17 June Along with the other 11 organizations which have accepted the Statute of the Commission, UNESCO contributes to the financing of the ICSC secretariat.

3 - page 3 Respective responsibilities of the Commission and the United Nations General Assembly under the Statute of ICSC 4. The functions and powers of the Commission are spelled out in Chapter III of its Statute, which is attached as Annex II. Under Article 10, the Commission is called upon to make recommendations to the United Nations General Assembly on: (a) the broad principles for the determination of the conditions of service of the staff; (b) the scales of salaries and post adjustments for staff in the Professional and higher categories; (c) allowances and benefits of staff which are determined by the General Assembly; ] (d) staff assessment. 5. Under Article 11 of its Statute. The Commission shall establish: (a) the methods by which the principles for determining conditions of service should be applied; (b) rates of allowances and benefits, other than pensions and those referred to in Article 10(c), the conditions of entitlement thereto and standards of travel; (c) the classification of duty stations for the purpose of applying post adjustments. 6. At the headquarters duty stations and any other duty stations which maybe added at the request of ACC, the Commission establishes the relevant facts, by means of periodic salary surveys, for the determination of the salary scales of staff in the General Service and other locally recruited categories, and makes recommendations in this regard to the organizations concerned (Article 12). Decisions in this respect are taken in accordance with the internal procedures of each organization. 7. The Commission establishes job classification standards for all categories of staff in fields of work common to several of the organizations (Article 13). 8. Furthermore, the Commission makes recommendations to the organizations on standards of recruitment; the development of recruitment sources; the organization of competitive examinations or alternative selection procedures; career development, staff training programmes and evaluation of staff (Article 14); the development of common staff regulations (Article 15); and other matters as it may consider necessary to achieve the purposes of its Statute (Article 16). 1. Dependency allowances and language incentives for staff in the Professional and higher categories, education grant, home leave, repatriation grant and termination indemnity.

4 - page 4 Respective roles of the Executive Board and the General Conference in the review and implementation of decisions and recommendations of the Commission and subsequent action by the General Assembly 9. Since 1982, in accordance with 114 EX/Decision 8.5 (1982) of the Executive Board and the related 22 C/Resolution 37 (1983) of the General Conference, the annual reports of the Commission have been submitted to the Executive Board at its spring session in the year immediately following the year to which the report relates. At the same time, the Executive Board is informed of any action taken by the Director-General to implement the decisions adopted by the United Nations General Assembly or ICSC. Accordingly, the annual report of ICSC for 1995 was transmitted to the Executive Board at its 149th session. By 149 EX/Decision 6.6, which is attached as Annex III, the Executive Board recognized 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 and invited the Director-General to continue his collaboration with the Commission. 10. In accordance with 22 C/Resolution 37 of the General Conference, the annual reports of ICSC are not normally submitted to the General Conference, except when, in the opinion of the Director-General or of the Executive Board, they contain conclusions or recommendations calling for actions which are within the sole competence of the General Conference, or which in the opinion of the Director-General or the Executive Board are otherwise of such importance that they should be brought to the notice of the General Conference. 11. The General Conference is, however, informed at each regular session, of the decisions adopted by the Executive Board on the annual reports of ICSC, and of the principal measures taken by the Director-General since the previous session of the General Conference, to apply to UNESCO personnel the decisions of the United Nations General Assembly or ICSC on staff salaries, allowances and other benefits. It has also been standard practice for the General Conference, at each session since acceptance by the Organization of the Commission s Statute, to adopt a resolution authorizing the Director-General to apply to UNESCO staff members, measures which might be adopted by the United Nations General Assembly or by ICSC affecting salaries, allowances and other benefits, the application to take effect from the date set either by the General Assembly or by the Commission, as the case may be. The resolution to this effect adopted by the General Conference at its twenty-eighth session (28 C/Resolution 28.2) may be found in Annex IV. Recent Commission action on post adjustment classification 12. The secretariat of the Commission carried out a cost-of-living survey in Paris in November Similar surveys were undertaken during approximately the same period at all other headquarters locations and Washington, D.C. Such surveys are carried out at every duty station, usually every four years, to permit cost-of-living comparisons to be made between each location and the base of the system, New York. The purpose of these surveys is to ensure that the objective of the post adjustment system is met, i.e. that staff members in the Professional category and above have the same purchasing power at the same grade and step at all duty stations. To this end, prices are collected for some 240 representative items plus housing.

5 - page In accordance with established practice, the results of the 1995 round of cost-of-living surveys at headquarters locations and Washington, D. C., were reviewed in the first instance by ICSC s subsidiary body, the Advisory Committee on Post Adjustment Questions (ACPAQ), at its twentieth session (March 1996). Based on ACPAQ s recommendations regarding the costof-living survey carried out in Paris, the Commission, at its forty-third session (April/May 1996), determined that, as of November 1995, owing to the relatively higher increase in the cost of living in Paris vis-à-vis New York since the last survey, staff in the Professional category and above in Paris were underpaid compared with their counterparts in New York. In accordance with the powers conferred upon it by Article 11 (c) of its Statute, the Commission decided to make an upward adjustment in the post adjustment classification for Paris, effective 1 May Established ICSC procedures were applied to update the survey results from the survey date (November 1995) to January 1996, for application in May 1996, producing a 5.3 per cent increase in net remuneration (net base salary plus post adjustment). An excerpt from the promulgation by the Chairman of the Commission of the post adjustment classifications for May 1996 is attached as Annex V. 14. The Director-General decided to suspend the implementation of the revised post adjustment classification, pending consultation with the Executive Board, For headquarters duty stations such as Paris, the secretariat of ICSC routinely reviews post adjustment classification on a monthly basis to account for changes in the operational rates of exchange. The Chairman of ICSC then promulgates any modifications warranted in post adjustment multipliers, by delegation of authority from the Commission. In view of the Director- General s above-mentioned decision, the post adjustment multipliers for Paris promulgated by the Chairman of ICSC since 1 May 1996 have not been applied. Instead, the multipliers have been recalculated for UNESCO payroll purposes, to exclude the results of the November 1995 Paris cost-of-living survey. For example, a multiplier of 66.8 was promulgated by ICSC for Paris for May 1996, whereas a multiplier of 58.4 was actually used for the payroll at UNESCO. 15. A number of other United Nations common system organizations maintain offices in Paris (the United Nations (UNHCR, UNEP, UNU, UNIC), the International Civil Aviation Organization (ICAO), the International Labour Organization (ILO), and the United Nations Industrial Development Organization (UNIDO)), employing a total of some 43 staff members in the Professional category and above. The revised post adjustment classification for Paris established by ICSC from 1 May 1996 has been implemented by all the above-cited organizations. 16. The 1995 round of headquarters cost-of-living surveys resulted in significant upward adjustments in post adjustment classification in London and Montreal and in a minor upward adjustment in Vienna. These changes were implemented by the organizations concerned. 17. On behalf of the Director-General, the Assistant Director-General for Management and Administration informed the Chairman of ICSC, by a letter dated 24 July 1996, of the decision to suspend the implementation of the revised post adjustment classification for Paris. This matter was taken up by the Commission at its forty-fourth session (July/August 1996), in the context of its obligation to report to the United Nations General Assembly on the implementation of Commission decisions and recommendations by the participating organizations of the common system. By a letter dated 16 August 1996, the Chairman of ICSC informed the Director-General of the Commission s above-mentioned discussion and

6 - page 6. forwarded a copy of the relevant portion of its report to the fifty-first session of the General Assembly. The above-cited exchange of correspondence is reproduced in Annex VI. 18. At the time of writing, 95 staff members in the Professional category and above at Headquarters had contested the Director-General s decision to suspend the application of the revised post adjustment classification for Paris established by ICSC effective 1 May 1996, under Article 7(a) of the Statutes of the Appeals Board, referring inter alia to Staff Rule 103.2(c) (Adjustments to salaries),¹ 28 C/Resolution 28.2 of the General Conference, 149 EX/Decision 6.6 of the Executive Board and Article 11 of the Statute of ICSC. These staff members have been informed, on behalf of the Director-General, that he maintained the suspension and would seek the views of the Executive Board, at its 150th session, on the issue of the automatic implementation of ICSC decisions and recommendations. Of these 95 staff members, 62 have indicated their intention to pursue the contestation by addressing a written notice of appeal to the Appeals Board. 19. It should be noted that, had a cost-of-living survey not been carried out in Paris in November 1995, the post adjustment classification for Paris would have been due for adjustment effective 1 December 1996, based on the movement over the preceding 12 months of the local consumer price index used for post adjustment and related factors. Because of the cost-of-living survey, the next adjustment by ICSC of the Paris post adjustment classification, taking into account not only the change in the exchange rate of the French franc vis-à-vis the United States dollar, but also price movements, is only expected as of 1 May It should further be noted that, in another development concerning the methodology to be applied for post adjustment determination at headquarters stations, the Commission, at its forty-fourth session (July/August 1996), decided on a change in that methodology which is expected to lead to a reduction in the post adjustment classification for Paris. In particular, the Commission decided to revise the manner by which the weight assigned to expenditures outside the duty station in the calculation of the post adjustment index is determined for headquarters duty stations, effective 1 March Possible upcoming changes in common system salaries, allowances and benefits 21. Information is provided in Annex VII on a number of possible upcoming changes in common system salaries, allowances and benefits, It should be borne in mind that an eventual decision not to apply automatically measures concerning common system conditions of service adopted by the United Nations General Assembly or ICSC could affect the salaries of staff in the Professional category and above and most allowances and benefits. UNESCO has heretofore systematically applied to its staff measures such as those described in Annex WI, decided upon by the General Assembly or by the Commission in exercise of its authority under its Statute. 1. Staff Rule 103.2(c) reads as follows: (c) The post adjustment shall be calculated according to the classification of the staff member s duty station under the post adjustment system. Such classification shall be determined by the International Civil Service Commission on the basis of the cost of living and related factors at the duty station, including the rate of exchange between the duty station currency and the US dollar.

7 ANNEXES I. II. III. IV. V. VI. VII. 97 EX/Decision of the Executive Board: Acceptance by UNESCO of the Statute of ICSC. Chapter III (Functions and powers) of the Statute of ICSC. 149 EX/Decision 6.6 of the Executive Board: Twenty-first annual report (1995) of the International Civil Service Commission: Report by the Director-General. 28 C/Resolution 28.2 of the General Conference: Salaries, allowances and other benefits. Promulgation by the Chairman of ICSC of post adjustment classifications for May Exchange of correspondence between UNESCO and ICSC on the application by UNESCO of the Commission s decisions and recommendations. Possible upcoming changes in common system salaries. allowances and benefits.

8 Annex I ANNEX I 97 EX/DECISION OF THE EXECUTIVE BOARD: ACCEPTANCE BY UNESCO OF THE STATUTE OF ICSC The Executive Board, Having examined the report of the Director-General on the establishment of the International Civil Service Commission, Recalling resolutions 23.2 and 28.1 adopted by the General Conference at its seventeenth and eighteenth sessions respectively, Having examined the Statute of the International Civil Service Commission as approved by the United Nations General Assembly resolution 3357 (XXIX), Decides to accept the Statute of the International Civil Service Commission on behalf of the Organization; Authorizes the Director-General to notify the Secretary-General of the United Nations of the acceptance by the Organization of the Statute of the International Civil Service Commission, in accordance with Article 1 of that Statute.

9 Annex II ANNEX 11 CHAPTER III (FUNCTIONS AND POWERS) OF THE STATUTE OF ICSC Article 9 In the exercise of its functions, the Commission shall be guided by the principle set out in the agreements between the United Nations and the other organizations, which aims at the development of a single unified international civil service through the application of common personnel standards, methods and arrangements. Article 10 The Commission shall make recommendations to the General Assembly on: (a) (b) (c) (d) the broad principles for the determination of the conditions of service of the staff; the scales of salaries and post adjustments for staff in the Professional and higher categories; allowances and benefits of staff which are determined by the General Assembly; staff assessment. Article 11 The Commission shall establish: (a) the methods by which the principles for determining conditions of service should be applied; (b) rates of allowances and benefits, other than pensions and those referred to in Article 10(c), the conditions of entitlement thereto and standards of travel; (c) the classification of duty stations for the purpose of applying post adjustments. Article At the headquarters duty stations and such other duty stations as may from time to time be added at the request of the Administrative Committee on Co-ordination, the Commission shall establish the relevant facts for, and make recommendations as to, the salary scales of staff in the General Service and other locally recruited categories. 2. Notwithstanding the provisions of paragraph 1 above, the executive head or heads concerned, after consultation with the staff representatives, may request the Commission to determine the salary scales at a particular duty station instead of making a recommendation. The salary scales so determined shall apply to all staff in the same category at the duty station. 3. In exercising its functions under paragraphs 1 and 2 above, the Commission shall, in accordance with Article 28, consult executive heads and staff representatives.

10 Annex II - page 2 4. The Commission shall determine the date or dates on which it can assume the functions set out in this article. Article 13 The Commission shall establish job classification standards for all categories of staff in fields of work common to several of the organizations. It shall advise the organizations on the development of consistent job classification plans in other fields of work. Article 14 The Commission shall make recommendations to the organizations on: (a) standards of recruitment; (b) the development of recruitment sources, including the establishment of central rosters of qualified candidates, particularly at junior entrance levels; (c) the organization of competitive examinations or alternative selection procedures; (d) career development,staff training programmes, including inter-organization programmes, and evaluation of staff. Article 15 The Commission shall make recommendations to the organizations on the development of common staff regulations. Article 16 The Commission may, after appropriate consultations, make such recommendations to the organizations on other matters as it may consider necessary to achieve the purposes of the present statute. Article 17 The Commission shall submit an annual report to the General Assembly, including information on the implementation of its decisions and recommendations. The report shall be transmitted to the governing organs of the other organizations, through their executive heads, and to staff representatives. Article The Commission shall establish policies and shall formulate guidelines with respect to all matters for which it has responsibility under this statute. In particular, it shall formulate recommendations under Article 10 concerning the system of salaries and allowances and conditions of service; adopt the annual report under Article 17; propose its budget estimates under Article 21; and adopt its rules of procedure under Article 29.

11 Annex II - page 3 2. Within the aforesaid policies and guidelines, the Commission may delegate to its Chairman, Vice-Chairman or to any other member or members responsibility for carrying out specific functions under the statute other than those enumerated above. The Chairman, Vice- Chairman or the member or members concerned shall be responsible to the Commission for the discharge of the functions delegated to them and shall report to the Commission thereon.

12 Annex III ANNEX III 149 EX/DECISION 6.6 OF THE EXECUTIVE BOARD: TWENTY-FIRST ANNUAL REPORT (1995) OF ICSC: REPORT BY THE DIRECTOR-GENERAL 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.

13 Annex IV ANNEX IV 28 C/RESOLUTION 28.2 OF THE GENERAL CONFERENCE: SALARIES, ALLOWANCES AND OTHER BENEFITS The General Conference, I Having examined the report by the Director-General benefits (28 C/69), on staff salaries, allowances and other 1. Takes note of the contents of the said document 28 C/69; 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 Statutes, adopt or decide on similar measures, Authorizes the Director-General to apply to UNESCO staff members such measures of this nature as may be adopted either by the United Nations General Assembly or, by virtue of the powers vested in it, by the International Civil Service Commission, the application to take effect from the date set either by the General Assembly or by the Commission, as the case may be; Invites the Director-General 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 will be suspended for this purpose during ; Decides that any amount added to the budget base for must not be added to the budget base for future biennia.

14 Annex V ANNEX V PROMULGATION BY THE CHAIRMAN OF ICSC OF POST ADJUSTMENT CLASSIFICATIONS FOR MAY 1996 INTERNATIONAL CIVIL SERVICE COMMISSION NEW YORK COMMISSION DE LA FONCTION PUBLIQUE INTERNATIONAL CABLE ADDRESS-ADDRESSE TELEGRAPHIQUE UNATIONS NEWYORK REFERENCE: ICSC/CIRC/PAC/ May 1996 To/Aux: Participating organizations/organisations participantes Staff Representatives/Représentants du personnel From/Du: Chairman, International Civil Service Commission Président de la Commission de la fonction Subject/ Objet: Schedule of Post Adjustment Classifications and threshold figures for the purpose of calculating rental subsidies/classement des lieux d affectation aux fins d ajustements des indemnités de poste et seuils aux fins du calcul des allocations de logement A consolidated schedule of post adjustment classifications and threshold figures for the purpose of calculating rental subsidies (or deductions) is attached. Names of countries and areas which appear in the English alphabetical order are indexed in French in the list attached to the schedule. In cases where only one post adjustment classification is shown for a country, normally for the capital city, that classification will be applicable for all duty stations within the country. This schedule is effective 1 May 1996, unless otherwise indicated, and supersedes any schedule previously published. On trouvera ci-joint un barême mis à jour du classement des lieux d affectation aux fins d ajustements des indemnités de poste et des seuils aux fins du calcul des allocations (ou deductions) de logement. Les noms des pays et localités figurent par ordre alphabétique anglais. On trouvera à l index annexé au barême les noms en français. Dans les cas où une seule classe est indiquée pour le pays, en général pour la ville capitale, cette classe s applique à tous les lieux d affectation dans le pays. Sauf indication contraire, le barême ci-joint entre en vigueur le 1er mai 1996 et remplace tous les barêmes déjà parus.

15 Annex V - page 2 DESCRIPTION OF DATA APPEARING IN PAC CIRCULARS 1. Country or area - Name of country or area appears under this column. 2. Exchange-rate - Latest exchange rate. 3. Post adjustment a. Index - The post adjustment index (PAI) used to determine the latest post adjustment multiplier. The letter e against an index indicates an estimate. b. Mult. - Post adjustment multiplier. c. Chg. ind. - Change indicator. When revised post adjustment classification (PAC) is reported in the circular for the first time, a Y will appear under this column. d. Eff. date - Effective date of PAC (multiplier). e. Reason for change - When the revised PAC is reported in the circular for the first time the reason for change is shown under this column. 4. Thresholds a. Dep. rate - Threshold percentage figure at the dependency rate. b. Sing. rate - Threshold percentage figure at the single rate. c. Calc. ind. - Calculation indicator. When a Y appears in a column, all housing subsidies at the duty station must be recalculated effective the date shown in the next column. When a Z appears in this column, all housing subsidies at this duty station must be recalculated effective the date of the post adjustment change. d. Eff. date - Effective date of threshold percentages shown in the circular.

16 Annex V - page 3 PERSONAL TRANSITIONAL ALLOWANCES (PTA) IN EFFECT 1 MAY 1996 Duty station Applicable Date of multiplier points next revision Kenya 2.1 June 1996 I 1 Sudan 1.9 August 1996 Suriname f 16.4 August 1996 Turkmenistan 3.5 August Cost-of-living surveys 8. The results of the cost-of-living surveys for the following duty stations are taken into account in the attached tables. Duty station Type of survey Date of survey Survey materials received Albania Housing October 1995 November 1995 Austria Place-to-place November 1995 January 1996 Azerbaijan Place-to-place December 1995 January 1996 Belgium Housing October 1995 December 1995 Belize Housing November 1995 January 1996 Bulgaria Housing January 1996 February 1996 Burundi 3/ Place-to-place August 1995 October 1995 Canada, Montreal Place-to-place October 1995 November 1995 Cuba Place-to-place September 1995 November 1995/ March 1996 Czech Republic Housing October 1995 November 1995 Ethiopia Housing November 1995 January 1996

17 Annex V - page 4. Duty station Type of survey Date of survey Survey materials received France, Paris Place-to-place November 1995 January 1996 Ghana Housing November 1995 February 1996 Jordan 2/ Housing September 1995 November 1995 Kuwait 1/ Housing January 1996 February 1996 Lesotho Housing November 1995 January 1996 Macao Housing October 1995 December 1995 Malaysia 1/ Housing November 1995 January 1996 Mauritania 1/ Housing November 1995 January 1996 Namibia 1/ Housing October 1995 November 1995 Nicaragua Housing September 1995 February 1996 Romania 2/ Housing October 1995 November 1995 Samoa Housing September 1995 February 1996 Sudan Place-to-place November 1995 January 1996 Suriname Place-to-place September 1995 November 1995/ January 1996 Swaziland I Housing I November 1995 I January 1996 Turkmenistan I Place-to-place I December 1995 I February 1996 United Kingdom Place-to-place November 1995 January / Results implemented effective 1 April / Results implemented effective 1 March / Results implemented effective 1 February 1996.

18 Annex V - pages C - i

19 Annex V - page 6 NOTES : Post adjustment classification based on government housing. 40 per cent of rent maximum subsidy limit has been waived. Abrupt devaluation. (Ten point rule) Ad hoc measures. change in exchange rate. Four-monthly review. Five per cent rule. Gap closure measures. Housing survey. One-month rule. Place-to-place survey. 12-month rule. 12-month rule continued rule. Ten point rule.

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21 Annex VI - page 2 INTERNATIONAL CIVIL SERVlCE COMMISSION DE LA FONCTION COMMISSION PUBLIQUE INTERNATIONALE..:-, ,,--.,. -- In a letter dated 24 July 1996 the Assistant Director-General for Management and Administration of UNESCO, Mr. Nobuaki Tanaka, informed me of your decision to submit the issue of automatic application of the decisions and recommendations of the International Civil Service Commission (ICSC) to the Executive Bead of UNESCO at its l50th session to be held in October In the same letter, Mr. Tanaka also informed me of your decision to suspend the application of the May 1996 post adjustment classification arising from the November 1995 place-to-place survey. At its recently concluded forty-fourth session, I brought the issues raised by your decision to the attention of the Commission in the context of its responsibilities under article 17 of its statute whereby the Commission is mandated to submit a report to the General Assembly, inter alia, on the implementation of its decisions and recommendations by the participating organizations of the common system. A copy of the Commission s report to the fifty-first session of the General Assembly on the above issue is attached herewith. Yours sincerely,

22 ACTION TAKEN BY THE COMMISSION ARTICLE 17 OF ITS STATUTE UNDER Annex VI - page 3 Implementation of the decisions and recommendations of the Commission: Post adjustment classification for Paris applicable to the staff of UNESCO 1. As part of the normal operation of the post adjustment system, a place-to-place cost-ofliving survey was conducted by the Commission in Paris in November The survey data were reviewed by ACPAQ at its March 1996 session and the results based thereon were subsequently approved by the Commission at its April 1996 session. The Commission also agreed on an implementation date of 1 May 1996 for the survey results. The PAI based on the survey was 2.4 per cent higher than the existing PAI. The ICSC Chairman promulgated the revised post adjustment classification based on the survey results effective 1 May 1996 by way of the post adjustment circular memorandum for May At the July/August 1996 session of the Commission, its Chairman informed members that he had received a letter dated 24 July 1996 from the Assistant Director-General for Administration and Management of the United Nations Educational, Scientific and Cultural Organization (UNESCO) stating that the Director-General had decided: (a) to submit the issue of automatic application of the decisions and recommendations of ICSC to the UNESCO Executive Board at its 150th session to be held in October 1996; and (b) to suspend, in the meantime, the application of the revised PAC for Paris which had become effective as of 1 May Views of UNESCO 3. The representative of UNESCO reaffirmed the position of the UNESCO Director- General as set forth above. She pointed out that in the past UNESCO had systematically applied the decisions of the Commission on matters covered by its Statute. UNESCO had also implemented most of the Commission s recommendations. However, the Director-General could no longer agree to the automatic absorption of any cost increases resulting from ICSC decisions and recommendations within existing financial resources. Nor would he be able to implement an automatic across-the-board increase in remuneration at the current juncture should a decision to that effect be taken by the General Assembly at its fifty-first session. One of the Director-General s major concerns in coming to this conclusion was the fact that UNESCO should not at the current critical juncture for international development cooperation be forced to divert sorely needed programme resources towards meeting increases in staff costs. 4. In response to a series of questions from the Commission, the representative of UNESCO indicated that the Director-General was fully aware of the relevant provisions of the Statute of ICSC and the possible legal consequences arising from non-implementation of the Commission s decisions with respect to the post adjustment for Paris; as an executive head facing a critical situation, he could not accept the automatic application of decisions which could be detrimental to his Organization s programme implementation. The Director-General intended to submit to the UNESCO Executive Board the general issue of the automatic implementation of ICSC decisions and recommendations and subsequent action by the United Nations General Assembly. This consultation would not be limited to Commission decisions on post adjustment classification, but would include any ICSC decision or recommendation

23 Annex VI - page 4 with significant financial implications, such as an eventual across-the-board increase. As to whether consideration had been given to other means of incurring savings, UNESCO was currently reviewing all posts in an effort to find ways to cut staff costs. Lastly, the Director- General could not advance his consultations with the Executive Board by meeting with them before October 1996 and on the broader issues referred to above, was prepared, if necessary, to address the UNESCO General Conference. Discussion by the Commission 5. The Commission first reviewed the legal context attaching to the issue. The ICSC Statute, inter alia, established the legal framework for the organizations responsibilities visà-vis ICSC, the common system and the staff. It was recalled that UNESCO had entered into a relationship agreement with the United Nations in December 1946, ranking it among the earliest members of the United Nations family and the common system. When UNESCO accepted the ICSC Statute in June 1975, it was also among the first organizations to do so. All organizations which had accepted the ICSC Statute were legally bound by the provisions of the Statute and had an obligation to implement the decisions of the Commission, There was no reason for UNESCO to consider that it could be exempt from fulfilling these obligations. 6. Particularly relevant in the current context was Article 1 l(c) of the Statute which entrusted ICSC with the sole responsibility of classifying duty stations for the purpose of applying post adjustments. The Commission recalled that while under Article 18, paragraph 2, of its Statute the responsibility for taking decisions as regards the day-to-day operation of the post adjustment system was delegated to its Chairman, in the case at hand, the decision on the implementation of the revised post adjustment classification for Paris had been taken by the Commission as a whole, Furthermore, the Commission had complied fully with Article 25 which established procedures for the promulgation, notification and implementation of ICSC decisions. 7. The Commission next recalled Article 26 of its Statute which called upon it in making its decisions and recommendations, and the executive heads, in applying them, to do so without prejudice to the acquired rights of the staff under the staff regulations of the organizations concerned. In two recent cases, the ILO Administrative Tribunal had found that it was the responsibility of executive heads to ensure that the decisions of the Commission were based on approved methodologies, under the authority granted to it, and that those decisions were thus legally valid. The UNESCO Director-General had had the opportunity to ensure the validity of the above decision of the Commission as the representatives of that organization had been present both when the Paris survey was considered by ACPAQ and when the Commission took its decisions on the matter. 8. The Commission recalled that only in rare circumstances had an executive head deferred implementation of a particular decision of the Commission owing to financial problems; however, once the financial issue was resolved, implementation had taken place on the date originally due. Under rule 33 of its Rules of Procedure, neither the Commission nor any member to whom a function had been delegated shall make 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 adjustment, before having sought the views of the executive heads of the participating organizations concerned on the financial and administrative implications of implementing that determination. The Commission wished to

24 Annex VI - page 5 reiterate that it had taken its responsibilities in that regard very seriously. While the Commission took into account the financial impact of its decisions and/or recommendations, its decision-making process could not be driven by financial impact, nor by the financial problems faced by one or more organizations affected by those decisions. It was important that a distinction be made between responsible decision-making under the authority and mandate of the Commission and budgetary constraints. The role of the Commission was to arrive at a competitive remuneration package to enable the organizations to recruit and retain staff meeting the highest standards of efficiency, competence and integrity. The Commission considered that the entire common system would be placed in jeopardy if organizations used internal financial, or other, crises to justify the non-implementation of ICSC decisions. 9. Bearing in mind the jurisprudence of the ILO Administrative Tribunal, particularly in some of the recent cases, the Commission was convinced that if the decision of the UNESCO Director-General was challenged by staff, only one outcome could be anticipated; under those circumstances the eventual cost to the Member States would be considerably higher. The UNESCO Director-General did not simply decide to defer implementation of the Commission s decision regarding the revised post adjustment classification on the basis of financial constraints. Instead he had gone on to raise the issue of the automatic application of ICSC decisions and recommendations, which he intended to take up with the Executive Board. This was tantamount to challenging the authority granted to the Commission under its Statute and struck at the very heart of the compact between the Member States, the executive heads and the staff bodies. Conclusions of the Commission 10. The Commission noted that UNESCO had heretofore always respected ICSC decisions and supported the common system. It was regrettable that an organization which played an important role in human development did not now see fit to consider the demoralizing effect of its action on the staff of UNESCO and respect its obligations towards the common system. UNESCO s non-compliance with the ICSC decision was a violation of the Statute which deprived staff of their right to receive the appropriate post adjustment in accordance with the provisions of Article 11(c ) of the Statute. UNESCO s action at the press time concerned ICSC s decision with respect to the implementation of the post adjustment for Paris applicable to UNESCO staff. However, a significantly larger issue, i.e. that of the authority of the Commission to take decisions within the framework of the Statute and the obligation of the organizations to implement such decisions, had been raised. The Commission hoped that the UNESCO Director-General would reconsider his decision. 11. The Commission requested its Chairman to communicate its unanimous views to the UNESCO Director-General.

25 Annex VII ANNEX VII POSSIBLE UPCOMING CHANGES IN COMMON SYSTEM SALARIES, ALLOWANCES AND BENEFITS 1. It will be recalled that, in its annual report for 1995, the Commission recommended to the United Nations General Assembly that the net base salaries of staff in the Professional category and above be increased in 1996 by 4.1 per cent on average. The General Assembly, at its fiftieth session (1995), decided to defer its consideration of this portion of the report of ICSC to its resumed fiftieth session, and requested the Commission to review its above-cited recommendations and conclusions, focusing on specified technical aspects. The Commission, at its forty-third session (April/May 1996), carried out the requested review and confirmed the technical validity of its 1995 recommendations. Contrary to earlier indications, the General Assembly has now deferred consideration of this issue to its fifty-first session (September/December 1996), at which time it will have before it the Commission s updated recommendations on this matter in its annual report for 1996, as briefly described below. 2. Taking into account its 1995 recommendations and increases in pay levels in the federal civil service of the United States in Washington, D.C. (the comparator used for salary determination for staff in the Professional category and above), the Commission is recommending to the General Assembly that a revised net base salary scale be introduced on 1 March The revised scale would represent (a) an increase of per cent across the board, without a corresponding consolidation of post adjustment; (b) a further differentiated increase at various grades and steps of 1 per cent on average, to implement the proposals for the restructuring of the scale in the Commission s 1995 report; and (c) a consolidation of 2.51 percentage points of post adjustment on a no-gain, no-loss basis. In view of his concerns for the eventual negative impact of such a measure on programme implementation, the Director-General has indicated that he would be unable to implement automatically an increase in remuneration at this juncture. 3. In its annual report for 1996, the Commission is also recommending (a) varying increases in the maximum level of the education grant in seven currency areas, to take effect from the school year in progress on 1 January 1997, based on data from education grant claims for the 1994/1995 school year and movements in school fees since the previous review; (b) a 7.98 per cent increase in the children s and secondary dependant allowances for staff in the Professional category and above, effective 1 January 1997, based on the increase in the value of tax abatements and payments under social legislation at the seven headquarters duty stations between 1993 and the current review; (c) a common scale of staff assessment for all staff (as opposed to the separate staff assessment scales now in effect for staff in the Professional category and above and staff in the General Service and related categories) to be introduced effective 1 March 1997, which is expected to lead to some savings over time. 4. In accordance with the adjustment procedure approved by the General Assembly at its forty-fifth session (1990), and with Article 54(b) of the Regulations of the United Nations Joint Staff Pension Fund, the scale of pensionable remuneration for staff in the Professional category and above is adjusted by the same percentage and as of the same effective date as net remuneration for this category of staff in New York. In practice, this means that the scale of pensionable remuneration is revised on the occasion of increases in the post adjustment classification for New York. An increase of 6.4 per cent was effected on 1 November 1995, based on the 12-month movement of the local cost-of-living index used for post adjustment

26 Annex VII - page 2 and related factors. The resulting increase in pensionable remuneration was applied by UNESCO. A similar but considerably lower increase is expected on 1 November Financial implications arise for the Organization since pension contributions are based on pensionable remuneration. 5. To complete the picture, mention should also be made of salary adjustment procedures for staff in the General Service and related categories. Remuneration for such staff is based on best prevailing local conditions of employment, which are determined by means of periodic salary surveys conducted under the responsibility of the secretariat of ICSC. Based on these surveys, the Commission makes recommendations to the organizations concerned on a revised salary scale, where appropriate, as well as procedures for the adjustment of the scale until the next salary survey and dependency allowances. At UNESCO, these recommendations are submitted to the General Conference for decision, with the accompanying views of the Director-General. 6. Accordingly, at its twenty-seventh session (1993), by 27 C/Resolution 31, the General Conference authorized the Director-General, inter alia, to adjust the salary scale for staff in the General Service and related categories, under specified conditions, based on the movement of the general quarterly hourly wage index for non-manual workers published by the French Ministry of Labour.