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Cont'd

2. DIRECTOR OF ADMINISTRATION AND THE GRIEVANCE PROCEDURE REQUIREMENTS

Reference has already been made to the provisions of the Grievance Procedure which set out what is required after a finding by an Investigator that "there is sufficient evidence to sustain the complaint" of a person who has, like the Applicant, invoked the mechanisms of the formal grievance process. As noted above, it was submitted on behalf of the Applicant that upon receipt of the Investigator's finding, Mr Faruqi was entitled to have the decision that had been found to be in breach of the Staff Regulations and Rules reversed. However, rather than acting in this way the Director of Administration took other actions which were, in the Applicant's view not in accord with the Grievance Procedure.

The Tribunal has now stated its view as to the nature of the finding that the Investigator did make on the basis of the evidence before her. It was a finding, which under the terms of the Grievance Procedure required the Director of Administration to "take such action as is necessary to have the matter resolved in accordance with the rules, practice and procedures". The Grievance Procedure is constructed in flexible terms. It does not mandate the reversal of a decision, nor does it indicate that the Director of Administration must act alone in dealing with the matter. In fact the Grievance Procedure says quite specifically that the Director of Administration may consult with "the DSG (political) and/or the Secretary-General for the purpose of determining an appropriate means of rectifying the error or resolving the complaint".

What the Director of Administration did in the Applicant's case, following the receipt of the Investigator's report and finding, was to refer the matter back to the Secretary­General for his re-consideration. The question then becomes whether this was an action on his part which was in accord with the provisions of the Grievance Procedure, and the Staff Regulations and Rules at large.

In determining whether or not the Director of Administration acted in an appropriate manner, the Tribunal must apply the principles which have been outlined earlier, drawn from the decision in In re Ballo.

The Respondent contended that the Director of Administration had no option but to act in the way that he did. The Director of Administration had no power to quash a decision made by the Secretary-General in regard to the Applicant, nor to substitute his decision for that of the Secretary-General. The Director of Administration also had no power to offer the Applicant a new contract of employment.

The nature of the power flowing to the Director of Administration in general is to be found in the Staff Regulations and Rules adopted by member governments. The following provisions are of particular relevance:

"Regulation 10
Senior staff members may be engaged either on contract or by secondment from their present employers.

Regulation 11
The appointment and tenure of office of the Secretary-General and Deputy Secretaries-General are determined by Heads of Commonwealth Government.

The Secretary-General, in accordance with the provisions laid down in the Agreed Memorandum on the Commonwealth Secretariat of July 1965, has authority to make appointments of staff members below the grade of Deputy Secretary-General, but appointments to the staff are subject to clearance to the extent that their own governments raise no objection ....

Regulation 26
The Secretary-General may delegate to its Deputy Secretary-General any duty which the Secretary-General is required by these regulations to undertake" (Volume 2, Tab 4, pages 13-14,47).

Having regard to these Regulations, and to the Grievance Procedure, the Tribunal is satisfied that the Director of Administration exercised his responsibilities in a lawful manner when he did refer the matter to the Secretary-General for his re­consideration. The limited delegation power which is permitted under the Regulations is restricted to the DSG's. Thus, there was no lawful way by which the Director of Administration could have taken his own decision about the granting of a new contract to the Applicant. In this regard the provisions of the Grievance Procedure could also not grant additional jurisdiction to the Director of Administration in a manner which would be plainly contradictory to the Regulations of the Commonwealth Secretariat which have been adopted by all member governments.

An appraisal of the Grievance Procedure Rules shows that they are, within their particular constraints, intended to be flexible and to allow the Director of Administration to adopt a remedy that would be most appropriate in the circumstances. It is equally clear that in the present case the power to take the decision in question rested solely with the Secretary-General, and the only lawful way in which to resolve the matter was to refer the decision back for re­consideration by the Secretary-General. The Director of Administration's actions were reasonable, not arbitrary, and exercised in accordance with the internal law of the Commonwealth Secretariat. Further, they were not actions that amounted to a breach of contract as contended by the Applicant.

3. RECONSIDERATION BY THE SECRETARY GENERAL

Having determined that there was a lawful referral by the Director of Administration to the Secretary-General, attention must now be given to his re-consideration of the decision not to grant Mr Faruqi a new contract. The full text of this re-consideration, as already stated, is to be found in Appendix II. In undertaking this review it is important to re-emphasise that the Tribunal's role and function is not to determine whether the ultimate decision was justified on the merits, but rather to ensure that the discretionary power exercised by the Secretary-General was lawful, within the meaning of the principles identified in In re Ballo.

It was the Applicant's contention, as outlined above, that the Secretary-General was bound by the finding of the Investigator. It was not open to him to now maintain his decision, on the basis no breach had occurred of Staff Regulations and Rules, by advancing a new construction of these Rules. Further, he was estopped from now putting forward a different construction given that all parties had proceeded on the basis of a common assumption about the interpretation of these Rules.

The Tribunal has already indicated its views about the interpretation given to the Rotation Policy by the parties, and the Investigator. On the basis of the evidence before it the Tribunal is satisfied that there was not a common assumption about this interpretation at the time of the Investigator's inquiry, nor was there any basis for the suggestion that the Secretary-General had up until the time of the inquiry and during its conduct preferred any construction of the Rules other than that cumulative service was the relevant factor under the Rotation Policy.

In the absence of a common assumption about the interpretation of the Rotation Policy, and in the light of the limited finding of the Investigator in her report, the Tribunal can find no support for the Applicant's contentions that the Secretary­General either changed his construction of the Rotation Policy or was estopped from advancing a different construction. The Investigator did not in her findings make any determination as to the construction of the Rotation Policy. The doctrine of estoppel can only operate in such a situation if there has been a clear understanding of the issues upon which a determination has been made and which are binding upon the parties. This is not the situation which is to be found in the present case.

In both his written and personal testimony to the Tribunal the Secretary-General described the way in which he went about undertaking his re-consideration following the referral to him of the Investigator's report by the Director of Administration on 18 May 2001. The Secretary-General said that having read the Investigator's report he considered that her finding took him back to the contents of the Rotation Policy and its spirit and intention:

"At this stage, the question for me was whether the Policy operated so as to disallow its application in cases where there has been a break in service of a member of staff. I considered that if this was the case, the intention of rotation would be defeated, in that staff could arrange to take short breaks, leave the Secretariat's employment and collect terminal benefits and then come back and claim that they were starting anew, and therefore that the Rotation Policy did not apply to them. I did not understand this to be the way member governments expected me to implement the Policy. I determined that the Policy was intended to apply cumulatively to the whole period that a staff member spends in the Secretariat because the idea behind the policy is that employees of the Commonwealth Secretariat are expected to serve the Organisation for a limited number of years after which they are expected to return to their home countries and utilise the experience they have gained while working with the Organisation. I therefore concluded that the finding of the Investigator did not mean that I was estopped from applying the Rotation Policy to Mr Faruqi's case" (Volume 2, Tab 36: paragraph 22).

The relevant issues and considerations which were addressed by the Secretary­General at the time of undertaking his re-consideration of the decision not to grant Mr Faruqi a new contract are set out in substantial detail in the document re­produced in Appendix II. It will be seen that as a component of this re-consideration the Secretary-General took account of Mr Faruqi's performance. In both his written and personal testimony the Secretary-General told the Tribunal that at the time of his meeting with Mr Faruqi on 6 November 2000, he had referred to the issue of performance. Mr Faruqi, on the other hand, denied that performance had been raised at this meeting. He also stated that the meeting had taken place on 5 November 2000, rather than 6 November 2000.

In his personal testimony, the Secretary-General said that at the time of this meeting with Mr Faruqi he was in a quite emotional state, and that he could only believe that Mr Faruqi's failure to recall that he had raised the issue of performance with him could be accounted for by this situation. The Secretary-General also explained that when writing to Mr Faruqi on 14 December 2000, confirming his decision not to offer him further employment, he had not included any reference to the issue of performance because he had not wished

" ... to taint Mr Faruqi's future career and professional standing by raising in writing his performance deficiencies. He knew and all concerned knew that there was a problem with his performance but with a generous spirit I decided not to raise the issue in writing" (Volume 2, Tab 36: paragraph 14).

Having heard both parties' personal accounts of what was said at the meeting between the Applicant and the Secretary-General in November 2000, and also taking account of the other documentary evidence presented, the Tribunal prefers and accepts the Secretary-General's testimony in regard to both the raising of performance as an issue, and the date of the meeting. It should also be noted that when writing again to Mr Faruqi on 12 January 2001, about his invocation of the Grievance Procedure, the Secretary-General did mention in writing his concerns about Mr Faruqi's performance. The Secretary-General indicated at this point that he continued to hold a firm view that the Rotation Policy did apply to Mr Faruqi so that he was not entitled to further contracts, but had his performance been exemplary he might have exercised his discretion in his favour.

Having given very careful consideration to the entire circumstances surrounding the Secretary-General's re-consideration of his decision about the granting of a contract to the Applicant, the Tribunal is of the view that he undertook this task in a lawful manner. The re-consideration document of 23 May 2001 indicates that when making his decision the Secretary-General took account of all of the essential facts while applying the relevant Regulations and Rules of the Commonwealth Secretariat. He exercised his discretionary power within the scope of his authority including that of taking account of the Applicant's performance. The Rotation Policy allowed him to do this and the Secretary-General indicated that he remained concerned about Mr Faruqi's managerial abilities. This was not, however, the principal reason for the ultimate decision reached by the Secretary-General not to renew Mr Faruqi's contract. The Tribunal can find no grounds upon which it could justify a finding that in reaching this decision the Secretary-General had breached the contractual rights of the Applicant.

Reinforcement for the Tribunal's views about this issue can be found in the recent decision of M.H.J. and the International Atomic Energy Agency (IAEA) (ILOAT 2138, 2002). The IAEA possessed a rotation policy for professional staff not dissimilar to that of the Commonwealth Secretariat. Applying that policy, the Director General of the IAEA declined to extend the contract of service of Mr M.H.J. (the Complainant) despite a finding of an internal Joint Appeals Board recommending that the Director General reconsider this decision. In upholding the Director General's decision, and dismissing the Complainant's application, the ILOA T determined that an IAEA staff member like Mr M.H.J. who fell within the ambit of the rotation policy had no automatic entitlement to a further longer term contract:

"A long-term contract is given at the sole discretion of the Director General after the latter has considered several factors outlined in paragraph 8 of the [Staff] notice. The passage from the letter of 25 October 2000 quoted above shows clearly that paragraph 8 was specifically considered before the Director General came to the conclusion that an extension was “not warranted in the complainant’s case.

Lastly, the complainant can take no comfort from the case of another staff member in a somewhat similar situation who was given a long-term contract. As indicated, the awarding of such contracts is exceptional and wholly discretionary and the fact that a contract is granted to one staff member creates no rights for any other staff member." (M.H.J. and The IAEA, ILOAT 2138 (2002): paragraphs 11-12).

This ILOAT decision makes it quite clear that when exercised in a lawful manner, discretionary power of the type incorporated in both the IAEA and Commonwealth Secretariat's rotation policies will not be interfered with by an international arbitral tribunal. In Mr Faruqi's case the Secretary-General was entitled to consider the spirit and intention of the Rotation Policy when interpreting its scope and application. The interpretation favoured by the Secretary-General was, quite appropriately, one which maintained the integrity and viability of a policy which had received the endorsement of all member governments of the Commonwealth.

4. LEGITIMATE EXPECTATION

In his written statement, and in the course of his personal testimony to the Tribunal, Mr Faruqi referred to an expectation that he had when re-joining the Commonwealth Secretariat in December 1997 that he would be entitled to two (2) three (3) year terms taking him up to 6 December 2003 (Volume 3, Tab 2: paragraphs 37-39).

In the course of his personal testimony, Mr Faruqi said that he had received an assurance from the former Secretary-General, Chief Anyaoku, at the time of returning to the Commonwealth Secretariat in December 1997, that he would be able to continue in employment until the time of his retirement. He said that if he had not had such an understanding, and assurance, he would either have stayed with the World Bank or moved to another organisation where he could have gained security of employment until retirement.

The Tribunal finds it difficult to accept Mr Faruqi's testimony on this matter. If the former Secretary-General had given such an assurance it would seem almost certain that he would have raised it in writing or mentioned it to his successor, Mr McKinnon. Instead, the former Secretary-General offered Mr Faruqi a one (1) year contract in June 2000, and the expressed reason for that limited contract was to give his successor an opportunity to consider the senior staff compliment and to make his own decisions regarding personnel. Mr Faruqi accepted that one (1) year contract without making any mention of the assurance that he claimed to have been given by the former Secretary-General. Further, Mr Faruqi made no mention of this assurance in his conversation with Mr McKinnon on 6 November 2000, nor did he raise it in subsequent correspondence which led up to the initiation of the formal Grievance Procedure. The assurance was also not referred to in the interview that Mr Faruqi had with the independent Investigator and the Investigator herself makes no mention of it in her report.

The former Secretary-General was not called upon by the Applicant to provide a witness statement nor to give personal testimony to the Tribunal. In addition, during the course of the personal testimony provided by Mr McKinnon, no questions were directed to him by the Applicant concerning this particular issue. In these circumstances the Tribunal has given no weight or credibility to the Applicant's statement about this alleged assurance and his expectations that flowed from it. Additionally, the Tribunal can find no basis upon which Mr Faruqi could have had a legitimate expectation, at the time of his return to the Commonwealth Secretariat in December 1997, that he would be entitled to and receive two (2) three (3) year contracts which would extend his service beyond his retirement age.

CONCLUSION

The principle issue requiring resolution remains that of determining whether or not a breach of contract has occurred as a result of the various matters which have been under consideration in this judgment. The Tribunal concludes, on the basis of all of the evidence, that there has not been any breach and that in accord with the principles of international administrative law, and the particular provisions of the internal law of the Commonwealth Secretariat, the discretionary powers exercised by the Secretary-General in reaching a decision not to renew Mr Faruqi's contract were conducted in a lawful manner. As a consequence of this ruling the Applicant is not entitled to be compensated for any damage pursuant to Article X of the Statute.

Given on this 22"d day of November 2002 in London

Signed:


Professor Duncan Chappell President

Anesta Weekes Q.C. Mr Justice Hassan B. Jallow

The Appendices to this judgment may be available, in hard copy only, on request from the Tribunal Secretary.