Judgment No. 4580
Decision
The complaints are dismissed, as are the applications to intervene.
Summary
The complainants challenge the increase in their contributions to the Pension and Provident Fund such as it appears on their payslips for January 2021.
Judgment keywords
Keywords
retirement; contributions; complaint dismissed; contribution rate
Consideration 3
Extract:
The complaints, for which the same submissions were filed, seek the same redress and are based on the same arguments. They may therefore be joined to form the subject of a single judgment.
Keywords
joinder
Consideration 4
Extract:
In support of their claims, the complainants first submit that their right to an effective internal appeal was breached in that the Appeals Committee’s opinion of 10 June 2021 did not properly address their plea alleging unlawful infringement of their acquired rights, the central element of their appeal submissions. They criticise the Committee for not stating why it rejected that plea and simply leaving it to the Tribunal to rule on its merits. However, although it is true that the Appeals Committee stated in its report that “this question must be settled by the [Tribunal]” – with the apparent intention of making clear that only the Tribunal could provide a conclusive reply – it also stated that it “[was] of the view that [...] the combined measures leading to the retirement contribution rate rising from 14.5 per cent to 15.5 per cent [did] not breach acquired rights”, having justified that finding by reference, in particular, to the Tribunal’s case law setting out the applicable legal tests. The complainants are therefore wrong to argue that the Appeals Committee did not properly address the plea in question.
Keywords
report of the internal appeals body
Consideration 7
Extract:
[I]t should be borne in mind that, under Article 31 of the Vienna Convention of 23 May 1969 on the Law of Treaties, for the purposes of interpreting – and hence applying – a treaty, account should be taken of “any subsequent agreement between the parties regarding the interpretation of the treaty or the application of its provisions” and “any subsequent practice in the application of the treaty which establishes the agreement of the parties regarding its interpretation”. The shared intention of the States parties to the Metre Convention to dispense with the rule concerning the renewal of half the CIPM might thus allow the new practice adopted by the General Conference to be recognised as lawful, even though it breaches the letter of certain provisions of the Regulations.
Keywords
interpretation
Consideration 9
Extract:
[I]t is important to note that, contrary to what the complainants submit, the disputed increases in the contribution rate, which have the effect of reducing their net salary, do not influence the amount of the pension they will ultimately receive and affect them only as serving staff members, not future retirees. As the Tribunal observed when ruling on the complaint filed by a former BIPM staff member also directed against measures resulting from the 2016 reform of the Pension and Provident Fund, decisions concerning deductions from employment income made with a view to the acquisition of pension entitlements have a different purpose than those affecting the amount of a pension (see Judgment 4277, consideration 15). A breach of acquired rights owing to the effect of a new decision can only be determined by reference to the situation resulting from previous decisions with the same purpose (see Judgment 986, consideration 16 in fine). The complainants cannot therefore seek to rely, as they attempt to do, on a breach of the acquired rights they will have as future retirees.
Reference(s)
ILOAT Judgment(s): 986, 4277
Keywords
cause of action; acquired right; retired official
Consideration 11
Extract:
It is recalled that the staff members of international organisations are not entitled to have all the conditions of employment laid down in the provisions of the staff rules and regulations in force at the time of their recruitment applied to them throughout their career. Most of those conditions can be altered during an employment relationship as a result of amendments to those provisions (see, for example, Judgments 4465, consideration 8, 3876, consideration 7, and 3074, consideration 15). Of course, the position is different if, having regard to the nature and importance of the provision in question, a complainant has an acquired right to its continued application. However, under the Tribunal’s case law, the amendment of a provision governing an official’s situation to her or his detriment constitutes a breach of an acquired right only where such an amendment adversely affects the balance of contractual obligations or alters fundamental and essential terms of employment in consideration of which the official accepted an appointment, or which subsequently induced her or him to stay on. For there to be a breach of an acquired right, it is therefore necessary for the amendment to affect a term of employment that is fundamental and essential (see, for example, Judgments 4398, consideration 11, 4381, considerations 13 and 14, and aforementioned 3074, consideration 16, and the case law cited in these judgments).
Reference(s)
ILOAT Judgment(s): 3074, 3876, 4381, 4398, 4465
Keywords
acquired right
Consideration 13
Extract:
In respect of the application of the principle of acquired rights to increases in pension contributions, a long line of precedent establishes that “whereas the right to a pension is no doubt inviolable, a pension contribution is by its very nature subject to variation [...]. Far from infringing any acquired right a rise in contribution that is warranted for sound actuarial reasons [...] actually affords the best safeguard against the threat that lack of foresight may pose to the future value of pension benefits” (see Judgments 3538, consideration 10, 2633, consideration 7, or 1392, consideration 34). It follows that, where a decision to alter a pension scheme is taken on grounds of financial necessity, such as the need to address the rising cost of pensions, the Tribunal cannot consider it to be invalid for the sole reason that it leads to a situation less favourable to staff members (see aforementioned Judgment 2633, consideration 7).
Reference(s)
ILOAT Judgment(s): 1392, 2633, 3538
Keywords
acquired right; retirement; contribution rate
Consideration 15
Extract:
[T]he Tribunal has already ruled that a provision concerning an organisation’s contributions to a staff pension scheme affects staff members’ interests too indirectly to give rise to an acquired right (see Judgment 429, consideration 9). The same is bound to apply to a provision providing for the payment of such subsidies by the organisation concerned. Moreover, it should be borne in mind that Article 3.1 of the Regulations of the Fund provides that “[a]ny pensions [...] shall be charged to the budget of the BIPM”, and Article 3.2 adds that “[t]he Member States of the BIPM shall jointly guarantee the payment of the pensions”, which represents the fundamental safeguards that, as the Tribunal has already observed in its case law, may be afforded to staff members in this area (see also, on this point, aforementioned Judgment 429, consideration 9).
Reference(s)
ILOAT Judgment(s): 429
Keywords
acquired right; retirement
Consideration 19
Extract:
[T]he Tribunal reiterates, in respect of the supposed “flimsiness” of the actuarial studies at issue, that it is not its role to substitute its assessment for that of an expert such as an actuary unless that assessment is affected by a blatant error (see [...] Judgments 4278 and 4277, considerations 16 and 20 respectively, and the case law cited therein). The complainants’ line of argument regarding these studies, which consists in drawing attention to the hypothetical nature of particular data used therein – which the very nature of such studies makes inevitable – does not establish the existence of such a blatant error.
Reference(s)
ILOAT Judgment(s): 4277, 4278
Keywords
expert inquiry; judicial review; discretion; actuary
Consideration 20
Extract:
As the Tribunal held in aforementioned Judgment 3538, consideration 15, and repeated in Judgment 4422, consideration 14, and [...] Judgments 4277 and 4278, “the power clearly vested in [an organisation’s competent authority] to alter the pension scheme can be exercised lawfully if it represents a bona fide attempt to secure the pension scheme into the future and is based on what appears to be properly reasoned actuarial advice”. The CIPM decision of 14 December 2016 satisfies these criteria.
Reference(s)
ILOAT Judgment(s): 3538, 4277, 4278, 4422
Keywords
acquired right; retirement
Consideration 21
Extract:
The complainants [...] submit that the pension contribution rate at the BIPM is now higher than the rates applied at other international organisations. However, as the complainants’ observation that the BIPM has thereby become less attractive further illustrates, this is in any event an argument based on policy, not law. From a legal perspective, the principle of equal treatment requires only that staff members be subject to the same rules if they are in identical or similar situations (see, for example, aforementioned Judgment 4277, consideration 21, and Judgments 3029, consideration 14, or 1990, consideration 7). This is plainly not the case for the staff members of different organisations who by definition are not governed by the same staff rules.
Reference(s)
ILOAT Judgment(s): 1990, 3029, 4277
Keywords
equal treatment; contribution rate
Consideration 22
Extract:
[I]n their rejoinder the complainants submit that the BIPM breached its duty to act in good faith towards them as it did not inform them at the time of their recruitment or during their employment that their contributions to the pension scheme were liable to increase significantly over time. However, the complainants could not be unaware of the risk that contributions would increase in line with financial necessity, which characterises all social insurance schemes to a greater or lesser extent.
Keywords
good faith; duty to inform
Consideration 5
Extract:
[T]he complainants criticise the Director for having considered in his decisions of 9 July 2021 that their appeals were irreceivable because they were in his view time-barred. They submit that the decisions involved an error of law on that point.
It is true that this particular reason for rejecting the complainants’ claims – namely, that the disputed increase in contributions was simply part of the ongoing implementation of the aforementioned CIPM decision of 14 December 2016, and the decision in 2018 dismissing the complainants’ appeals against a previous increase in contributions resulting from the same reform was final – is debatable. However, the Tribunal notes that the decisions of 9 July 2021 were also based on the Director’s finding that the complainants’ appeals were unfounded. That second reason for dismissal plainly suffices of itself, and the possible flaw tainting the first reason therefore has no bearing on the lawfulness of those decisions in any event (see, for example, Judgment 4507, consideration 7). The complainants’ plea is therefore irrelevant.
Reference(s)
ILOAT Judgment(s): 4507
Keywords
inadmissible grounds for review
Consideration 8
Extract:
Mais, si les conditions dans lesquelles il a été procédé au renouvellement du CIPM étaient ainsi incontestablement irrégulières, le Tribunal estime qu’il n’en résulte pas pour autant, compte tenu des observations qui précèdent, que cette irrégularité constituerait un vice substantiel justifiant que le Tribunal déclare illégales les décisions subséquentes édictées par ce comité. Cette conclusion s’impose d’autant plus que l’irrégularité en cause n’affecte en rien les droits des fonctionnaires de l’organisation, dans la mesure où le mode de renouvellement du CIPM est sans rapport avec les garanties dont ils jouissent.
Keywords
flaw; formal flaw; procedural flaw
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