Jairo Torres et al Secretary General of the Organization of by jennyyingdi

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									                                            Judgment No. 124


Complaint No. 192
Jairo Torres et al. v. Secretary General of the Organization of American States


THE ADMINISTRATIVE TRIBUNAL OF THE ORGANIZATION OF AMERICAN STATES,
Composed of Enrique Ponce y Carbo, President; José Ajuricaba da Costa e Silva, Vice President; and
Enrique Rojas Franco, Judge,

Has before it for judgment the proceedings in the complaint filed by Jairo Torres and 556 staff
members, past and present, against the Secretary General of the Organization of American States.

The Complainants were represented by Robert B. Wallace, attorney of the firm Wilson, Elser,
Moskowitz, Edelman & Dicker, and, for purposes of the case, declared their domicile to be the Staff
Association of the Organization of American States, Office 860, 1889 F Street, N.W., Washington,
D.C., 20006; the Secretary General was represented by William M. Berenson, attorney of the
Secretariat for Legal Affairs.

WHEREAS:

      I. On December 2, 1991, the attorney for the Complainants filed a complaint against the
Secretary General and the General Assembly of the Organization of American States, as authorized
under Article II of the Statute of the Administrative Tribunal. The attorney for the Complainants
stated, inter alia, the following:

     That he is filing the complaint against the Secretary General in the latter's capacity as the legal
representative of the member states, and against the General Assembly of the Organization of
American States.

     That the decision being challenged is the Secretary General's failure to comply with the salary
policy in respect of cost-of-living adjustments agreed upon between the staff and the General
Secretariat of the Organization of American States and the General Assembly's approval of
conflicting resolutions and, in particular, its refusal to grant a cost-of-living salary increase to the staff
of the General Secretariat for the 1992-1993 biennium.

    The attorney summarized the facts as follows:

     That in July 1969 the Permanent Council approved a resolution in which it decided to accept, in
principle, parity with the United Nations in remunerations and working conditions.

     That in July 1970 the General Assembly decided to confirm, "as a general standard, . . . parity
with the United Nations in remunerations and working conditions."

     That parity ceased to be routinely applied in mid-1976.


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     That in November 1978, in Judgment No. 37, the Administrative Tribunal ruled that parity with
the United Nations in remunerations and working conditions is a contractual stipulation that cannot be
rescinded unilaterally.

     That in 1978 the General Assembly adopted resolution AG/RES. 383 (VI-E/78), in which it
resolved that "parity with the United Nations does not correspond to the financial reality of the
Organization."

    That in November 1980, the General Assembly adopted resolution AG/RES. 498 (X-O/80),
which established the guidelines to be followed in formulating a new salary policy.

     That in June 1981 the Secretariat submitted to the Permanent Council the document "Guidelines
for the New Salary Policy for the Staff of the General Secretariat of the Organization"
(CP/doc.1177/81 and CP/doc.1177/81 add. 1).

     That in December 1981 the General Assembly adopted resolution AG/RES. 561 (XI-O/81), in
which it instructed the Secretary General to modify the programs and structure of the General
Secretariat and to make a substantial reduction of staff with a view to reducing the percentage
appropriation for approved posts in the Regular Fund from the then 62% to a maximum of 50%.

      That the staff filed another complaint with the Administrative Tribunal and in April 1982 the
Tribunal issued Judgment No. 64. That Judgment confirmed the elimination of parity, ordered the
payment of certain salary differentials to the Complainants, and ruled that the replacement of the
parity policy was contingent upon the acceptance of a new salary policy that had not yet been
approved.

      That General Assembly resolution AG/RES. 632 (XII-O/82) stated that pursuant to resolution
AG/RES. 498 (X-O/80), the Secretary General was to present the cost-of-living adjustment
supplement in each succeeding year and its adoption would be subject to approval by the competent
organs. It also stated that the Secretary General must first obtain a guarantee that the agreed-upon
measures were accepted by the staff, without any qualification or reservation whatsoever, with the
result that all claims deriving from or related to the elimination of parity as an objective would thus
be settled.

     That on May 10, 1983, in compliance with that resolution, the Secretary General and the
President of the Staff Association signed an "Agreement on the Implementation of a New Salary and
Emoluments System in Accordance with Resolution AG/RES. 632 (XII-O/82)" (CP/CPP-1697/83),
which applied the new salary scale proposed in document CP/doc.1177/81 add. 1 retroactively to
January 1983. As regards the cost-of-living adjustment supplement, the agreement stipulated:
In accordance with AG/RES. 498 (X-O/80) and AG/RES. 632 (XII-O/82), the comparator index
described in CP/doc.1177/81 will be used annually by the Secretary General as the basis for the
projected cost-of-living adjustment supplement to be included in the proposed program-budget
submitted for approval of the General Assembly.
     That in a referendum held on May 25, 1983, the staff approved the proposed salary system.



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    That on July 8, 1983, although the comparator formula called for a cost-of-living adjustment of
7.48% to bring OAS salaries to the level specified by the comparator, the Secretary General requested
a smaller percentage (4.93%) (AG/CP/doc.329/83).

     That at its November 1983 session, the General Assembly rejected the proposed cost-of-living
adjustment and approved a 3% increase.

    That the Complainants filed a complaint with the Administrative Tribunal arguing a failure to
honor the Agreement; in November 1985, Judgment No. 91 denied the petition.

      That in June 1991, in its resolution on the 1992-1993 program-budget [AG/RES. 1137 (XXI-
O/91)], the General Assembly instructed the Permanent Council to study the whole system used to
determine the cost-of-living adjustment. However, that resolution made no provision for any cost-of-
living adjustment supplement for either 1992 or 1993.

    That from 1981 to 1991 the General Assembly froze the Organization's budget at the 1981 level.

     That the Organization's financial situation, however, has improved significantly, as is shown by
the document "Status of the Regular Fund as of December 31, 1977-1990," of August 1991.

      That every year but one since 1981 the Secretary General has requested the cost-of-living
adjustment dictated by the comparator, and every year the General Assembly has approved a lower
amount. Hence, the OAS salary index has fallen further and further behind the comparator. The
projected gap between the comparator and OAS salaries in January 1992 would be 14.37%, as is
explained in Appendix A of the proposed program-budget of the Secretary General, and, according to
the same document, would be 19.46% by January 1, 1993.

      That in July 1991 the Complainants requested a hearing with the Secretary General, claiming
that the resolution on the 1992-1993 program-budget adversely affected their interests by failing to
provide any cost-of-living adjustment for 1992 and 1993.

     That most of the staff were aware of the General Assembly's decision shortly after its adoption
because of a message the President of the Staff Association sent from Santiago, Chile, where the
session was being held.

     That the Secretary General informed them that the reconsideration procedure would not be
necessary, because he did not have the authority to amend a General Assembly resolution.

     That the present complaint is based on articles 33, 44, 117, and 118 of the Charter of the
Organization of American States; articles 12, 14, 36, 66, 72, and 94 of the General Standards to
Govern the Operations of the General Secretariat of the Organization of American States; General
Assembly resolutions AG/RES. 5 (I-E/70), AG/RES. 258 (VI-O/76), AG/RES. 383 (VI-E/78),
AG/RES. 498 (X-O/80), AG/RES. 561 (XI-O/81), AG/RES. 562 (XI-O/81), AG/RES. 632 (XII-
O/82), AG/RES. 652 (XIII-O/83), AG/RES. 727 (XIV-O/84), AG/RES. 793 (XV-O/85), AG/RES.
839 (XVI-O/86), AG/RES. 901 (XVII-O/87), AG/RES. 955 (XVIII-O/88), AG/RES. 1133 (XXI-
O/91), and AG/RES. 1137 (XXI-O/91); AG/CP/doc.329/83; Staff Rule 103.2; the Agreement on the
Implementation of a New Salary and Emoluments System, signed May 10, 1983, by the President of
the Staff Association and the Secretary General of the Organization of American States; the
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employment contract; OAS Administrative Tribunal Judgments Nos. 13 (1975), 30 (1977), 37 (1981),
59 (1982), 64 (1982), and 91 (1985); and on various judgments by other international tribunals cited.

      That a well-organized institution must have a means of adjusting its staff's salaries to offset the
rising cost of living.

      That since 1976 salaries at the OAS have been well below those at the United Nations and all
other international organizations headquartered in the United States. OAS salaries are lower because
starting in 1976 the General Assembly refused to apply the principle used in the United Nations
(known as the "Noblemaire principle"), which stipulates that salaries should be kept approximately
15% higher than those of the comparator institution, which is the United States Civil Service.

     That the Secretary General and the General Assembly have violated the General Standards and
other regulations governing the operations of the Organization of American States by their poor
financial management of the Organization, their bad faith, and their violation of the employment
contract, with the result that the employer has incurred discretionary costs at the expense of the
employees. For example, during the very same period when the Secretary General and the General
Assembly froze staff salaries, the Secretary General decided to prepay the principal of the second
mortgage on the F Street building.

     That the General Assembly established "parity" as a general standard, which it then replaced in
1983 with another general principle, the "comparator," which the staff agreed to, via a referendum, as
a replacement for the previous principle. Under the terms of the referendum, the staff consented to the
establishment of a new employment relationship with the Organization of American States.

      That in Judgment No. 64, this Tribunal ruled that when the staff gave up parity in exchange for a
new salary system, there was "an objective substitution of some rights for others." Since the 1992-
1993 program-budget did not grant the staff any cost-of-living adjustment for either 1992 or 1993, the
staff has been denied its acquired rights under parity and received nothing in exchange. This Tribunal
has ruled that the acquired rights of the staff are violated when there is a "failure to observe the proper
balance of the relations to which the parties are bound," and that is precisely what happened in the
instant case. Id.

     That by adhering to a policy of arbitrarily freezing the budget and arbitrarily capping salaries at
50% of the Regular Fund, the General Assembly has failed to honor the Organization's contractual
obligation to the staff, i.e., to consider the comparator in good faith, and in so doing the General
Assembly has violated a basic principle that must govern all contracts.

     That the Secretary General, too, has failed to honor his contractual obligations to the staff. With
the budget frozen, he submitted budget proposals that did not include the comparator as an anticipated
expenditure of the Regular Fund.

      That for ten years the Secretary General continued programs and went on filling vacancies but
failed to include the comparator as part of a viable and acceptable budget proposal, which shows a
lack of good faith. Moreover, despite the vast legal resources at his disposal, the Secretary General
did not properly advise the General Assembly that it could not freeze the budget, cap personnel
expenditures, and disregard its legal obligations to the staff under the comparator system.

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      That the only official explanation of the below-comparator salaries was the "financial situation
of the Organization." Although this criterion is part of the comparator policy, it is obvious that a
broad or self-serving interpretation of its meaning can justify almost any decision bearing upon salary
adjustments. Surely this was not the intention of the policy-makers, nor was it the expectation of the
staff when it approved the new salary policy. The criterion is supposed to be applied in a manner
consistent with the OAS's contractual obligations.

      That the new salary policy approved by the staff basically conformed to the guidelines
established in resolution AG/RES. 498, which are described in Judgment No. 64, Chisman v.
Secretary General of the OAS (OASAT, 1982). The purpose of these guidelines was to create "a well-
defined frame of reference for a salary policy" and to establish a standard that would ensure some
degree of predictability in the setting of salaries. This standard was conceived precisely in order to
obviate arbitrary decisions and "capricious or contradictory variations." Id.

      That the OAS Administrative Tribunal has set forth the general principles of law having to do
with staff remuneration. Thus, in Chisman, id., citing Judgment No. 13, Alaniz (1975), it stated that
"a reduction in salaries, when made unilaterally by the employer as in the present case, without the
consent of the employees, constitutes a manifest disregard for the proper balance of the employment
relationship, which cannot be justified even in the most difficult situations." In the same Judgment, it
found that "it is truly difficult to imagine any aspect that could be considered more important in the
employment relationship than remuneration in general and salaries in particular. From this it follows
that the system of remuneration must be considered as constituting an essential element of the
employment relationship that exists between the Complainants and the General Secretariat."

      That the Tribunal has also noted that equal pay for equal work is one of the fundamental
principles of labor law, as is the principle that there shall be no undue enrichment of the employer at
the worker's expense. Reeve v. Secretary General of the OAS, OASAT Judgment No. 59 (1981).

     That without any justifiable cause, the Secretary General and the General Assembly have frozen
the Complainants' salaries for the next two years. Thus, by their concerted actions the Respondents
have deprived the Complainants of their right to periodic adjustments that reflect changes in the cost
of living and other factors, and have thereby stripped the Complainants of one of the essential
elements of their terms of employment. The Organization has no right to modify those fundamental
terms of employment unilaterally. See Judgments Nos. 37 and 64, supra, and Lyra Pinto v. IBRD,
World Bank Administrative Tribunal Judgment No. 56 (1988); see also Hebblethwaite, supra.

      That, specifically, the Complainants pray the Tribunal: (1) to declare that the comparator is a
contractual stipulation and an essential element of the employment relationship that since 1983 has
been part of every employment contract that the OAS and its employees sign; (2) to declare that the
obligation claimed by the Complainants is payment of all the remuneration to which they are entitled
under their respective employment contracts, at the same levels and in the same amounts stipulated in
the comparator agreement, which the Organization of American States is obligated to honor because
it is a contractual stipulation; (3) to declare that on the basis of the facts alleged and proven in this
complaint, the Organization of American States and the General Secretariat of the OAS, which is its
central, permanent organ, have failed to comply with their obligations to apply the comparator to all
the remuneration that should have been paid to the staff since the Agreement entered into force on
January 3, 1984; (4) to order the Secretary General of the OAS to make the computations and
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arrangements necessary in each case to determine the amounts that the Organization of American
States owes to each Complainant from January 3, 1984, to the date of notification of the Judgment
because of its failure to comply with its contractual obligations concerning the application of the
comparator to the total remunerations and, within 30 days after the date of notification of the
Tribunal's judgment in the instant case, award the interested parties the full amount owed; (5) in the
event that the Tribunal limits its ruling to the salary freeze proposed for 1992-1993, to declare that the
freeze was ordered without bona fide and sufficient justification, and furthermore violates an essential
element of the basic employment rights of the staff, and therefore hold that the Complainants are
entitled to the full implementation of the comparator agreement because the Organization has violated
its agreement with the staff, or, alternatively, to declare that the Organization's violation of the
agreement constitutes grounds for rescission of the comparator agreement, in which case the staff
would be entitled to the agreement that existed prior to the infraction, i.e., parity with the United
Nations, including retroactive pay plus interest in an amount sufficient to compensate the
Complainants for the entire period from 1981 to 1993; and (6) to rule that the Organization of
American States must pay the Complainants the amounts it deems appropriate, for the costs,
including attorney's fees, that they incurred in defending their rights before the Tribunal, for which
they will submit supporting documentation.

     II. The attorney for the Secretary General answered the complaint in due time and proper form
and stated, inter alia, the following:

     That the present complaint is inadmissible because the Tribunal is not competent to review
General Assembly decisions on budget- and salary-related matters, which, under Article 53 of the
Charter of the Organization, are within the sole competence of the General Assembly.

     That the General Assembly dispelled any doubts in this regard in resolution AG/RES. 591 (XII-
O/82), which states that the General Assembly has final authority over the general action and policy
of the Organization, its budget, and the general standards that should govern the operations of the
General Secretariat.

      That the Tribunal has repeatedly recognized the supremacy of the General Assembly and has
reiterated that it lacks competence to transform itself into a super-lawmaker with the power to pass
judgment on the Assembly's decisions. [See Repetto de Dulce v. Secretary General of the OAS,
OASAT Judgment No. 111 (1990); Buchholz v. Secretary General of the OAS, OASAT Judgment
No. 37 (1978), and Valverde v. Secretary General of the OAS, OASAT Judgment No. 91 (1985).]

    That the United Nations Administrative Tribunal (UNAT) and the International Court of Justice
have also ruled that UNAT is not competent to review the resolutions passed by the United Nations
General Assembly. [See Mortished v. Secretary-General of the UN, UNAT Judgment No. 273 (1981)
and Oummih v. Secretary-General of the UN, UNAT Judgment No. 395 (1987).]

     That the charges against the Secretary General are inadmissible under Article VI of the Statute of
the Tribunal because the internal administrative procedures were not exhausted within the statutory
period.

    That in their hearing request of June 1991, the Complainants did not object to the Secretary
General's administrative actions; instead, they objected to the General Assembly's decision to reject

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the Secretary General's proposal of a cost-of-living adjustment that would reflect the full amount
indicated by the comparator. Moreover, 74 of the Complainants were never party to the June request
for a hearing on the General Assembly resolution on the 1992-1993 program-budget, so that they
should be excluded a priori from this case.

     That far from challenging it within the required 15-day period, the President of the Staff
Association actually praised the budget proposal presented by the Secretary General on February 1,
1991.

       That for 1993 the Fourth Committee approved the incorporation of previous cost-of-living
increases into basic salary, subject to subsequent analysis by the Permanent Council. As a result, the
staff's pensionable salaries increased by 12.5% in 1993.

      That starting in the 1980s, many of the governments of the member states began to have
financial difficulties and were unable to meet the demands of their creditors arising out of the
excessive external debt of the region. As a result, from 1983 to 1991 the member states were unable
to increase the quotas assigned to them in the Regular Fund, and that Fund's budget for those years
remained virtually unchanged at US$60 and US$64 million.

      That despite the freezing of quotas, during the 1980s many member states were unable to meet
their obligations and the revenues of the Regular Fund dropped below the level necessary to finance
the program-budget. The situation continued to deteriorate, reaching its lowest point in 1988 and
1989, when the Regular Fund had a deficit of over US$31 million.

      That the liquidity and cash-flow problem caused by this situation forced the Organization to cut
vital posts and to freeze the execution of budgeted programs. At the same time, there was an increase
in the demand for new programs designed to ensure the relevance of the Organization in a hemisphere
undergoing rapid change; it was called upon to undertake new responsibilities related to drug control,
environmental protection, and democratization. Despite its diminished resources and these added
demands, the General Secretariat voted in favor of a cost-of-living increase for staff in nine of the
eleven years between 1981 and 1991.

     That by resolution AG/RES. 954 (XVIII-O/88) the General Assembly ordered a reduction in
force and other severe austerity measures in view of the deteriorating financial situation of the
Regular Fund. As a consequence, about 300 staff members were separated from the Organization.
Since the Organization lacked funds to pay these staff members' termination benefits, resolution
AG/RES. 954 ordered the Secretary General to explore alternatives for obtaining these funds,
including the refinancing of the property at 1889 F Street. At the Secretary General's
recommendation, the Permanent Council, by resolution CP/RES. 514 (760/88), of December 20,
1988, authorized the Secretary General to take out a mortgage loan of up to US$20 million. In
paragraph 5 of that resolution the Permanent Council instructed the Secretary General to amortize the
loan with quota arrearages received from the member states. At the insistence of American Security
Bank, Article 5.1 of the loan contract included a provision requiring the Organization to prepay the
principal with quota arrearages received.

     That the General Secretariat signed the loan documents on March 31, 1989, and in the course of
that year it borrowed approximately US$16.4 million from a US$20 million line of credit. In 1990 it

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repaid US$7.484 million in principal and US$2.507 in interest for a total of US$9.991 million; in
1991 it repaid a total of US$7.892 million.

     That in May 1990 the Secretariat leased three floors in the F Street building to the World Bank,
in order to pay the debt service (interest, etc.) on the loan over its five-year term. The prepayment of
principal during that year substantially reduced the interest payments and, as a result, in late 1990 the
Secretariat estimated that the bulk of the lease income received from the World Bank could be used
for other purposes. It was only because that money was available (as a result of the prepayments on
the loan) that the Permanent Council was able to approve a 5.5% cost-of-living increase for the staff
in 1991.

     That the average salary at the OAS is approximately US$13,588 (34.3%) higher than the average
salary of the federal Civil Service in Washington, D.C.

    That the annual adjustment supplement is not automatic; it depends on how the General
Assembly evaluates the financial situation of the Organization.

     That contrary to what the Complainants allege, the General Assembly has acted in good faith in
approving the cost-of-living increases and in keeping them in effect even through the financial crisis
experienced by the Organization and its member states.

     That as the Tribunal concluded in Valverde v. Secretary General of the OAS, supra, "the
comparator was only considered `as a base of a proposed cost-of-living adjustment subject to
approval by the General Assembly.'"

     That every year since 1983 the Preparatory Committee has received and considered the
comparator-based cost-of-living adjustment supplement and also the financial situation of the
Organization. Hence, the Assembly has not refused to do what the existing salary policy requires of it.

    That contrary to what the Complainants allege, the new salary policy adopted by the General
Assembly by resolutions AG/RES. 498 and AG/RES. 632 does not adversely affect the balance of the
employment relationship, because that policy was negotiated and accepted by the staff on May 10,
1983.

      That nine years after those negotiations took place and the Agreement was accepted, the
Complainants now claim that they received nothing in exchange for parity. The staff wanted the life-
insurance benefit, the increase in the family allowance, and various other benefits that the Secretariat
offered in the negotiations. In exchange, they waived their rights to parity and accepted those new
benefits, together with the new procedure for obtaining periodic cost-of-living increases under
resolutions AG/RES. 498 and AG/RES. 632.

     That contrary to what the Complainants allege, the 50% rule is a reasonable budgetary standard
whose purpose is to maintain some balance between personnel expenditures and other essential
priorities of the Organization during this period of tight resources.

     That the only predictable element in the new salary system was the procedure that had to be
followed and the terms of reference that had to be taken into account in adopting the decision on the
cost-of-living adjustment (hereinafter COLA), not the amount to be authorized.
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     That because he submitted the comparator-based COLA proposal to the General Assembly each
year, the Secretary General has fully complied with the terms of the Complainants' employment
contracts.

      That in Valverde v. Secretary General of the OAS, supra, then Secretary General Alejandro
Orfila had submitted a report to the General Assembly during the budget process in which he
indicated the amount of the comparator-based COLA and recommended that a lower amount be
approved in view of the financial situation of the Organization. The staff alleged that this was "bad
faith" and a violation of the agreement of May 10, 1983. The Tribunal dismissed the complaint,
saying that the various measures taken by the General Secretariat "are entirely in conformity with the
general intent expressed by the Organization in the negotiations with the staff of the General
Secretariat."

      That the record shows that ever since the Tribunal's decision in Valverde, the Secretary General
has presented to the Preparatory Committee of the General Assembly a comparator-based COLA for
consideration by the General Assembly in the budget process. Therefore, as in Valverde, the Tribunal
must conclude in this case that the Secretary General did not violate his contractual obligation to the
staff with respect to the comparator.

      That the Complainants are asking the Tribunal to review some of the Secretary General's
management decisions, such as the prepayment of the mortgage on the building at 1889 F Street and
the filling of vacancies. However, the Tribunal is not empowered to question the financial judgment
of the Secretary General, who, pursuant to Article 118 of the OAS Charter, must act in conformity
with the financial and budgetary directives of the General Assembly and who, as provided in Article
114 of the Charter, is responsible to the General Assembly and not to the staff for the administration
of the Secretariat.

      That the prepayment of the mortgage on the F Street Building complied with the mandate of the
political organs expressed in the Permanent Council's resolution CP/RES. 514 (760/88).

     That he prays the Tribunal to dismiss the case with prejudice, to deny all remedies sought by the
Complainants, and to require them to pay defense costs in this case, including the honoraria of the law
firm of Arnold and Porter.

     III. The attorney for the Complainants presented his reply to the Secretary General's observations
and stated, inter alia:

     That undoubtedly the Tribunal has jurisdiction over the Secretary General, as it has been
previously established in the cases of Valverde and Chisman supra.

     That under Article 114 of the Charter of the Organization, the Secretary General is the legal
representative of the General Secretariat and is to "be responsible to the General Assembly for the
proper fulfillment of the obligations and functions of the General Secretariat." One of these
obligations is the 1983 Agreement.

     That the Secretary General's failure to comply with the budgetary guidelines established by the
General Assembly caused its repeated rejection of the proposed cost-of-living adjustments, which led
to a breach of the 1983 Agreement and the violation of articles 114 and 118 of the Charter of the
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Organization. Specifically, each year the Secretary General proposed cost-of-living adjustments that
would have required the General Assembly to disregard its policy of (a) keeping the costs for Object
1 of the Regular Budget below 50%, and (b) freezing the budget. Each year the General Assembly
rejected the supplementary appropriations requested by the Secretary General to cover the proposed
COLAs, and denied the COLAs or granted them only in part.

    That the Secretary General has failed to comply with Article 118 of the Charter and resolution
AG/RES. 591 (XII-O/82) by acting outside of the budgetary guidelines set by the General Assembly.

     That the Secretary General negotiated the 1983 Agreement in accordance with the instructions
he received from the member states by resolution AG/RES. 632 (XII-O/82), and he did so in his
capacity as legal representative of the Organization. Therefore, the obligations stipulated in the
Agreement are obligations of the Organization, as established by the Tribunal in Buchholz v.
Secretary General of the OAS, Judgment No. 37.

      That this Tribunal is competent to consider and resolve questions concerning the application and
sanction of General Assembly decisions, and to interpret the legal effect of agreements and actions
related to cost-of-living adjustments. Specifically, it is competent to issue an opinion on how the
parties must comply with the 1983 Agreement.

     That the principal reason why the General Assembly failed to apply the comparator as provided
in the 1983 Agreement was its consideration of the financial condition of the Organization. The
General Assembly has rejected the Secretary General's COLA proposal each year, citing, among
other reasons, the financial situation of the Organization. Member states used their failure to pay
quotas as the reason for either denying or reducing the COLA year after year. However, the failure to
comply with this legal obligation under the Charter and the General Standards does not justify
nonpayment of the comparator-based annual COLA.

      That, furthermore, in 1992-1993, when member states were paying past-due quotas, the
Organization used a substantial portion of these payments for discretionary expenses instead of
financing the COLA. It thus became obvious that this adjustment would forever be rejected under the
pretext of the "financial situation" of the Organization. As a concession to one member state, COLAs
were approved that were comparable to the salary increases granted to employees of the United States
Civil Service, a system not contemplated in resolutions AG/RES. 498 (X-O/80) and AG/RES. 632
(XII-O/82), or in the 1983 Agreement. This Agreement stipulates that the comparator formula
described in document CP/doc.1177/81, "Guidelines for the New Salary Policy for the Staff of the
General Secretariat of the Organization," is the basis for cost-of-living adjustments. This is further
proof that the U.S. Civil Service system was not one to which the parties agreed.

      That the Complainants are seeking a legal interpretation of the applicability of the 1983
Agreement. They are also seeking recognition of the employees' right to have the cost-of-living
increase considered a debt owed by the General Secretariat to the staff, unless the financial situation,
for reasons beyond the control of the Secretary General and General Assembly, makes it impossible
to apply the full COLA annually.

     That the Valverde complaint differs from the instant case in many factual respects; for example,
the unvarying attempt to impose a cost-of-living adjustment based on the U.S. Civil Service instead of

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the comparator, the improved financial condition of the Organization, an increased workload, the
continual violation of the 1983 Agreement and the resolutions of the General Assembly, and the
failure to approve any cost-of-living adjustment for the 1992-1993 biennium.

     That when there was no longer any reason to deny full COLAs on the ground of the financial
condition of the Organization, they were denied because the quota arrearages paid in were earmarked
for other priorities. Unlike the issue in Valverde, in the instant case the staff is petitioning the
Tribunal to declare that the Secretary General has failed to comply with resolutions and guidelines of
the General Assembly and the 1983 Agreement. It also seeks a ruling that the systematic refusal to
apply the Agreement as it was intended to be applied when it was signed, has created a legal
obligation and a debt of the Organization to the staff.

     That the attorney for the Secretary General himself has recognized that June 20, 1991, the date
on which the Complainants requested a hearing on the salary freeze for the 1992-1993 biennium, was
the appropriate time to present a complaint, because that is when the staff was notified.

      That the Secretary General refused the hearing requested on the ground that he lacked authority
to decide the matter and opted to refer the matter to the Tribunal. Therefore, he cannot now claim that
this complaint is inadmissible because the hearing procedure was not exhausted, since it was denied
arbitrarily by his attorney.

     That the Respondent cites several decisions that affect staff compensation for the 1992-1993
biennium. Among these he mentions the proposal to include the earlier COLAs in the basic salary,
which would raise pensionable salaries by 12.5%, and the approval of vegetative salary increases
intended to cover regular step increases, to which only about two thirds of the staff are entitled.
However, none of these decisions implies a COLA increase.

      That in 1990-1991 the Organization used payments of quota arrearages to pay off US$17.9
million on the second mortgage. In addition, the Secretary General requested, and the General
Assembly authorized, the use of US$10.9 million of the arrearages to repair and remodel buildings.
No portion of this sum, which was so easily diverted to non-personnel costs, was used to cover
comparator-based COLAs.

     That before the General Assembly approved the program-budget for 1992-1993, the financial
condition of the Organization was improving markedly. This improvement is the main issue in the
present case, in which the Complainants principally challenge the denial of the COLA for 1992-1993
by the Secretary General and the General Assembly. This complaint has been brought in the context
of the marked improvement of the financial condition of the Organization during the 1990-1991
biennium and indicators for improvement during the next biennium.

     That the quotas of most of the member states were reduced with the admission of Canada into
the Organization in 1991. As the Secretary General pointed out in his proposed program-budget for
1992-1993, the member states had reduced the budget in real terms by one third since 1982 by not
giving the Organization the resources it needed to maintain purchasing power.

     That, nevertheless, the member states did manage to meet their increased quota obligations to
other intergovernmental organizations, among them the United Nations, the Inter-American Institute
for Cooperation on Agriculture, and the Pan American Health Organization. The Secretary General
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himself said recently that the total quotas of the Regular Fund increased only 3.4% during the period
1982-1992, while the quotas of the same member countries increased 71% at the United Nations,
44.6% at IICA, and 55% at PAHO.

     That, consequently, the member states have had the financial ability to increase their quotas to
the Organization, just as they have increased those they pay to other international organizations. As
provided in the OAS Charter and Article 77 of the General Standards, and reiterated in resolution
CP/RES. 541 (816/90), quotas are obligatory. The Organization therefore cannot ignore its
obligations under the 1983 Agreement by alleging self-imposed financial difficulties.

      That the fact that OAS salaries are on average 22.8% below those of the United Nations is
additional evidence that the Organization has failed to comply with the comparator system.

     That the only benefit the staff obtained from signing the 1983 Agreement, other than payment of
the awards under Judgment No. 64, was the establishment of a new salary policy and a compensation
formula that was financially acceptable to the Organization.

     That the Organization, taking advantage of the fact that the Administrative Tribunal lacks
authority to enforce its judgments, conditioned the payment of Judgment No. 64 on major financial
concessions by the staff and a waiver of their claim to parity.

      That although the actions of the Secretary General and the General Assembly concerning the
annual COLAs were taken in the exercise of their discretionary powers, they constitute an abuse of
that discretion. In this case, any reasonable interpretation of the 1983 Agreement with the staff calls
for a good-faith effort to grant periodic, comparator-based cost-of-living adjustments, taking into
account possible variations caused by exceptional financial problems of the Organization. When the
Secretary General proposes a comparator-based COLA each year without financing it with cash
available in the Regular Budget, he is acting arbitrarily and improperly. Finally, when the
Organization uses resources that could have financed COLAs to pay for repairs and renovations,
mortgages, and other discretionary non-personnel expenditures, it, too, is acting arbitrarily and
improperly.

      That since 1983 the Secretary General has tied the adoption of his COLA proposal to the
member states' increasing their quotas and/or the General Assembly's disregarding its resolution
capping staff costs at 50% of the Regular Fund. He has done this despite the position of the member
states, repeated each year, that it was their intent to freeze the budget and quotas and keep the 50%
ceiling on personnel costs.

     That, as a result, the Secretary General did not propose COLAs that could be financed with cash
available in the Regular Fund. (See draft program-budgets for biennia 1984-1985, 1986-1987, 1988-
1989, 1990-1991, and 1992-1993.) Consequently, each year the General Assembly denied all or part
of the COLA because the Secretary General did not fund it within the budgetary guidelines it had set.
By contrast, in the year when the Secretary General found funding for the COLA in various
unobligated resources, the General Assembly approved the portion financed in that manner.

     That the Secretary General had a duty to notify the General Assembly if there were conflicting
resolutions that affected his ability to comply with the obligations deriving from the 1983 Agreement,
the General Standards, and the Charter. Rather than do this, the Secretary General paid little regard to
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the 1983 Agreement, to the related legal obligations, and to the directives concerning the budget. He
chose instead to provide resources for various discretionary expenditures and avoid reducing services
to countries that were in arrears on their quotas. Although the financing of discretionary items does
not constitute a legal obligation, the Secretary General gave it precedence over his legal obligations
under the 1983 Agreement.

     That the fact that the President of the Staff Association praised the Secretary General's proposal
to grant the full comparator cannot adversely affect the Complainants. Indeed, if the Secretary
General proposes the comparator and fails to provide any funding, it is at best an empty gesture.

     That it was only after the Complainants initiated action against the Secretary General that the
General Secretariat proposed financing COLAs from existing quotas and the General Assembly
approved a partial COLA for 1992 and 1993. [See AG/RES. 1177 (XXII-O/92).]

      That the member states are legally obligated to pay their quotas on time, according to articles 6
and 54 of the Charter, Article 77 of the General Standards, resolution CP/RES. 541 (816/90), and
Resolution AG/RES. 900 (XVII-O/87). In the last resolution, the General Assembly itself recognized
that "the payment of quotas and contributions constitutes a legally binding commitment of the
member states to the Organization of American States." However, until 1990 several member states,
including the largest contributor, were ignoring these legal obligations. These same member states
also decided annually that the financial condition of the Organization did not warrant payment of the
full comparator-based COLA.

   That the General Assembly cited the self-induced financial weakness of the Organization to deny
COLAs to the staff, thereby manipulating the only basis in the 1983 Agreement for denial of the
COLA.

      That given that quota payments are legal obligations, any agreement subject to the financial
health of the Organization must presume that these legal obligations will be paid promptly by the
member states. If the member states act illegally and refuse to meet these legal commitments, while at
the same time paying increased quotas to other international organizations, they cannot use their
violation of the Charter and General Standards of the OAS as a legitimate reason to deny the COLA.

      That the member states are financially benefiting at the expense of the staff, because it continues
to give them services financed with the salary adjustment it did not receive. This violates the
principles of equity and the basic tenet of labor law that the employer shall not unduly enrich himself
at the worker's expense.

     That when the second mortgage was paid off in 1992 and it was found that funds were available
that had not been earmarked previously for the mortgage, the Secretary General allocated these
resources to building maintenance and a complete renovation of the Main Building. The Secretary
General clearly demonstrated that his priority was renovation and repair over the rights of the staff.
Recently, in the proposed program-budget for the 1994-1995 biennium he stated:
. . . two matters require urgent attention, and in my view should not be postponed for 1994, but
addressed through a supplement to the 1993 budget. Both are of a one-time nature. I submit therefore
to the Preparatory Committee [for] their approval as a supplemental appropriation to the 1993 budget
(to be carried out between 1993 and 1995) to be financed with payment of quota arrears from
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previous years: (a) capital improvements to the OAS buildings, and (b) a study of all of the
computerized administrative systems of the General Secretariat.
    That during the period from 1989 to the present, when staff has been reduced by more than 50%
and direct services have remained constant or increased, the General Secretariat contracted
consultants and gave contracts to persons not on the permanent staff. In so doing he used funds that, if
properly managed, could have been available for COLAs.

      That the definition of the comparator states that "equal weight shall be assigned to each
organization in order to avoid giving undue preponderance to the national entity or to any single
Inter-American governmental agency." However, year after year the United States proposed an
adjustment that kept staff paid as close as possible to that of the U.S. Civil Service, and year after
year the General Assembly approved the proposals of the United States.

     That the Secretary General himself has admitted that the attempt to link OAS salaries with those
of the U.S. Civil Service is of long standing. He recently said:
In the yearly discussions of the cost-of-living adjustment the position that such adjustments should be
equal to or below those received by employees of the United States Government has been a strong
argument. In fact, from January 1983 to January 1992 OAS remunerations lagged not only behind the
rate of inflation but also behind those granted by the United States Government to its employees. [See
"Note of the Secretary General Transmitting the Agreement with the Staff of the Secretariat with a
View to Establishing a New System of Salaries and Emoluments in Compliance with Resolution
AG/RES. 1177 (XXII-O/92)" (CP/doc.2310/92 corr. 1).]
     That the omission of a COLA in the budget has the effect of reducing salaries when compared
with inflation, and violates the express provisions of the May 1983 Agreement.

     That agreements affecting the personal situation of a staff member, such as those pertaining to
salary, cannot be changed without the staff member's consent [Kaplan v. The Secretary-General of the
United Nations, UNAT Judgment No. 19 (1953)].

      That the Secretary General himself has admitted that the OAS has about two thirds the number
of staff that it had in 1983, and yet the OAS provides more services than it did 10 years ago. During
this period the staff workload has increased considerably, while salaries failed to keep pace with
inflation or to reflect the additional work.

     That the 1983 Agreement has been violated continuously and constantly since it entered into
force; therefore, now that funds are available, the staff has a right to full reimbursement of the debt.

        IV. In his response to the Complainants' reply, the attorney for the Secretary General stated, inter
alia:

      That the Complainants' assertions that they are owed US$37 million is absurd, because the
existence of a debt presumes a legal obligation. However, neither the 1983 Agreement nor the salary
policy in force by virtue of resolutions AG/RES. 498 and AG/RES. 632 gives any indication that the
General Assembly has accepted the obligation to approve 100% of the comparator for the annual
COLA. As the Tribunal concluded in Valverde, "the comparator was only considered `as a base of a
proposed cost-of-living adjustment subject to approval by the General Assembly'" and there is no

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indication in the Agreement that the General Assembly is required to approve the annual proposals of
the Secretary General on the basis of the comparator. Furthermore, it is a fundamental principle of
law that failure to take legal action to recover a debt within the statutory time will extinguish that
debt. In this case, the Complainants failed to present their claim for retroactive salary for former years
within the time limits established in Staff Rules 112.1 and 103.11. Therefore, the debt they claim is
extinct.

      That the Complainants' assertion that the General Assembly created its own financial crisis as a
pretext for denying them COLAs is absurd. The truth is that the General Assembly could not approve
the increases requested by the Secretary General, simply because certain key member states made it
plain that they could not pay higher quotas or even, in some cases, those already set. All this was the
result of an economic recession that affected the entire hemisphere and obliged the countries to assign
their limited resources to other priorities during the period in question. The General Assembly did not
cause the hemisphere's economic recession, nor can it be responsible as a corporate body for the
decisions of sovereign states not to pay or support proposals for increased quotas.

     That contrary to what the Complainants allege, the facts show that they negotiated and signed
the 1983 Agreement voluntarily, as the Tribunal recognized in Valverde.

      That comparison of the salaries in effect in 1983 and those for the 1992-1993 biennium shows
that they have continued to increase.

     That even if it were true that inflation has reduced the real value of the Complainants' salaries,
there is no provision in the terms of employment that includes "a right to the protection of the real
value of their salaries against inflation." [See de Merode v. World Bank, World Bank Administrative
Tribunal Judgment No. 1 (1981) and Oummih v. UN Secretary-General, UNAT Judgment No. 395
(1987).]

     That the Complainants allege that they earn on average 7% less than their counterparts in the
U.S. Government. However, this conclusion is based on weighted averages that exclude all general
services staff and at least 49 professionals.

     That the Complainants allege that the Secretary General used the payment of quota arrearages
for discretionary expenditures. This presumes that the substantial payment of arrearages by the U.S.
Government in 1992-1993 was available for the payment of staff salaries. However, the United States
agreed to pay these funds subject to a commitment by the General Secretariat to use them for the
Working Capital Subfund, as provided in Article 85 of the General Standards; for payment of the
mortgage on the General Secretariat Building; and for funding deferred building maintenance and
programs to replace capital assets. Furthermore, the payment of the mortgage with quota arrearages
was stipulated in a resolution of the Permanent Council, CP/RES. 514 (760/88), and was a condition
set by the American Security Bank for granting the loan. In addition, the funds were earmarked for
severance payments and incentives during the reduction-in-force of 1988-1989.

     That the use of payments for overdue building repair and investments in capital assets was
intended to repair roofs and replace heating and air-conditioning systems that no longer functioned
because they were more than 40 years old.


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     That the General Assembly has not delegated its authority for approval of the program-budget to
the Tribunal or any other organ of the Organization of American States. To dispel all doubt on the
question, the General Assembly approved resolution AG/RES. 591.

     That this resolution was approved immediately after the Tribunal's decision in Chisman v.
Secretary General of the OAS, Judgment No. 64 (1982), in response to a concern expressed by some
delegations that the Tribunal had exceeded its authority.

     That the Tribunal has furthermore said repeatedly that it lacks competence to review decisions of
the General Assembly. This jurisprudence is reflected in Valverde, supra; Repetto de Dulce v.
Secretary General of the OAS, Judgment No. 111 (1990); and Buchholz v. Secretary General of the
OAS, Judgment No. 37 (1978).

     That the Tribunal limited its competence in Valverde, and its interpretation of the 1983
Agreement and resolutions AG/RES. 498 and 632 is res judicata.

    That the jurisprudence of other international tribunals offers no basis for the Tribunal to assume
competence over decisions of the OAS General Assembly.

      That the Complainants should have challenged the Secretary General's proposed program-budget
for 1992-1993 after its publication, but did not do so. That would have enabled the Secretary General
to take some corrective action. However, the Secretary General was unaware of their dissatisfaction
until they filed this complaint.

      That it is not within the Tribunal's competence to redraft the 1983 Agreement, either by
interpretation or otherwise, so as to require automatic or retroactive payment of COLAs when quota
arrearages come in. The function of legal tribunals is to apply contracts according to their explicit
provisions, not to rewrite them.

     That the parties are now negotiating a new agreement and no judicial intervention is needed.

     That the fact that member states of the OAS have increased their quotas to the United Nations is
not surprising. The OAS member states represent just over one fifth of the UN membership and do
not control the budget process, and are therefore obligated to pay quotas imposed by the vote of all
members. The fact that the member states voted to increase the budgets of IICA and PAHO between
1981 and 1991 while practically freezing the OAS budget is also not surprising. The specialties of
these two agencies, agriculture and public health, are top priorities.

     That the de Merode and Oummih cases cited above confirm that the Organization has no
obligation to increase salaries to offset the full impact of inflation. Therefore, this Tribunal--like the
World Bank Tribunal in de Merode--should deny the staff's claim that it has an acquired right to that
adjustment.

     That the Complainants are trying to convince this Tribunal that their salaries remained stagnant
in the 1992-1993 biennium, when in fact all employees received a COLA of 6.53% for the biennium,
and about two thirds of the staff received vegetative step increases averaging 2.45% in 1992 and
2.22% in 1993. In 1991, moreover, the Assembly approved, effective January 1, 1993, the
incorporation of 12.2% of the cost-of-living adjustment into basic salary. In addition, more than 200
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employees, about one third of the total staff, were reclassified during the period and received the pay
increases corresponding to their new grades.

     That it is untrue that the cumulative effect of the General Assembly's decisions has been to alter
the balance of the employment relationship. The Complainants in fact negotiated the new salary
policy and approved the 1983 Agreement in a referendum.

     That OAS salaries are substantially higher than their equivalents in the U.S. Civil Service.

     That the Complainants' allegation that OAS salaries are on average 22.8% below those paid by
UN/PAHO is false because they do not take into consideration the facts that the OAS work week is
shorter and that UN/PAHO has a dual salary system for professional staff.

     That this calculation also does not take into account the grade inflation prevalent in the OAS,
where many employees are classified at a higher level than employees who perform similar functions
at UN/PAHO.

     That an order compelling an ex gratia payment would nullify the General Assembly's decisions
on salary policy and have no merit.

    That it is absurd to argue that the Secretary General has abused his discretion, since the Secretary
General has no control whatsoever over the General Assembly.

     That the assertions of malfeasance in the preparation of the program-budget are irrelevant
because resolution AG/RES. 632 does not require the Secretary General to assign all available
resources to the annual COLA. Furthermore, at year's end there was no cash balance to fund the
1990-1991 Program-Budget.

    That the Secretary General carried out in full the resolutions and directives of the General
Assembly in preparing the budget for the 1992-1993 biennium.

      That the Complainants assert that since the financial condition of the Organization improved in
the 1992-1993 biennium, the Secretary General should have budgeted a 14.2% COLA. They also
assert that he should not have asked the member states to increase their quotas, but rather should have
used the payments of arrearages to finance the COLA. This position is erroneous, however, because it
is based on two untenable hypotheses. First, the Complainants presume that the Secretary General
could have foreseen with certainty in the first six months of 1991 the magnitude of the improvement
in the Organization's financial condition for the 1992-1993 biennium. Second, they presume that once
quota arrearages had been paid, they could have been used for staff salaries. Both assumptions are
false and the argument should therefore be rejected.

      That it is easy for the Complainants, with hindsight, to argue that the financial condition of the
Organization improved in 1992-1993. However, this a posteriori appreciation of events is totally
irrelevant for determining the financial condition of the Organization in January 1991, when the
Secretary General drafted the Program-Budget for the 1992-1993 biennium, or in June 1991, when
the General Assembly approved the program-budget resolution for the biennium. The second fallacy
of the Complainants' argument is their assumption that the substantial payments of arrearages, once
made in 1992-1993, would be available to finance salary increases. The truth is that the United States
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Government, which is the principal debtor of the Organization, has imposed restrictions on the use of
its arrearage payments. One of the restrictions is that an organization receiving the payments cannot
use them to increase its budgetary base. Using arrearages to fund salary increases would increase the
budgetary base, because they would be recurring expenditures in subsequent years.

      That the spending of quota arrearages to repay debts or fund long-deferred building maintenance
is neither an abuse of discretion nor a violation of staff rights.

    That he prays that the present complaint be dismissed and that the Complainants be ordered to
pay defense costs in this case including, but not limited to, the legal honoraria of the law firm of
Arnold and Porter.

      V. On March 31, 1994, pursuant to Article 14.2 of the Rules of Procedure of the Tribunal, the
present case was placed on the list of matters pending consideration. Once the President had set the
date for the thirty-ninth regular session, the pertinent steps were taken and the Tribunal was
composed of Enrique Ponce y Carbo, President; José Ajuricaba da Costa e Silva, Vice President; and
Enrique Rojas Franco, Judge. The Tribunal opened its session on May 2, 1994, considered the case
sub judice, and in accordance with Articles 17 and 18 of the Rules of Procedure set May 9, 1994, to
take testimony and conduct the oral proceedings. The Tribunal met for that purpose at the specified
time.

     Having examined the proceedings, the Tribunal now

CONSIDERS:

  I. COMPETENCE OF THE TRIBUNAL

     The respondent contends that this complaint is inadmissible on the ground that the Tribunal is
not competent to review General Assembly decisions on budget- and salary-related matters, which,
under Article 53 of the Charter of the Organization, are within the sole competence of the General
Assembly. The Respondent further contends that the General Assembly dispelled any doubts in this
regard in resolution AG/RES. 591 (XII-O/82), in which it resolved that it has final authority over the
general action and policy of the Organization, its budget, and the general standards that should govern
the operations of the General Secretariat.

    The Respondent adds that in the instant case, the Tribunal is not competent to determine whether
the General Assembly, in a series of decisions on salary and budgetary policy since 1983, has
mismanaged the Organization's resources and has acted in bad faith, thereby violating the
Complainants' contracts of employment, as they contend.

      The Respondent's assertion is mistaken. Actually, what is being challenged in this complaint is
the administrative measures of the Organization of American States in its capacity as employer of its
staff and represented, under Article 112 of the Charter of the Organization, by its permanent
executive organ, the General Secretariat. In short, what is being challenged is the actions of the
General Secretariat, represented in the person of its Secretary General, whereby it ceased to comply
fully with its contractual obligations under the Agreement on the implementation of a new salary and
emoluments system (CP/CPP-1697/83), of May 10, 1983. In this Agreement, approved by a
referendum, the parties agreed to implement the new salary policy (comparator) approved in General
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Assembly resolution AG/RES. 632 (XII-O/82), of November 21, 1982, which also adopted the salary
scale proposed in document CP/doc.1177/81 add. 1.

      This Tribunal finds that the cost-of-living adjustment system in the Organization of American
States was modified but not eliminated by resolution AG/RES. 632 (XII-O/82). That system is a
legally binding obligation for the Organization and, correlatively, a right of the staff.

      Under Article 118 of the Charter, the Secretary General is authorized to "fix [the] remuneration"
of the employees of the General Secretariat in accordance with the general standards and budgetary
provisions established by the General Assembly. Further, under Article 53 of the Charter, the General
Assembly is the supreme organ of the Organization of American States and one of its functions, under
subparagraph e), is "To approve the program-budget of the Organization and determine the quotas of
the Member States." In other words, the Secretary General proposes the cost-of-living adjustments
and the General Assembly gives them final approval. This means that in the setting of salaries or any
other type of honoraria, adjustments, and ex gratia payments, the act involves two wills, that of the
Secretary General, who proposes, and that of the General Assembly, which disposes. Administrative
law calls these compound acts; in other words, for such acts to be valid and effective, two different
organs must concur. In comparative law, for example, the executive branch of government proposes
the bill for the national budget, but its proposal must win the approval of the legislature or parliament.
The latter may eliminate, reduce, or replace items. However, this does not eliminate the obligation
that the state as a legal person, in this case the Organization, has as a public international subject vis-
à-vis its creditors, specifically the staff of the Organization.

      The corollary of the foregoing is that if for any reason, cause, or circumstance the supreme organ
of the Organization fails to honor its obligation, it is not up to this Tribunal either to nullify or revoke
its acts or to order it to honor what it has not honored, since the Tribunal is not competent to do so.
However, if the obligation is one of the Organization as a whole, as a subject of law, with the capacity
to incur obligations and rights as employer, the Tribunal can, in application of Article II of its Statute,
hear claims "in which members of the staff of the General Secretariat of the Organization of
American States allege nonobservance of the conditions established in their respective appointments
or contracts or violation of the General Standards for the operation of the General Secretariat or other
applicable provisions, including those concerning the Retirement and Pension Plan of the General
Secretariat."

       This Tribunal considers that by virtue of the referendum-approved Agreement on the
Implementation of a New Salary and Emoluments System (CP/CPP-1697/83), the comparator-based
cost-of-living adjustments are part of the staff members' contracts or appointments. Consequently, as
these adjustments are an essential part of the staff's remuneration, the continued failure to pay them in
full or even to pay them at all constitutes a breach of the terms of the contracts or appointments of the
staff. Therefore, the complaint filed by the Complainants against the breach of their contracts is
covered by the assumption posited in Article II of the Statute of the Tribunal.

     It should be noted here that in similar or like cases, the Tribunal has also declared itself
competent. It did so in Buchholz et al. v. Secretary General of the OAS, Judgment No. 37 (1978), in
which the Complainants alleged nonobservance of the terms of their appointments when the post
adjustments they were paid were less than they should have been according to the scales in effect at
the United Nations. It also declared itself competent in the case of Chisman et al. v. Secretary General
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of the OAS, Judgment No. 64 (1982), in which the Complainants asserted that the Secretary General
had violated certain contractual rights by not paying their salaries at parity with the United Nations. It
did likewise in Valverde et al. v. Secretary General of the OAS, Judgment No. 91 (1985), in which
the Complainants requested that the new salary policy established in resolution AG/RES. 652 (XIII-
O/83) be applied as of September 5, 1980, rather than January 3, 1984, as the General Secretariat of
the OAS had decided.

     Like the case sub judice, these cases challenged salary-related acts of the Organization. Those
acts were performed by the Organization as a legal person (with the capacity to incur an employer's
obligations and rights), represented by its Secretary General.

      The doctrine that employment obligations are obligations of the Organization as a whole and not
of its executive or legislative bodies has developed starting with Judgment No. 37, Buchholz, supra,
in which the Tribunal stated that
. . . when the Secretary General hires his staff members, they are in fact hired by the Organization,
and the obligations in those contracts are obligations of the Organization of American States.
     Finally, as to the interpretation of resolution AG/RES. 591 (XII-O/82), to which the Respondent
refers, this Tribunal cites its own finding in its Judgment No. 64, Chisman, supra, that
Any attempt to construe AG/RES. 562 as applying to a dispute in process would mean divesting the
Administrative Tribunal of its competence to decide on individual cases. That would inexorably
affect the principle of separation of powers and functions that is the basis of the distribution of
jurisdiction of the various bodies of the Organization.
     Therefore, the Tribunal is competent to hear the instant case on the basis of Article II of its
Statute.

II. EXHAUSTION OF ADMINISTRATIVE REMEDIES

      Article VI.1(a) of the Statute of the Tribunal stipulates clearly that it will only admit a complaint
when the person concerned has exhausted the procedures provided for in the General Standards or
other existing regulations and the Secretary General has made a final decision on the matter. In its
jurisprudence, this Tribunal has repeatedly stated that before acceding to the Tribunal's jurisdiction,
the person is obligated to exhaust the internal administrative procedures, within the required time and
in the proper manner. [See Brunetti v. Secretary General of the OAS, Judgment No. 95 (1986); Sanz
de Santamaría v. Secretary General of the OAS, Judgment No. 73 (1983); McGough v. Secretary
General of the OAS, Judgment No. 87 (1985); Malatesta v. Secretary General of the OAS, Judgment
No. 75 (1984); Repetto de Dulce v. Secretary General of the OAS, Judgment No. 111 (1990); Duarte
et al. v. Secretary General of the OAS, Judgment No. 104 (1989); Palmieri v. Secretary General of the
OAS, Judgment No. 106 (1990).]

     In the case sub judice, 479 of the 556 Complainants instituted the hearing procedure with the
Secretary General, in accordance with Staff Rule 112.1. Their requests were presented on June 24, 25,
and 28 and July 8, 10, and 15, 1991.

     In their requests, these persons state that the resolution on the program-budget of the
Organization for the 1992-1993 biennium, approved at the eleventh plenary session of the twenty-first

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regular session of the General Assembly, on June 8, 1991, seriously affects their interests by giving
them no cost-of-living adjustment for 1992 or 1993.

     By memorandum dated July 17, 1991, the Director of the Department of Human Resources, on
behalf of the Secretary General, told all those who had requested a hearing that the hearing and
reconsideration procedure referred to in Chapter XII of the Staff Rules did not apply in this instance.
But what matters most for the case sub judice and what proves that the administrative remedies were
exhausted is the final paragraph of that administrative decision, which expressly states the following:
"Consequently, all administrative remedies that the Secretary General might have adopted in this
instance have been exhausted."

     We should recall that the purpose of those preliminary proceedings is to allow the Secretary
General to rescind some action or decision he or one of his subordinates has taken before that action
or decision causes needless harm to some staff member and ends up in costly and protracted litigation
before the Administrative Tribunal. Specifically, as the Tribunal stated in McGough, supra:
. . . the reconsideration procedure constitutes a staff member's best guarantee of obtaining an
equitable solution to his complaint, since the Joint Advisory Committee on Reconsideration has
conciliatory powers under Staff Rule 112.2(g)....
     In the case sub judice the Director of the Department of Human Resources, on behalf of the
Secretary General, stated that the hearing and reconsideration procedure was not applicable in this
instance. The Tribunal finds that since no Joint Advisory Committee on Reconsideration was
convened, the Secretary General did not attempt to get the parties to reach agreement via
administrative channels.

      The Tribunal therefore concludes that the memorandum of July 17, 1991, from the Director of
the Department of Human Resources is an act whose content reveals that the Secretary General
unequivocally regarded the administrative remedies as having been exhausted, as the Director clearly
states. After that action, the only avenue left to those Complainants who had requested a hearing with
the Secretary General was to turn to the Tribunal, which is what they did by filing this complaint.

    The inapplicability of the administrative procedure to which, rightly or not, the Secretary
General refers in the memorandum constitutes a denial of the request for a hearing and a refusal to
comply with Article VI.1(a) of the Statute of the Administrative Tribunal.

III. DEMURRER: FORFEITURE OF THE RIGHT TO FILE A COMPLAINT

      The Respondent raises the objection that 74 of the 556 Complainants had forfeited the right to
file a complaint by failing to request a hearing with the Secretary General under Staff Rule 112.1, and
that consequently their complaints should be summarily dismissed.

     It has been reliably demonstrated that 483 Complainants requested a hearing in due time and
proper form after the General Assembly, at its twenty-first regular session in Santiago, Chile, from
June 3 through 8, 1991, failed to approve any cost-of-living adjustment for the 1992-1993 biennium.
[See resolution AG/RES. 1137 (XXI-O/91), Program-Budget of the Organization, Biennium 1992-
1993.]


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      This Tribunal has established, however, that 73 Complainants (not 74, as the Respondent
alleges) did not request a hearing with the Secretary General. Hence, their right to dispute either the
Secretary General's proposal or the General Assembly's failure to approve any cost-of-living
adjustment has been forfeited, as is any other subjective right of Organization staff members that is
not exercised within the statutory time. (See list of the 73 Complainants who did not request a
hearing, Appendix B of this Judgment.)

IV. DEMURRER: EXTINCTION OF THE RIGHT TO BRING AN ACTION

     The Respondent raises the objection the Complainants' right to bring an action demanding the
payment of cost-of-living adjustments accumulated since 1984 has expired because they failed to do
so within the statutory time.

     The Tribunal considers that the proceedings fully demonstrate that starting in 1984, the salary
adjustments differed from the amounts or sums proposed; in 1987 and 1989, no cost-of-living
adjustment at all was approved. Nevertheless, it was not until June and July of 1991, after the General
Assembly failed to approve any COLA for the biennium 1992-1993, that staff members challenged
those infringements of their rights.

In this regard, Staff Rule 103.11 sanctions negligence or failure to challenge in the following terms:
A staff member who has not been receiving an allowance, pay differential, or other payment to which
he is entitled shall not receive such payments retroactively unless he has made written claim within
the following periods:
(i) In the case of cancellation or modification of the staff rule governing such right, within three
months following the date of its cancellation or modification.

(ii) In every other case, within one year following the date on which he would have been entitled to
the payment.
     For its part, this Tribunal has established the following criteria in its judgments Nos. 114, Ector,
and 75, Malatesta. In Ector, it found as follows:
The time limits specified by the Statute must be strictly adhered to by the Tribunal, since when they
expire any rights are extinguished. This, too, is universally accepted as grounds for the
extinguishment of any rights the Complainant may have had. Extinctive prescription consolidates a
legal situation by operation of the passage of time. The lawmaker has simply recognized a principle
that dates back to Roman times; when a claimant allows a certain period of time to pass without
bringing an action to which the law entitles him, his claim lapses, because his silence is interpreted to
mean that he has waived his rights. The various legal systems have dealt with the matter in this way
because they cannot leave claims pending indefinitely without being asserted during the time period
that the lawmaker stipulates. Indeed, under most systems of law, the statute of limitations cannot be
waived, since forfeiture of that right is considered contrary to public order.

Similarly, in Malatesta, the Tribunal ruled: The Tribunal finds that the requests made by the
Complainants in the present complaint are out of time, since Staff Rule 103.11(ii) sets one year as the
limit for claiming remuneration and other payments. Since the Complainants did not do this--it was
only on June 30, 1983, that they filed a request for recognition of the rights that the other
Complainants had requested on January 26 and May 22, 1981--and since the Staff Rule cited above
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establishes a one-year period for making such claims, the Tribunal finds that the claims are totally out
of time.
     In accordance with the record of events and in application of Staff Rule 103.11(ii), cited earlier,
and bearing in mind its repeated jurisprudence, the Tribunal must sustain the objection raised by the
attorney for the Secretary General. It therefore declares the Complainants' case for the payment of
cost-of-living adjustments owed from 1984 up to one year prior to the date on which they requested a
hearing with the Secretary General to be time-barred under Staff Rule 112.1, since their
administrative challenges were filed out of time.

V. IRREGULARITY OF PROCEDURAL REPRESENTATION

     Some Complainants failed to present their powers - of - attorney in due time and in proper form,
despite the express formal request made by the Tribunal Secretariat to the attorney for the
Complainants through Notification TRIBAD/36/94, dated March 23, 1994. Some eventually
remedied this defect by submitting original notarized powers - of - attorney in which, in accordance
with Article 22.1 of the Rules of Procedure of the Tribunal, they authorize their attorney to represent
them in the present proceedings. Others, however, did not do this or did so after May 13, 1994, the
date on which the Tribunal issued the present Judgment. Consequently, the latter are not entitled to be
accorded a right that they themselves, by their own negligence in presenting powers - of - attorney,
failed to claim within the prescribed time. (See list of Complainants excluded for failing to present
powers of attorney in due time and proper form, Appendix C of this Judgment.)

 VI. RECOGNITION OF COMPLAINANTS' RIGHT TO SUE

      The Tribunal has already recognized in this Judgment the Complainants' subjective right to
receive a comparator-based cost-of-living adjustment each year, a right that is indisputable and can
only be extinguished bilaterally, not unilaterally. However, as was said above, in the present case this
recognition does not apply to those Complainants who, by their lack of diligence, forfeited their right
to appeal to this Tribunal to claim the adjustments owed. Nor does it apply to those Complainants
who did not present powers - of - attorney in due time and proper form despite the express request
that the Tribunal Secretariat made to their attorney in Notification TRIBAD/36/94, dated March 23,
1994.

       Consequently, in the case sub judice, the subjective right is recognized only for those
Complainants who in due time and proper form challenged the acts prejudicial to their interests, i.e.,
the acts that modified or eliminated their right without regard to the universally accepted procedures
for eliminating subjective rights deriving from a valid existing contractual relationship. This theory is
commonly referred to as the theory of ablative acts.

     Hence, the only Complainants accepted in the present complaint and thus the only ones entitled
to be compensated by the OAS in the manner and with the limitations to be indicated below are the
479 Complainants listed in Appendix A of this Judgment.

VII. DEMURRER: MATERIAL RES JUDICATA

    The attorney for the Respondent argues that Complaint No. 139, Valverde et al. v. Secretary
General of the OAS, Judgment No. 91 (1985), has already settled the same legal and factual situation

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to which the present complaint refers and hence raises the objection of res judicata with a view to
having it dismissed.

     The three basic procedural elements necessary for material res judicata are identical object,
grounds, and parties. In the instant case, it is clear that some of the Complainants were also
Complainants in Complaint No. 139, but it is also true that some were not. For this reason alone, the
objection must be overruled on the basis of the general principle of procedural law that a party may
not be adversely affected without having been heard and convinced in a proceeding.

      It could be argued that the objection should be sustained because some Complainants in this
proceeding were also Complainants in the Valverde case. However, the Respondent does not
demonstrate or prove this subjective identity, which is the proper procedure for the party asserting a
fact ad procesum. Moreover, the object of the action in Complaint No. 139 was different from the
object under examination here. In Complaint No. 139, settled by judgment No. 91 (1985), it was
argued (causa petendi) that the Secretary General should execute the new salary policy established in
General Assembly resolution AG/RES. 652 (XIII-O/83) retroactive to September 5, 1980, not to
January 3, 1984, and that the Complainants should be paid interest on the amounts of salary not paid
since January 1, 1984. The object in that case was the temporal effect of a judgment, or rather of the
execution of a judgment.

     In the case sub judice, something different is sought: the enforcement and payment and other
matters related to a system for comparator-based cost-of-living adjustments that, according to the
Complainants, either have not been paid at all or have been diminished.

      Hence, the grounds for the action are different in the two cases, so that the objection of material
res judicata must be rejected.

VIII. THE COMPARATOR SYSTEM

     It has been reliably shown that the Organization instituted by law a system for its staff that
involved annual adjustment of their salaries to offset the loss in the purchasing power or real value of
those salaries.

     That system was called parity, because the cost-of-living adjustment was to follow the system
used at the United Nations for its staff. In that way, OAS salaries were automatically adjusted
whenever cost-of-living adjustments were made at the United Nations.

      Later, the OAS General Assembly eliminated parity with the United Nations by resolution
AG/RES. 383 (VI-E/78) because it could not continue to finance it. The outlines of the new salary
policy that was to replace parity were approved in resolution AG/RES. 498 (X-O/80). The Tribunal
confirmed the elimination of the parity policy in its Judgment No. 64, Chisman (1982), which
established that the replacement of that system was subject to the adoption of a new salary policy,
which had not yet been done. This new salary policy, the Tribunal ruled, must have the approval of
the Complainants.

      The new policy was adopted by resolution AG/RES. 632 (XII-O/82), of November 21, 1982,
which established the salary scale proposed in document CP/doc.1177/81 add. 1. This document
stated that the Secretary General should present to the Preparatory Committee of the General
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Assembly a formula that the General Assembly would then use as a guideline in the annual
computation of the cost-of-living adjustment. In making the calculation the financial situation of the
Organization and the changes in the salary levels at three national and international agencies
headquartered in Washington, D.C., were to be taken into account: the United States Civil Service,
the Pan American Health Organization, and the Inter-American Development Bank. According to the
document, the comparator index was to assign equal weight to each of these three organizations so as
to avoid giving undue preference to a national entity or to one of the inter-American agencies.

      Resolution AG/RES. 632 (XII-O/82) authorized the Secretary General to put that personnel
policy into effect subject to the following basic conditions: (1) the amount for personnel in the
Regular Fund was not to exceed 51% of the total of the Fund during 1983; (2) the level of direct
services in the Regular Fund approved by the eleventh regular session of the General Assembly was
to be maintained in 1983; (3) the implementation of this new personnel policy was subject to the
availability of cash in the Regular Fund; (4) in accordance with resolution AG/RES. 498 (X-O/80), in
each year thereafter, the proposed cost-of-living adjustment supplement was to be presented by the
Secretary General and its adoption would be subject to approval by the competent organs; (5) the staff
would have to agree to the new system that was to replace parity with the United Nations; and (6) the
staff was to waive any future claims deriving from or related to the objective of parity.

      Pursuant to that mandate, the Secretary General, in the name of and on behalf of the
Organization, and the President of the Staff Association signed an Agreement on the Implementation
of a New Salary and Emoluments System (CP/CPP-1697/83). This document, dated May 10, 1983,
contains a paragraph concerning the cost-of-living adjustment that reads as follows: "In accordance
with AG/RES. 498 (X-0/80) and AG/RES. 632 (XII-0/82), the comparator index described in
document CP/doc.1177/81 will be used annually by the Secretary General as the basis for the
projected cost-of-living adjustment supplement to be included in the proposed Program-Budget
submitted for approval of the General Assembly."

     Also pursuant to that mandate, the staff waived the application of the new policy retroactive to
September 1980 and accepted the 1981 salaries as the base; the important thing, however, is that they
approved the new system that the Organization and the Staff Association, via a referendum, had
agreed upon.

     On July 8, 1983, the Secretary General sent the Subcommittee on Program and Budget of the
Preparatory Committee of the General Assembly a communication in which he announced that the
proposed cost-of-living adjustment had been computed in accordance with the May 10, 1983,
Agreement with the staff. According to the Secretary General, in making the calculation the increases
paid at national agencies and other international organizations had been considered, as called for in
document CP/doc.1177/81 add. 1, and so had the Organization's financial situation, as required by
resolution AG/RES. 498 (X-O/80).

    In 1983 the adjustment proposed by the Secretary General was 4.93%, even though the full
comparator-based COLA was 7.48%. The General Assembly approved only 3%.

    In the years thereafter, the Secretary General presented cost-of-living adjustments that included
100% of the comparator, which the General Assembly consistently lowered. For 1985 the Secretary
General proposed 9.14% and the Assembly approved 5.16%; for 1986 he proposed 6.42% and the

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Assembly approved 2%; for 1987 he proposed 6.94% and nothing was approved; for 1988 he
proposed 10.69% and 4% was approved; for 1989 he proposed 8.45% and nothing was approved; for
1990 he proposed 13.70% and 8.5% was approved; for 1991 he proposed 9.89% and 5.4% was
approved. That is, the Assembly approved no adjustment whatsoever for 1987 and 1989.

      For 1992 the Secretary General requested a cost-of-living adjustment of 14.37% and for 1993 he
projected another 4.45%. However, he provided no viable means of financing the adjustment within
the budget of the Regular Fund; instead he proposed that it be financed by increasing the quotas of the
member states. The Committee on Administrative and Budgetary Affairs rejected the proposal,
arguing that the member states were not in a position to increase their quotas. The General Assembly
granted no adjustment at all when it approved the Program-Budget 1992-1993, although
subsequently, by resolution AG/RES. 1177 (XXII-O/92), of May 23, 1992, it did give a 6.5% cost-of-
living adjustment supplement effective July 1, 1992. It approved no cost-of-living adjustment for the
first half of 1992.

      From the foregoing it may be concluded that regardless of whether the amounts proposed and
ultimately approved were the true or correct ones, the fact is that (a) the comparator system was
legitimately and validly established by the General Assembly in its resolutions AG/RES. 498 and 632
and was implemented by virtue of the 1983 Agreement between the General Secretariat and the staff,
and (b) the system is still in effect, as are the mutual obligations and rights of the parties
(Organization and staff) arising from that Agreement. The Agreement cannot be rescinded
unilaterally unless it is nullified by this Tribunal or revoked, replaced, or amended by the
Organization with the consent of both parties. However, so long as the Agreement remains in force, it
is valid and produces subjective rights for the employees of the Organization.

      Evidence of this is that, as the attorney for the Complainants states in his reply, the parties to this
dispute are now negotiating a new cost-of-living adjustment system to amend or replace the one now
in effect, [See, inter alia, "OAS Salaries and Benefits, Statement and Proposal by the United States,"
OEA/Ser.G/CP/CAAP-2058/94, of February 23, 1994; see also "Projected Cost of the System of
Salary Parity between the OAS and the United Nations under the Proposal Made by the United
States," OEA/Ser.G/CP/CAAP-2066/94, of March 15, 1994; "Proposal by the Chairman of the
Administrative and Budgetary Affairs Committee on a New System of Salaries and Benefits for the
Staff of the General Secretariat of the Organization," OEA/Ser.G/CP/CAAP-2080/94, of April 22,
1994; "Summary of the Meeting of April 14, 1994," paragraph 1, "Salary system,"
OEA/Ser.G/CP/CAAP/SA.298/94, of April 11, 1994; "Program of Weekly Meetings at Headquarters,
May 9-13, 1994," Rev. 1, scheduling for Monday and Friday, May 9 and 13, 1994, two joint meetings
of the Administrative and Budgetary Affairs Subcommittee and Committee (to consider the
adjustment proposal for the 1995 budget and the salary system), pp. 1 and 3; "Note of the Secretary
General Transmitting the Agreement with the Staff of the Secretariat with a View to Establishing a
New System of Salaries and Emoluments in Resolution AG/RES. 1177 (XXII-O/92),"
OEA/Ser.G/CP/doc.2310/92 corr. 1, of October 26, 1992.]

    All this shows that if a meeting of minds were reached a new system would replace the old one,
which also originated in an agreement like the one now being negotiated between the Secretary
General and the President of the Staff Association. The Secretary General himself said in October
1992:

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This negotiation was necessary because the present system of remunerations based on the
COMPARATOR cannot be changed without the prior approval of the personnel. This happened
before when the Organization decided to abandon the policy of parity; the new wage system was
submitted to the staff for consideration and approval in a referendum. The current salary system is an
integral part of a contractual agreement that cannot be modified unilaterally, as has been repeatedly
established by the tribunals of several international organizations, the Administrative Tribunal of the
OAS in judgments 37 and 64 and the General Assembly of the OAS in resolutions AG/RES. 632 and
1177. [See "Note of the Secretary General Transmitting the Agreement with the Staff of the
Secretariat with a View to Establishing a New System of Salaries and Emoluments in Compliance
with Resolution AG/RES.1177 (XXII-O/92)," OEA/Ser.G/CP/doc.2310/92 corr. 1, of October 26,
1992.] (Emphasis added.)
      Clearly applicable here, then, in the view of the Tribunal, is the legal axiom that things,
agreements, or contracts are unmade by the same procedure, the same expression of intent, and the
same parties that made them. This general principle of public law is known as the theory of the
contrary action--an action that rescinds another action if the contracting parties intend to extinguish or
replace, as in this case, their previous bilateral contractual relation.

     Obviously, the new agreement will need to be embodied in a formal document and submitted for
staff approval with the necessary waivers. Lastly, it will have to be approved by the General
Assembly, the source of formal, written law for the Organization of American States, and will be
binding and mandatory for both parties.

IX. THE COMPARATOR SYSTEM IS A LEGAL OBLIGATION OF THE ORGANIZATION OF
AMERICAN STATES

     It is difficult to accept as a matter of law that the Organization has no system of any kind to
determine cost-of-living adjustments for its staff.

     Resolution AG/RES. 1137 (XXI-O/91), on the 1992-1993 program-budget, asked the Permanent
Council for a study of the comparator system that would take account of the difficulties encountered
in applying that system. The study was to consider0, furthermore, the interest shown by the staff in
obtaining parity with the United Nations, that is, in returning to the cost-of-living adjustment system
that was in force before the comparator.

     Both this and the previously mentioned circumstance that the parties are negotiating a new
system to replace the comparator show, without a doubt, that there is indeed in the Organization of
American States a cost-of-living adjustment system that was amended but not eliminated by
resolution AG/RES. 632. This system is a legal obligation that is binding on the Organization and,
correlatively, a staff right.

      So true is this that, except for 1987, 1989 and the first half of 1992 adjustments were paid. And it
is true as well that every year except 1984 the adjustment proposed by the Secretary General was
based on the comparator but the General Assembly ordered it reduced or not paid at all, as was said
above.

    Chapter I of this Judgment notes that the General Assembly may eliminate, reduce, or replace
budgetary items under Article 53 of the Charter of the Organization, but this does not eliminate the
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obligation of states, in the present case the Organization as an international public entity, towards
their creditors and, specifically, towards the staff of the Organization.

 X. REMUNERATION AS AN ESSENTIAL ELEMENT OF THE EMPLOYMENT CONTRACTS
OF OAS STAFF

      Separate consideration must be given, in connection with the finding above, to member
countries' setting conditions on the payment of their quota arrearages. Some member countries may
condition their payment on the use of the funds for specific discretionary spending (as the Respondent
asserts in his response) other than the salaries or benefits the Organization owes its staff and has not
paid precisely because those debtor countries have not met their legal obligation to pay the quotas
they owe.

     Clearly, however, it is not for this Tribunal to determine whether or not such conditions are valid
in the area of relations governed by public international law.

      Even so, we must make it clear that since salary is the most important element of the
employment contract, as was established by the Tribunal in Judgment No. 13, Alaniz v. Secretary
General of the OAS (1975), the Organization of American States may not, without violating the
acquired rights of the staff and the legal rights and principles governing its structure and operation,
refrain from paying the salary and other emoluments it owes its staff.

     Salary, as the fundamental element of the employment contract, is a human right protected by
the various international standards on human rights and in particular Article XIV of the American
Declaration of the Rights and Duties of Man.

     The Tribunal consequently believes that even though it is not empowered to rule on this
sovereign act by a member state, a function that belongs to other bodies, it does have jurisdiction to
ensure that the Organization meets its employment obligations.

       The Tribunal has no control over mortgage prepayments and the financial or banking
commitments of the Organization. Nor can it control the allocation of financial resources to other
ends such as the remodeling or maintenance of buildings, which, if only in part, directly benefit the
staff in that they involve the workplace and it is obvious that an environment that is clean, dry, light,
healthful, peaceful, quiet, and so on, will make for a better and more efficient public service.

      Nevertheless, the Tribunal is of the opinion that no investment policy or method of budgetary
allocation may violate the fundamental or basic rights of the staff of the Organization, among which
are, above all, salary and other emoluments and a sound retirement fund that ensures a decorous and
secure old age for the staff. Part of the essential element consisting of salary and other emoluments is
the cost-of-living adjustment, whatever the established system and the method or procedure for its
annual or biennial approval may be.

     Now, if a system of compensation for cost - of - living is subject to the availability of financial
resources on the part of the Organization, this means in law that the right of the creditor-staff is being
done away with for the benefit of the debtor-employer, who, to evade the legally agreed obligation,
simply does not pay it or diverts the funds to other ends.

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      Actually, there is no comparator or parity or any other system capable of preserving the
purchasing power of the Organization's salaries if payment depends on the will of third parties, in this
case the sovereign states that are under an obligation to pay but fail to do so for reasons that need not
be discussed here. More simply, a staff member has acquired a subjective right --and thus a legal and
contractual right-- from the Organization, not from the member states or the General Assembly or the
Permanent Council or the Secretary General personally. These, we repeat, were not parties to the
employment contract. One party was the Organization, acting as a legal entity or person represented
by the Secretary General, and the other was the staff members individually.

     It may be concluded, then, that the cost-of-living adjustment is an indisputable right of the staff
of the Organization, even if receiving it hinges on there being in fact enough funds to pay it; hence
the phrase "subject to the financial situation of the Organization." Otherwise, the only possible
conclusion would be that, as a practical matter, the OAS has no system to preserve or adjust the
purchasing power of its salaries, something that is not admissible. In this regard, and so long as it is
not changed with the approval of the staff, the applicable system is that of the comparator.

      The foregoing discussion of salaries, emoluments, and retirement is based on Article 125 of the
OAS Charter, which seeks--and its executive, legislative, and technical organs should so provide--an
efficient, competent, and honest staff. This is the only way the Organization will be able to compete
on the international market for the staff members best qualified to meet such requirements. For that
purpose it is essential that the Organization adopt and respect a remuneration system providing equal
treatment, security, and, above all, fairness. In this connection the Secretary General said in October
1992:
" . . . In not offering conditions comparable to those on the employment market the Organization is
finding it increasingly difficult to recruit and retain qualified personnel with the academic and
professional backgrounds needed for the functions to be performed." [See "Note of the Secretary
General Transmitting the Agreement with the Staff of the Secretariat with a View to Establishing a
New System of Salaries and Emoluments in Compliance with Resolution AG/RES. 1177 (XXII-
O/92)," OEA/Ser.G/CP/doc.2310/92 corr. 1, of October 26, 1992, p. 2.]
XI. THE PROCESS OF STAFF REDUCTION

      The process of staff reduction, as was shown during the oral proceedings, sought and in fact
managed to reduce the financial costs of the Organization. Its goal and objective of adjusting the
financial obligations of the member states of the Organization was sound, for the quotas of those
states are the main source of funds with which to pay the salaries and other emoluments of the staff. If
the member states fail to pay, the Organization cannot honor its legal commitments, internal and
external.

     This Tribunal believes that eliminating direct services to the member states cannot be as serious
as nonpayment of salary commitments. The former means that services are interrupted or canceled.
The latter, on the other hand, means an unquestionable breach of the individual employment contracts
binding the Organization and its employees and constitutes an unlawful or undue enrichment that
involves the use of another's work without providing proper compensation.

     In conclusion, it must be remembered that the staff was reduced between 1983 and 1993 while
services were not reduced. On the contrary, as the testimony showed and as the representative of the

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Secretary General said in his brief of September 30, 1992, direct services and programs increased and
the same staff were assigned the duties of the personnel who were eliminated. The Secretary General
himself said:
In my opinion, the staff has suffered not just a very significant loss of purchasing power, but in the
process, as a result of a drastic reduction in force, have had to assume additional responsibilities to
carry out the mandates of the General Assembly. [See "Note of the Secretary General Transmitting
the Agreement with the Staff of the Secretariat with a View to Establishing a New System of Salaries
and      Emoluments        in      Compliance       with     Resolution     AG/RES.      1177(XXII-
O/92),"OEA/Ser.G/CP/doc.2310/92 corr. 1, of October 26, 1992, p. 2.]
XII. VEGETATIVE INCREASES

      It must be pointed out that the cost-of-living adjustment system is an exclusive right, and thus
exclusive of any other financial benefit or emolument owed by the Organization to the staff. In other
words, vegetative increases, increases in basic salaries, incorporation of the COLA into pensionable
salaries, and remuneration increases originating in reclassifications are independent actions with
different legal and material causes because they are based on the resolutions, agreements, and legal
rules that give rise to them. They are, however, directly connected in that they are part of the total
financial benefits the staff receives by being employed in the Organization.

XIII. PARITY WITH SALARIES OF THE U.S. CIVIL SERVICE

      The Secretary General himself acknowledged in document CP/doc.2310/92 corr. 1 that the
salaries of the Organization have been linked for many years to those of the U.S. Civil Service. He
even added that from January 1983 to January 1992, OAS remuneration was outpaced not only by
inflation but by the salaries and benefits paid by the U.S. Government to its employees. On this point
he said:
In the yearly discussions of the cost-of-living adjustment the position that such adjustments should be
equal to or below those received by employees of the United States Government has been a strong
argument. In fact, from January 1983 to January 1992 OAS remuneration lagged not only behind the
rate of inflation but also behind those granted by the United States Government to its employees. . . .

It is a fact that in the level of its remunerations the OAS has been below other agencies. For example,
according to estimates of the General Secretariat, OAS remunerations were 45% below those of the
Inter-American Development Bank and 23% below those of the Pan American Health Organization.
The other element in the comparator formula, the United States Civil Service, in which remunerations
currently average 1.9% above those of the OAS, is projecting increases to place them on a par with
the private sector in recognition of its loss of competitiveness in the labor market. [See "Note of the
Secretary General Transmitting the Agreement with the Staff of the Secretariat with a View to
Establishing a New System of Salaries and Emoluments in Compliance with Resolution AG/RES.
1177 (XXII-O/92)," OEA/Ser.G/CP/doc.2310/92 corr. 1, of October 26, 1992, pp. 3-4.] (Emphasis
added.)
     The Tribunal takes the view that this policy, acknowledged in writing by the Secretary General
himself, is contrary to resolution AG/RES. 632 (XII-O/82) of November 21, 1982, and document
CP/doc.1177/81 add. 1, which provided that the cost-of-living adjustment system should have been
established on the basis of the adjustments made by the Pan American Health Organization, the Inter-

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American Development Bank, and the U.S. Civil Service. By taking those parameters individually or
exclusively rather than jointly, the General Assembly patently violates its own resolution and that
document and indirectly injures the contractual rights of the Complainants.

XIV. THE DIFFERENCE BETWEEN OBLIGATION AND PAYMENT

     Under the standards and principles of labor law, any continuing financial benefit that an
employer gives a worker is incorporated ipso jure into his remuneration and becomes a contractual
obligation.

     It has been shown that a COLA or cost-of-living adjustment system has always existed in the
Organization and forms an integral part of the employment contract as a substantive right, in
accordance with modern labor-law doctrine. It is up to the employer to show that this adjustment has
not been incorporated into the contract, which has not occurred in the case sub judice. On the
contrary, it has been shown that the comparator was substituted for the parity adjustment through
consensual, legally binding, and genuine negotiation. It has also been shown that there was even a
referendum in which the staff accepted the comparator system and renounced parity with the United
Nations and, what is more important, that staff and Organization representatives are currently
negotiating a return to parity with the United Nations. This inexorably leads us to the conclusion that
the cost-of-living adjustment system constitutes an integral part of each and every employment
contract that members of the Organization staff have signed.

     Furthermore, if for budgetary or other reasons the General Assembly reduces or rejects the
Secretary General's pay proposal, this does not mean, as has been said above, that the debt or credit,
or more specifically the right, is extinguished. We must make a legal distinction between obligation
and payment. This Tribunal considers that the Organization does have an obligation arising from its
role as an employer. This obligation results from articles 53 and 118 of the Charter, resolutions
AG/RES. 498 (X-O/80) and AG/RES. 632 (XII-O/82) of the General Assembly, and the Agreement
on the Implementation of a New Salary and Emoluments System (CP/CPP-1697/83), signed by the
President of the Staff Association and the Secretary General on May 10, 1983, and finally approved
by the OAS staff in a referendum.

      The obligation to pay a cost-of-living adjustment (COLA) in accordance with the current
comparator system is legal and binding unless a new system is agreed upon or unless the current one
is replaced or terminated by the Organization and its employees. But while the debt is real, it has not
actually been paid, precisely because the sovereign states that make up the Organization have been in
arrears with the payment of their quotas. These debts of the states to the Organization, however,
cannot affect third parties to the contractual obligation, such as employees or officials of the
Organization.

     Nor can the General Assembly approve the cost-of-living adjustments proposed by the Secretary
General if the sovereign member states have not paid the quotas that they are legally and morally
bound to pay. In short, as the legal adage goes, impossibiliam nemo tenetur (no one is required to do
the impossible), which in this case means that no payment can be made when the funds needed for the
payment do not exist. Not even the member states' representatives to the Organization have the legal
power to force the payment of contributions to international organizations, a decision that in some
cases falls to each member state's Legislative Assembly or Executive Branch, or both.

                                                                                                 31/59
  In this regard, however, it must be recognized that the Organization's deficit has been eliminated
and that the Regular Fund shows a considerable positive balance, which demonstrates that the
Organization's financial position has improved, as the Secretary General specifically points out in his
Annual Report on the Activities and Financial Situation of the Organization, 1993-1994:

     Biennium ended December 31, 1993
The financial position of the Regular Fund continued to improve in 1993. The financial deficit in the
Regular Fund, which is financed from the member states' quotas, decreased from US$31.5 million in
1989, to US$21.5 million in 1990, and to US$10.4 million in 1991. At December 31, 1992, the deficit
was eliminated and the Regular Fund has a positive fund balance of $3.8 million - its first positive
balance since 1980. In 1993 the Fund balance increased to $16.3 million. Uncollected quotas due
from member states decreased by $22.2 million during the year to $34.9 million at December 31,
1993, compared to $57.1 at the beginning of the biennium.

Because of the Organization's financial crisis, which lasted more than 10 years, the General
Secretariat was forced to postpone much of the normal maintenance and repair of its buildings. In
addition, during that same period, the membership of the Organization grew, thereby outgrowing the
meeting capacity of the Headquarters Building. Recognizing these problems and taking into account
the additional resources which were to become available, the General Assembly and the Permanent
Council, pursuant to the authority delegated to it by the General Assembly, have approved
extraordinary appropriations for 1993, 1994, and 1995 of about $16 million for long-delayed
maintenance work in all the General Secretariat's buildings and a major renovation project for the
Headquarters Building as well as for other purposes. Thus, while the Regular Fund has achieved a
positive Fund balance, the Fund balance only meets the financing for activities already approved to
deal with matters pending execution for over a decade. The present positive fund balance will not
permit the Organization to undertake new mandates for programs which will have to be dealt with
within the budget process and with additional resources. (Annual Report of the Secretary General on
the Activities and Financial Situation of the Organization, 1993/1994, OEA/Ser.D/II-44, p.149.)
(Emphasis added.)
XV. GENERAL PRINCIPLE OF GOOD FAITH

      In any event, universal legal doctrine recognizes that, to be legitimate, the loss or change of a
subjective right must always be preceded by the standards and principles of due process. Likewise, in
the event that the subjective right is revoked for reasons of public interest, the person who stands to
lose the right must first be heard and convinced, and if the decision is ultimately adopted, it must
provide for the payment of damages. In the case sub judice, this Tribunal considers that staff
members' rights are indeed contractual in origin and that in accordance with the universal principle of
pacta sunt servanda, which means that a contract is legally binding on the parties, neither of the
contracting parties may unilaterally impose its will on the other unless the contract is nullified. This is
a bilateral or doubly binding contract, and calls absolutely and necessarily for the consent of the other
party if it is to be amended, replaced, or dissolved.

     This Tribunal upheld this view in its Judgment No. 37, Buchholz: ". . . The Tribunal reaffirms its
previous ruling that decisions of the General Assembly form part of the contracts and may not be
rescinded unilaterally. . . ." In the view of the Tribunal, this applies to all other financial
compensation (emoluments, adjustments, and other benefits).
                                                                                                     32/59
      In Judgment No. 64, Chisman, the Tribunal held: "In Alaniz (Judgment No. 13), this Tribunal
has cited the well-known principle of labor law that, normally, not even the will of the parties is
sufficient to change the contract to the point of reducing workers' wages. A reduction in salaries,
when made unilaterally by the employer as in the present case, without the consent of the employees,
constitutes a manifest disregard for the proper balance of the employment relationship, which cannot
be justified in even the most difficult situations, since the General Secretariat has the possibility in
such cases of using other legal means for dealing with them."

      The principles of labor law, echoing legislative and even constitutional texts, establish as well
that employment rights may not be waived. Modern legal doctrine, however, allows for waivers of
financial benefits provided the employee accepts them formally and solemnly in order to preserve his
employment (see Guillermo Cabanellas, Book I, Vol. 2, "Parte General," in Tratado de Derecho
Laboral, Doctrina y Legislación Interamericana, pp. 39-40). Preset reservations or conditions that
make labor rights contingent on actual ability to pay (the financial capacity of the employer) are not
legally possible under labor law, though they are accepted in public international law--international
treaties or conventions, specifically.

      Legal relations in general, and above all those deriving from contracts, rest on a clear standard
that serves as a guide to their interpretation; this is known as the general principle of good faith. It
holds that rights must be exercised and asserted in the conviction that a thing is done or possessed on
the basis of legitimacy, truth, sincerity, and candor.

      The following paragraphs are quoted from the Manual de los Contratos by Guillermo A. Borda,
Tenth Edition, Editorial Perrot, pp. 52 and 53: "65. (a) Good faith. 1) The judge should not follow
strictly and blindly the technical-legal meaning of the words used or the behavior of the parties. 3)
Clauses setting out intent should not be interpreted in isolation but in their general context." The
author goes on to say: "66. The circumstances of the case. The factual circumstances that made up
`the climate' in which the intent was stated are of decisive importance in interpreting it." On the
principle of good faith, see also Judgments No. 8, Uehling v. Secretary General of the OAS, 1974,
and 17, Martínez v. Secretary General of the OAS, 1975.

      The Tribunal has established in this Judgment that salary and emoluments are an essential
element of the contracts of OAS staff and that the comparator system for cost-of-living adjustments is
part of those contracts. The system is a legal obligation binding on the Organization and,
correlatively, a right of the staff, and may be replaced only through an agreement between the
Organization and the staff.

     The Tribunal has also established that it is not admissible for a cost-of-living compensation
system, whatever the method used in calculating it, to be subject to the availability of funds to the
employer.

      Accordingly, when resolution AG/RES. 498 (X-O/80) makes the payment of comparator-based
adjustments contingent on the financial capacity of the Organization, this must be interpreted to mean
that the system applies at all times, barring exceptional financial circumstances or force majeure. As
was said above, the application of the system cannot be made to depend on a unilateral statement of
intent by the party obligated; otherwise, there would be no obligation and there would have been no
good faith in entering into the contract.

                                                                                                  33/59
      This Tribunal believes that the 1983 Agreement between the Organization, represented by its
Secretary General, and the President of the Staff Association, which replaced the United Nations
parity system with the comparator, was entered into in good faith. Consequently, in interpreting it
within its context and according to the climate in which the intent was stated, the only possible
conclusion is that the Organization undertook to apply the new system in full, unless prevented by
financial circumstances or force majeure.

XVI. THE OBLIGATION TO PAY VIS-À-VIS THE FINANCIAL SITUATION OF THE
ORGANIZATION

      The Tribunal holds that the Organization has an obligation to pay but recognizes, at the same
time, that exceptional circumstances or force majeure may temporarily prevent it from meeting its
legal obligation.

      Bearing that reality in mind, the legal tenet being applied here is that obligations are
extinguished only in the manner provided for by the internal legal system of the Organization and by
general principles of law such as waiver, payment, expiration, and indemnification, and not in any
other way such as the nonpayment of quotas by the member states.

      Putting together both aspects--the nonpayment of quotas by the member states and the legally
binding nature of the obligation--the Organization must open a special account on behalf of the
General Secretariat staff, managed by and under the responsibility of the Treasurer, to set up a reserve
for the employees, which shall be used solely and exclusively for paying any benefits owed by the
Organization to its staff. The reserve shall be carried on the books and shall be paid out as the
member states become current in meeting their financial obligations to the Organization by paying
their quotas. [See articles 6 and 54 of the Charter and resolution AG/RES. 900 (XVII-O/87), in which
the General Assembly stated that "payment of quotas and contributions is a legal commitment of the
member states to the Organization of American States"; see also "The Mandatory Nature of the
General Assembly Resolutions Setting the Quotas that the Member States are to Contribute to Fund
the OAS," document OEA/Ser.G/CP/doc.1907/88 of July 7, 1988, pp. 1-2, prepared by the General
Secretariat of the OAS and placed before the Permanent Council of the Organization. See also the
Advisory Opinion "Certain Expenses of the United Nations (Article 17, paragraph 2 of the Charter)"
dated July 20, 1962 (I.C.J., Recueil, 1962) of the International Court of Justice, cited also by the
General Secretariat of the OAS in the aforesaid document, in which the Court upheld the binding
nature of quota determinations made by the UN General Assembly, and a memorandum from the
United Nations Legal Counsel dated August 7, 1978, in which he maintained that Article 17 of the
UN Charter "imposes on members the legal obligation to pay the quotas set for them by the General
Assembly" (Digest of United States Practice in International Law, pp. 225-226).

By virtue of the foregoing, the Tribunal

RESOLVES:

     1. To declare itself competent, in view of the subject matter, to hear this complaint, on the basis
of Article II.1 and 2 of its Statute.

     2. To deny the Respondent's objection of res judicata.

                                                                                                  34/59
     3. To declare that salary and other emoluments owed by the Organization to its staff constitute a
basic or essential element of the individual employment contract.

     4. To declare that the cost-of-living adjustment system known as the "comparator" is fully in
force.

     5. To declare that this system is unconditional and may be eliminated or amended only if the
standards and principles of due process are followed or by agreement between the Organization in its
capacity as employer and its staff or employees.

     6. To declare that the financial resources of the Organization must be used to pay as a priority
what is owed to the staff for the COLA based on the full comparator.

     7. To declare that in cases where because of extraordinary financial circumstances or force
majeure the Organization of American States may be unable to make its payment under the
comparator system or any other system agreed upon with the staff, an individual credit on behalf of
each creditor employee shall be opened, which shall be eliminated when the funds necessary to pay
the amount owed become available and such payment is made.

     8. To declare that the 479 Complainants listed in Appendix A of this Judgment duly exhausted
the administrative grievance procedure and are therefore the only Complainants in this matter.

    9. To declare that the 73 Complainants listed in Appendix B of this Judgment are not admitted as
Complainants because they did not request a hearing from the Secretary General under Staff Rule
112.1.

     10. To declare that the four persons listed in Appendix C of this Judgment are not considered
Complainants because, the written request from the Secretariat of the Tribunal notwithstanding, they
did not file in due time and proper form the authorization required by Article 22.1 of the Rules of
Procedure of the Tribunal to enable the attorney for the Complainants to represent them in this matter.

     11. To declare with respect to the 479 procedurally legitimate Complainants that their rights to
the COLA adjustments extend under the statute of limitations only to one year prior to the date on
which each of them requested the hearing provided for in Staff Rule 112.1.

     12. To declare that the Organization must recognize or pay to the Complainants compensation
equivalent to the difference between the COLA actually paid by the Organization and what it should
have paid under the full comparator. This compensation shall apply from one year prior to the date on
which each Complainant requested the hearing provided for in Staff Rule 112.1 to the date of this
Judgment.

      13. To declare that with respect to Complainants in active service the Organization may choose
to pay the compensation referred to in the preceding paragraph by means of paid annual leave or early
retirement with the right to emoluments equivalent to the amount owed, provided that the service
needs of the Organization are not adversely affected in efficiency and continuity.




                                                                                                 35/59
      14. To declare that this compensation must be paid in cash to those Complainants who have
retired or have ceased to be employees of the Organization, from the date indicated in operative
paragraph 12 until the date of their separation from service.

      15. That the General Secretariat shall pay the Complainants the amount of US$100,000 for
attorney's fees.

    16. Any petitions of the Complainants not expressly granted in the operative part of this
Judgment are denied.



Let notification be given.

                                                                Washington, D.C., May 13, 1994



Enrique Ponce y Carbo, Esq. / President

José Ajuricaba da Costa e Silva, Esq. / Vice President

Enrique Rojas Franco, Esq. / Judge

Martha Braga, Esq. / Secretary

                                           APPENDIX A

                       PROCEDURALLY QUALIFIED COMPLAINANTS



A
1. 0111 Abood de Prado, Ivette

2. 0141 Acosta, Carmen M.

3. 0274 Albarracín, Ana Ma.

4. 0849 Alemán, Gladys B.

5. 0321 Alfonso, Guillermo

6. 0328 Alleyne, Michael

7. 0327 Almánzar, Sonia

8. 7170 Alphonse-Pierre, Syla

9. 0356 Altamar, Clara I. Estrada de

                                                                                          36/59
10. 0390 Alvarado, Gloria A.

11. 0385 Alvarez, Luz Marina

12. 0396 Amas, Rigoberto

13. 0476 Angulo, María Teresa R.

14. 0484 Anillo, Hortensia A.

15. 0512 Aramayo, Myriam L.

16. 0528 Arantes, Mariza Cristina T.

17. 0539 Araujo Castro, Carmen B. de

18. 0541 Araujo, Carlos

19. 0570 Archondo-Mendieta, Cesar S.

20. 2953 Anderson, Nora

21. 5854 Armendariz, Carmen

22. 0584 Armendariz, Edwin

23. 0599 Arguello G., Tomás

24. 0609 Arriagada R., María Sonia

25. 0628 Ashton, Joseph

26. 0748 Astudillo, Gladys

27. 0676 Avendaño, Carmen

28. 0725 Azofeifa, Melida L.


B
29. 0735 Bacigalupi, María

30. 0780 Baldwin, María-Eugenia

31. 6587 Ball, Estela

32. 1281 Banisadr, Allahi B.

33. 0828 Baptista, Romulo C.

                                       37/59
34. 2108 Baracat, Lucrecia

35. 0884 Barreto, Leonor Salcedo de

36. 0957 Bautista, Pablo E.

37. 1013 Bellis, Martha G.

38. 1017 Bellegarde, Serge

39. 1020 Belt, Guillermo A.

40. 4971 Beltrán, Tulia E.

41. 1051 Benito, Hugo O.

42. 1062 Bender, Stephen

43. 1059 Benson, Susan Shattuck

44. 1078 Berly, Gladys

45. 1105 Bernardes, Lincoln

46. 1095 Bernasconi, Francisco

47. 1138 Betancourt Murillo, Fabian

48. 1153 Bezerra, João F.

49. 1158 Bianchini, Luigi Fernando

50. 1164 Bickerdyke, William J.

51. 1154 Bhaghwandat, Partapsing

52. 1183 Blanco, Enrique

53. 1187 Blanco, Felix A.

54. 1188 Blanco, Ramiro

55. 1215 Bocanegra, Clemencia

56. 1553 Bolaños, Elena

57. 1237 Bonariva, Pilar G.

58. 1255 Borges, Francisco de Assis Sena

59. 1302 Bozzolo, Lucía

                                           38/59
60. 1327 Bravo Gomez, Fernando

61. 1335 Bradley, Eduvigis H.

62. 1332 Breton, Anne-Marie R.

63. 1351 Brierre, Rose-Marie

64. 1370 Brown, Cynthia Caroline

65. 1368 Brown, Paul A.

66. 1399 Bundel, Lilian M.

67. 1437 Busch, Maritza E.

68. 8615 Butron, Luigina


C
69. 1497 Cabrera, Pedro

70. 1517 Cáceres, Amira

71. 1516 Cáceres, Horacio

72. 1536 Callender, Dorel

73. 1550 Calonje, Armando

74. 1548 Camarena, Cesar H.

75. 1568 Campbell, Shirley

76. 1625 Cano Martínez, Haile E.

77. 1638 Carbon, Stephen

78. 1639 Carbonel, Elena

79. 1668 Carmelino, Daisy P.

80. 1704 Carreño, Eugenio

81. 1708 Carrillo, Josefina

82. 1716 Carrillo, María Socorro

83. 1741 Casañas, Roberto Luis

                                   39/59
84. 6473 Casselman, Caroline M.

85. 1770 Castaño-Dominguez, Bertha

86. 1773 Castillo Almendarez, Victoria

87. 1813 Castillo-Rivillas, Rosa

88. 1831 Castro, Gerardo R.

89. 1842 Castro, María de los Angeles

90. 1878 Cavada, Fernando F.

91. 5892 Cavero, Rosa Mejia de

92. 1889 Caycedo, Alfonso

93. 1962 Chali-Cuellar, Luisa

94. 1961 Chaves, Rina María

95. 2006 Chellew, Patricio E.

96. 2030 Chisman, Anna McG.

97. 2054 Ciudad-Real, María Mercedes

98. 2059 Cinco, Gloria

99. 2107 Cobian, María

100. 2111 Cobas, Ruben

101. 2130 Colareta, Carmen

102. 2183 Contreras Morales, Gregorio

103. 2191 Conner, Lily M.

104. 2193 Connolly, Ruth Marie

105. 2208 Cordeiro, Newton V.

106. 2234 Coria, R. Gustavo

107. 2240 Correa Errazuriz, Augusto

108. 2248 Corsino, Guillermo A.

109. 2252 Cortez, Rosa L.

                                         40/59
110. 2350 Cuellar, Luis

111. 2360 Cuellar, Beatriz

112. 5177 Cuyún, Francisca Lidia




D
113. 2413 Danin Lobo, Luis Carlos de

114. 2464 Dávila Rivas, Carlos H.

115. 2428 Dater, Suzanne T.

116. 5959 De Mendoza, Beatriz R.

117. 2511 De Oliveira, Wilson

118. 2603 Diamond, Esther

119. 2614 Dias Costa, Mario

120. 2615 Díaz, Daniel

121. 2607 Díaz-Donoso, Carmen

122. 2624 Díaz Franjul, Manuel

123. 2677 Domínguez, Socorro


E
124. 2804 Echalar, Samuel A.

125. 2823 Edwards, Beatrice

126. 2861 Ellis, Matilde A.

127. 2912 Escobar, Graciela

128. 2929 Escudero, Miguel

129. 2934 Esperante Cabañez, Sara

130. 2952 Espinoza, Hugo

131. 2957 Esquivel, Oliva
                                       41/59
132. 2971 Estrada-Jones, Cecilia

133. 6624 Ettori, Ghislaine A.


F
134. 3041 Farias, Rosalia

135. 3044 Farrah, Adelaide G.

136. 5248 Feng Liu, Su

137. 3077 Fernandez, Adelfa G.

138. 3100 Fernández del Hoyo, Tomas R.

139. 3098 Fernández Peredo, Froilán

140. 3233 Flores L., Carlos

141. 7555 Folgate, Teresa

142. 3263 Fonseca, Gladys E.

143. 3262 Fonseca, Jose Luis

144. 6558 Forero, Lucia

145. 5245 Forns-Samso, Ruth

146. 3332 Franco-Cosquillo, Reynaldo

147. 3333 Franco, Olga

148. 3368 Frankenfeld, Miguel H.

149. 3396 Frenkel, Albertina

150. 3360 Fresen, Alexandra L.

151. 3452 Fugon, Enrique J.

152. 3451 Fujimoto G., Gaby


G
153. 3462 Gabel, Julia

154. 1636 Galloway, Rosario C.
                                         42/59
155. 3477 Gallegos, Carlos M.

156. 3484 Galdames, Hugo

157. 6717 Galdames, María Cristina

158. 3501 Gálvez, Rene A.

159. 6297 Gallardo, Loida

160. 3516 Gárate, Guido E.

161. 7235 Garcés, Sylvia G. de

162. 3523 García, Jorge D.

163. 2342 García, María Soledad

164. 3529 García, Máximo A.

165. 3612 García, Paul R.

166. 3628 García, Rudolph T.

167. 3677 Garnham, Jose A.

168. 3700 Gautier, Max A.

169. 3732 Gil, Mario R.

170. 3733 Ginestar, Angel

171. 2943 Giraldo, Dania

172. 3754 Girón, Zoila

173. 3768 Gjivoje, Ricardo

174. 3783 Gluch, Bernardo

175. 3775 Gochicoa, Nelly

176. 3777 Goldie, Juan Carlos

177. 3801 Gómez, Juan Carlos

178. 3812 Gómez, Luis F.

179. 4565 Gómez, María del Carmen

180. 3805 Gómez-Sabaini, Juan Carlos

                                       43/59
181. 3846 González, Carlos A.

182. 3845 Gonzalez, Graciela Flora

183. 3826 Gonzalez, Mario

184. 9447 Gonzalez, Rosemary

185. 3880 Goodin, Wendell R. E.

186. 3896 Gorostiaga, Angel R.

187. 2576 Grossmann, Celia D.

188. 3999 Groves, Marguerite

189. 4013 Guarnizo, Fanny R.

190. 4021 Guerra, Oscar J.

191. 4044 Guilbaud, Adeline

192. 6820 Guillén, Ligia O.

193. 4077 Gunther, Neville M.

194. 4099 Gutiérrez, Flor de María

195. 4097 Gutiérrez, Glenda

196. 4110 Gutiérrez B., M. Consuelo

197. 4126 Gutiérrez, Rene L.

198. 4125 Gutiérrez, Silvia

199. 4114 Gutiérrez, Walter


H
200. 4127 Haddad, Ivonne F. Jacquier de

201. 7538 Hageman, Gabriela

202. 4080 Hamilton, Sebastiana G.

203. 4161 Hanono, Eugenia S.

204. 4163 Harasic, Oscar R.

                                          44/59
205. 4182 Harnecker Pascual de Crawford, Valeria

206. 4162 Haugaard-Bevan, Marcella

207. 4272 Hedges, James Ronald

208. 4301 Heraud, Carmen

209. 4393 Hernandez, María Hilje de

210. 4324 Herrera, Cecilia

211. 4328 Herrera, Hector

212. 4372 Heyman, Arthur M.

213. 4371 Hidalgo, Jose Gilberto

214. 4441 Horvath-Rouco, María J.

215. 3866 Hughes, Sara

216. 4502 Humud, Carlos


I
217. 9006 Ibarra, Luisa T.

218. 4541 Iglesias, Timoteo

219. 4568 Ilijic, Edmundo

220. 4549 Illanes, Luis

221. 8052 Ingram, Gladys

222. 4364 Irañeta, Joan H.

223. 1518 Irigoyen, Nancy C.


J
224. 4620 Jaime, Manuel

225. 4676 Jemio, Humberto

226. 4689 Jimenez, Luis F.

227. 4698 Jiménez, María Alice Alcántara
                                                   45/59
228. 4772 Jordan, Juan Carlos

229. 4780 Jorquera, Gabriel


K
230. 4085 Kalogerakis, Gyliane

231. 4823 Kaufman, Jorge B.

232. 4850 Ketterling, Ada M.

233. 4869 Kiernan, James Patrick

234. 9205 Kirpatrick, María G.

235. 4882 Kohlberg, Mercy

236. 4893 Kosmas, Sofía

237. 4925 Kreimer, Osvaldo


L
238. 4949 La Rosa, Cecilia

239. 5005 Landazuri, Francisco

240. 5035 Larreur, Claude

241. 5118 Lazo, Jaime M.

242. 5529 Leets-Arce, Vanya

243. 5164 Leguizamon, Wilfredo

244. 8953 Leon, Yolanda de

245. 5256 Lizondo, Luis Manuel

246. 5296 Lonardi, Alberto G.

247. 5309 López, Iris Tejada de

248. 5328 Lopez-Caycedo, Alvaro

249. 5374 López-Valle, Julio C.

250. 0616 Loyola-Black, Gloria
                                   46/59
M
251. 5496 Machado, Sandoval

252. 5507 Machicado, Antonio

253. 5513 Machuca, Aura Ligia

254. 5522 Macías, Francisco V.

255. 6642 Madariaga, Mario N.

256. 6891 Mader, Estela

257. 5533 Madinaveitia, Ma. Engracia

258. 5598 Maldonado, José S.

259. 5698 Mari, Manuel

260. 5699 McIntyre, Rosario

261. 5732 Marroquin, Ma. del Rosario

262. 5748 Martínez, Sergio E.

263. 5751 Martins, María Rosane P.

264. 5786 Martinez, Rosa S.

265. 5713 Márquez, Edith

266. 5802 Masaferro, Ernesto

267. 5812 Mason, Orlando

268. 5801 Matho, Luis

269. 5821 Matus, Marvin M.

270. 5866 Medrano, Rebeca

271. 5906 Melendez, Francisco J.

272. 5931 Méndez, Fritz

273. 5946 Méndez, José

274. 5991 Merino, Miguel A.

                                       47/59
275. 6011 Mesa, Agileo de Jesus

276. 6032 Mestre, Eloy

277. 7630 Mestre, Mabel

278. 6034 Metz, Manuel

279. 6037 Meyer, María Julia

280. 6073 Milián, Ramiro

281. 6079 Miller, Cynthia María C.

282. 6095 Minetti, José

283. 6123 Miranda, Paulo C. de

284. 6128 Miranda Rojas, Oscar

285. 6132 Mirkow, José Italo

286. 6141 Molina, Marleng

287. 6144 Molina López, Guillermo Eduardo

288. 6156 Mohan, Jane Anne

289. 6146 Molina, Elba

290. 6179 Monge, Washington

291. 6198 Monroy, Rosalba

292. 6318 Morales, Andres

293. 6319 Montero, Marianella Morales

294. 6329 Morataya Cárcamo, Jorge

295. 6385 Morris, Yolanda W.

296. 6412 Moya, Gilberto W.

297. 6422 Moya, Rigoberto

298. 6160 Mumuni, Pamela A.

299. 6440 Munévar M., Alfonso

300. 6444 Muñoz, Dora

                                            48/59
301. 6449 Muñoz Garcia, Hugo

302. 6512 Murray, Santiago

303. 6518 Murúa, Ricardo


N
304. 6571 Nahm, Doris

305. 6594 Nash, Marcia

306. 6583 Navarrete, Hildebrando

307. 1239 Negron, Nora

308. 4164 Newburn, Darlene T.

309. 6644 Nieto V., Atilio

310. 6659 Nolan, Hilda M.

311. 6910 Nostrand, María Rosa

312. 7191 Nunes Pinto, Marlene Liane

313. 7878 Nunes, Yolanda

314. 6639 Nuñez, Marino


O
315. 6690 O'Brien, Ana Colomar

316. 3828 Odekerken, María A.

317. 6707 Oelsner, Juergen

318. 6722 Olaya, Jose Daniel

319. 6739 Oliver, Miriam

320. 6755 Olmos, Juana

321. 6787 Orgeira-Norton, Lucy


P

                                       49/59
322. 6879 Pachajoa, Mario

323. 6886 Padilla, David J.

324. 6877 Paesky, Efrain N

325. 6904 Palacios, Clara L.

326. 6908 Paldao, Carlos E.

327. 6920 Palma V., José Félix

328. 6934 Paolillo, Julia B.

329. 6935 Park, Wayne R.

330. 6936 Parsons, Patricia

331. 6966 Parra-Bañales, Herminia

332. 6997 Payne, Todd C.

333. 7007 Pedrosa, Hector

334. 7083 Pérez Zaldivar, Alfredo

335. 7104 Perez, Miguel A.

336. 7113 Perina, Ruben

337. 7126 Peró, Florencia

338. 7130 Petersen, Luz María

339. 7139 Petrovich Guye, Olga

340. 7174 Piernes, Guillermo

341. 7175 Piñeyro, Rosina

342. 7240 Pomier, Leopoldo

343. 7266 Poole, Linda J.

344. 9889 Prieto, Lucila

345. 7313 Prime, Timothy


Q

                                    50/59
346. 7391 Quintanilla, Carlos A.

347. 7393 Quintero, Susana


R
348. 7420 Ramírez, Pedro Aníbal

349. 7427 Ramírez, Jeannette

350. 7484 Ramos-Ariansen, Rodolfo

351. 7491 Ramsburg, Susana

352. 5315 Raugitinane, Alicia C.

353. 7526 Renart, Miguel

354. 7543 Redington, Gala

355. 7546 Reina, Ana María

356. 7545 Reis, Edgardo C.

357. 7539 Restrepo, José Luis

358. 7554 Revilla, Alejandro E.

359. 0386 Ribeiro, Roberto

360. 7618 Richardson, Sonia M. A.

361. 7636 Riddle, Martha S.

362. 7510 Riegert, Thomas J.

363. 7667 Rios, Yamandu

364. 7688 Rivas-Antezana, Aida

365. 6846 Rivas-Bibb, Alejandrina

366. 7687 Rivas, Elizabeth Moncada de

367. 7556 Rivillas, Alberto

368. 3539 Robinson, Nelly L.

369. 7764 Rochester, Edric G.

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370. 7763 Rodgers, Kirk P.

371. 7776 Rodriguez, Celso

372. 7820 Rodriguez, Jorge Omar

373. 7830 Rodriguez, Reinaldo

374. 7845 Rodriguez, María Victoria

375. 7875 Rodríguez-Echevarría, Pablo

376. 7904 Roggi, Luis O.

377. 4644 Romero, Martha

378. 7947 Rosenborg, Tomas O.

379. 7975 Rossi, Alberto José

380. 7993 Rovira, Alberto

381. 8015 Ruiz, Hilda

382. 8029 Ruiz, Nelly

383. 8040 Ruberto, Susana Alicia

384. 8042 Ruiz, Fernando José

385. 8035 Ryba, Yolanda Rosa


S
386. 1305 Saghy, Carmen

387. 8153 Sakamoto, Gloria

388. 8166 Salas, Soledad

389. 8178 Salazar, Manuel

390. 8265 Samper, Elsa

391. 8290 Sánchez, Juan

392. 8336 Sandoval, Segundo

393. 8315 Sands, Jorge A.

                                        52/59
394. 8329 Sander, Benno

395. 8346 Sanguinetti, Edwina

396. 8347 Sanguinetti, Raul

397. 8356 Sanmiguel, Delia

398. 8379 Santos, Rosario

399. 8380 Santoscoy, Bertha

400. 8402 Sattler, Geraldine

401. 8405 Saunier, Richard E.

402. 8428 Scarlett, Monica

403. 8432 Scheno, Cosme

404. 8947 Schreider, Mary S.

405. 8468 Scioville, Roberto

406. 8494 Seall, Jorge Antonio

407. 8518 Sejas, Oscar

408. 8550 Sevilla, Eddgard J.

409. 8554 Serrano, Luis

410. 0806 Shortt, Carmen G.

411. 8583 Sierra Nuñez, Antonio

412. 8616 Silva Farina, Gastón

413. 8632 Sims Jr., William R.

414. 8673 Smith, Alan

415. 8692 Soares, K. C.

416. 8787 Spinak, Alicia

417. 8857 Souza Rego, Sonia Ma. de

418. 8856 Soza Martinez, Armando

419. 8925 Stoker, Blen D.

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420. 1388 Suarez-Smith, Sara

421. 8973 Swenson, Lynn A.


T
422. 9029 Tamayo, Joaquín

423. 9046 Taylor, Beatriz

424. 9058 Tello, Ramon Antonio

425. 9096 Tjong-A-Hung, Armand

426. 9108 Tomas, Orlando V.

427. 6941 Tomassoni, Cristina

428. 9120 Tome, Martha V.

429. 9122 Tomelleri, Nancy

430. 9126 Torchia-Estrada, Juan Carlos

431. 9134 Tormo, Tomas S.

432. 9179 Torres Sánchez, Jairo

433. 3081 Tosin, Nubia de

434. 9190 Touya, Silvio

435. 9198 Tovar, Renato

436. 9202 Tragen, Irving G.

437. 9251 Tunnermann, Miriam Rivas de

438. 9252 Turina, Pedro A.


U
439. 4892 Uboldi, Irene K.

440. 9276 Ulyssea, Heitor L. de

441. 9303 Uriona, Rose Marie

442. 9308 Urrego, Carlos
                                         54/59
V
443. 9383 Valera, Antonio

444. 8546 Vales, Lourdes

445. 9386 Valverde, Hugo

446. 9398 Vallejo, Osvaldo

447. 9411 Varela, Jorge L.

448. 9415 Varela, José Luis

449. 9418 Vargas, Ovidio

450. 1182 Vargas, Ana Marina de

451. 9437 Vasquez, Magaly

452. 9484 Velasco-Clark, Manuel

453. 9486 Vélez Trujillo, Eduardo

454. 9513 Ventura, Manuel E.

455. 9518 Vera, Andi Richard

456. 4856 Vera, Diana M.

457. 9536 Vermeiren, Jan C.

458. 9538 Versteylen, Mirtha N.

459. 9581 Vidal, Enrique H.

460. 9583 Vidal Henderson, Enrique Juan

461. 9591 Vieira Jr., David G.

462. 9627 Villalta Jr., Juan A.

463. 9621 Villarroel, Cecilia M

464. 9680 Vizcaino, Domingo

465. 9679 Vizquerra Caceres, Julia


W
                                          55/59
466. 9688 Waak-Pérez, Martha C.

467. 9764 Welch, Thomas L.

468. 9775 Wharton-Lake, Beverly

469. 9797 Williams, Baron

470. 9841 Woods, Terence J.


Y
471. 9864 Yoder, Elizabeth


Z
472. 9896 Zamudio, Valerio

473. 9911 Zapata, Jose N.

474. 9913 Zark , Lesley

475. 9904 Zarzycki, María E.

476. 9907 Zavala, Jorge A.

477. 9925 Zincke, German

478. 9960 Zuñiga, Rolando

479. 9962 Zuñiga, Leonel

                                  APPENDIX B

               COMPLAINANTS EXCLUDED FROM THE LAWSUIT (LITIS)



1. Acevedo, Domingo

2. Arandia, Fernando

3. Archi, Yvonne

4. Avalo, Corina E.

5. Balbi, Rodolfo A.

6. Bello, Enrique
                                                                56/59
7. Benavides, Delia

8. Brickhaus, Orlando

9. Broderson, Víctor

10. Bustillos, Jose A.

11. Carvalho, Getulio P.

12. Castañeda, Sayda N.

13. Cerna, Christina M.

14. Cohen, Ernesto

15. Colaiacovo, Juan Luis

16. Cortina, Aníbal

17. Duarte, Maria Cristina

18. Edmead, Elsa

19. Ergueta, Elsa

20. Euceda, Manuel

21. Fabara, Eduardo

22. Fabbroni, Evelio O.

23. Fernández, Julio

24. Galli, Augusto

25. Garzón, Arturo

26. Goldin, Javier

27. Cano González, Hugo

28. Gonzáles Duperly, Andrés

29. Guerrero, Alba

30. Gulston, Eustace

31. Hadaway, Irene

32. Hahn, Saul

                               57/59
33. Harrington, Lucilia Maria

34. Higgs, Michael

35. Hoover, Margarita A.

36. Hoyos, Luis A.

37. Jiménez, Carlos E.

38. Jiménez, Heidi V.

39. Jiménez, Víctor Manuel

40. Lemos Rego, Paulo Roberto de

41. Linares, María Ester

42. Long, Patricia

43. López, María Elena R.

44. Magos, Maria J.

45. Manzur, Gustavo

46. Martínez, Colón E.

47. Mayor-Osorio, Nelly

48. Mello e Souza, Nelson

49. Miller, Ana M.

50. Montero, Lauterio

51. Najera, René L.

52. Paiva, Cleusa M.

53. Parker, Kenneth M.

54. Pease, Robert E.

55. Peredo, Bertha L.

56. Pezzimenti, Eduardo A.

57. Quezada, Rigoberto A.

58. Quiroga, Alberto E.

                                   58/59
59. Robinson, George

60. Rocha, Héctor

61. Rodríguez, Blanca G.

62. Rodríguez, Belgica

63. Rodríguez, Carlos

64. Sakamoto, Jorge

65. Seaton, Carol

66. Souza Gomes, María C. de

67. Suarez, Francisco M.

68. Talamas, Magdalena

69. Tapia, Teresa

70. Valenzuela, Victoria

71. Villanueva, María del Rosario

72. Villavicencio, Flavio

73. Wilson, Carmen M.

                                      APPENDIX C

             COMPLAINANTS WHO DID NOT FILE POWERS OF ATTORNEY

                              IN PROPER FORM AND DUE TIME



1. 1848 Castro, Juan J.

2. 3335 Francois, Martha A.

3. 4005 Gualteros, Gabriel

4. 9392 Valle, Víctor




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