UNITED NATIONS SYSTEM SHOULD FREEZE SALARIES, FIFTH COMMITTEE TOLD

Press Release
GA/AB/3050

UNITED NATIONS SYSTEM SHOULD FREEZE SALARIES, FIFTH COMMITTEE TOLD

The United Nations common system salaries should be frozen until the Organization was restructured and its personnel management improved, the Fifth Committee (Administrative and Budgetary) was told this morning as it continued discussing the common system of salaries and compensation.

At today's meeting, the Committee also recommended that the General Assembly take note of the chapters of the Economic and Social Council report that had been allocated to it for consideration.

The suggestion on the common system salaries was made by the representative of Canada, who also said that the International Civil Service Commission (ICSC) had made its recommendations on salary increases on a technical basis without considering reality. He asked how the Organization could grant a 10 per cent pay increase for its staff when it was said to be bankrupt. The Fifth Committee should apply the principles of sound financial management in considering the increases that would cost about $157.4 million annually.

The representative of Australia said he could not accept the proposed increase of 9.2 per cent in the common system remuneration. However, the more modest increase of 3.1 per cent in the net base/floor salary scale to reflect an increase given to the comparator civil service -- the United States -- could be supported. It was not necessary to offer the most attractive conditions of service in order to recruit and retain the best staff. Other factors such as prestige of the employer and international exposure should not be underestimated.

The recent suspension of permanent and probationary appointments should be rescinded since it frustrated staff members who had passed the national examinations and were awaiting permanent contracts, the representative of the Republic of Korea said. That decision could neither ameliorate the Organization's cash crunch on a short-term basis nor create a sound management culture.

Member States should provide additional funding to pay for salary increases, the representative of Cameroon said. Despite the current financial crisis, the issue of competitiveness should be addressed to help attract and keep the best talents.

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(The base floor salary scale is a universally applicable salary scale for staff in the Professional and higher categories and reflects the minimum net amounts received by United Nations staff members around the world.)

Speaking on the ICSC, Nepal said suspicions of politicization and dominance of some over others could be eliminated by limiting the terms of office of its members to two four-year terms.

The ICSC advises the Assembly on salary and compensation issues, including post adjustment and pension, for Professional and higher level staff as well as on General Service remuneration and conditions of service. Fourteen organizations, together with the United Nations, participate in the common system of salaries and allowances.

Statements were also made this morning by Bangladesh, Egypt and Ukraine.

The Committee is expected to meet again at 10 a.m. on Monday, 4 December, to continue discussing the common system and the reports of the Joint Inspection Unit (JIU).

Committee Work Programme

The Fifth Committee (Administrative and Budgetary) met this morning to continue discussing the United Nations common system and to take up the report of the Economic and Social Council.

On the common system of salaries allowances and conditions of service, the Committee had before it the 1995 report of the International Civil Service Commission (ICSC) (document A/50/30) and a statement by the Secretary-General on the administrative and financial implications of the Commission's decisions and recommendations (document A/C.5/50/24 and Corr.1). Also before the Committee were statements by the Administrative and Coordination Committee (ACC) (documents A/C.5/50/11 and 29) and comments by the Coordinating Committee for International Staff Unions and Associations of the United Nations System (CCISUA) (document A/C.5/50/5) and by the Federation of International Civil Servants Associations (FICSA) (document A/C.5/50/24).

The 15-member Commission advises the Assembly on salary and compensation issues, including post adjustment and pension, for Professional and higher level staff as well as on General Service remuneration and conditions of service. Fourteen organizations, together with the United Nations, participate in the common system of salaries and allowances.

On remuneration of staff at Professional and higher categories, the ICSC asks the General Assembly to reaffirm the continued applicability of the Noblemaire principle. It also recommends that the 115 desirable mid-point of the United Nations/United States net remuneration margin should be restored in 1996. To make the margin 15 per cent higher than the United States federal civil service remuneration, it recommends a hike in the base/floor salary scale, equivalent to 3.1 per cent, effective 1 March 1996, and an increase in post adjustment indices by 5.1 per cent, as of 1 July 1996. (For background, see Press Release GA/AB/3043, of 20 November.)

(The Noblemaire principle provides that salaries of staff at the Professional and higher categories in the United Nations system shall be set by reference to the highest paid national civil service. For that, the United States federal civil service has been used as the comparator. The margin is the average percentage difference between the pay of United Nations staff in New York and that of the United States federal service. Base floor salary scale is a universally applicable scale for staff at the Professional and higher categories and reflects the minimum net sums received by United Nations staff around the world. The post adjustment index measures living conditions of staff in a given location compared with costs in New York at a specific date. Post adjustment is a supplement to base pay and is calculated as a percentage of net base pay.)

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The Committee also had before it the report of the Economic and Social Council (document A/50/3 and Add.1) and would consider four chapters assigned to it by the Assembly. The various parts of the report are allocated to the Main Committees and the plenary according to their respective fields of competence, on the understanding that administrative, programme and budgetary aspects should be dealt with by the Fifth Committee.

Of those chapters, Chapter I -- matters calling for action by the Assembly or brought to its attention -- contains a summary of the resolutions and decisions, adopted by the Council in 1995, that call for action by the Assembly. The summarized texts are on matters related to operational activities of the United Nations for international development cooperation; social, humanitarian and human rights questions; economic and environmental questions; and regional cooperation in the economic, social and related fields.

Chapter IX -- coordination questions -- states that the Council had adopted resolutions on tobacco or health; malaria and diarrhoeal diseases, in particular cholera; and the need to harmonize and improve United Nations information systems for optimal utilization and accessibility by all States. The resolution on tobacco or health calls on Member States, bilateral and non- governmental organizations and organizations of the United Nations system to provide the necessary technical and financial resources to enable the United Nations system focal point to carry out its mandate in an effective manner.

The resolution on information systems requests the Council to convene a meeting from existing resources, to make appropriate recommendations, including giving favourable consideration to convening an ad hoc open-ended working group as soon as possible for the fulfilment of the provisions of previous resolutions on this question.

Statements on Common System

ROBERT R. FOWLER (Canada) expressed reservation regarding the method used by the ICSC in reaching its recommendations. More information should be provided to clarify the changes made to the method of comparing the common system with the United States system and on its effect on the margin. Canada did not agree with the Commission's decision to calculate the margin between common system and the United States federal service by using a method of equal weighting. The ICSC should reassess that decision.

He said the post adjustment system should only compensate for price differentials between duty stations. The United Nations system however, also used it as an across-the-board cost of living adjustment mechanism. Increases in the post adjustment index of New York, as the base city, should not be automatic but should require the General Assembly's approval. That increase

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was not justified at the moment. Many of the Secretariat posts were overclassified compared to their equivalents in the Canadian civil service, for instance. A position of a chief of section in the Secretariat in New York would normally be filled by an official earning not more than $46,600 gross base salary. Even when adjusted for differentials between New York and Ottawa, the equivalent would be only $60,300. But in the Secretariat, such a position would be filled at the level of Principal Officer (D-1), with a gross base salary of $117,000. The Committee could review the use of the Noblemaire and the Fleming principles as the current system was not transparent and produced anomalies.

General Service salaries should be based on local government salaries rather than those of the private sector, he said. The problems of effectiveness and efficiency must be addressed before any generalized adjustments to salary scales were considered. Until then, across-the-board increases would reward both the excellent and the mediocre staff.

There was no significant evidence to show that there was a problem for recruiting and retaining staff in the United Nations, he continued, and asked how many had been lost to higher-paying entities and how many vacancies had not been filled due to lack of qualified candidates. Increases should be considered for some specialized categories which were losing their competitiveness. A special occupational groups and pay scales could be designed for the International Atomic Energy Agency (IAEA).

He expressed support for proposals to make the proceedings of the ICSC more open and transparent. Canada could not lay off 45,000 -- a quarter of its civil services -- and continue a wage freeze and then support a 10 per cent salary increase for international civil services that earned significantly more for equivalent positions and who were subjected to less rigorous standards of performance. He also expressed support for a complete freeze on salaries until there was restructuring and improvement in personnel management. Many of the United Nations agencies had not provided for salary increases in their respective two-year budgets. Any increases should therefore be cost neutral and not hamper programme implementation. Funds should be used for programmes.

The ICSC had made its recommendations on a technical basis without regard to reality, he went on. How could the Organization grant a 10 per cent pay hike for its staff when the Secretary-General had declared the United Nations bankrupt. With the current situation, the Committee should apply the principles of sound financial management in considering the recommended pay hikes that would cost about $157.4 million annually.

SYED RAFIQUL ALOM (Bangladesh) said the creation of a conducive environment for human resources through the harmonization of personnel

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practices and conditions of service throughout the common system was crucial to productivity and efficiency. The Organization was not a corporation and might never be a model of efficiency, but it should not be as inefficient as perceived by some Member States. The ICSC had an important role to play. There should be greater transparency and wider participation in its consultative process. It should also be more responsive to changing demands.

Expressing support for the common system, he said that for it to be more productive, it had to be more competitive in order to attract resourceful and capable personnel to meet new challenges. The system had to be structured and updated. It must also ensure rigorous performance evaluation and enhanced cost effectiveness. It was important for both staff bodies -- FICSA and CCISUA -- to be part of the ICSC's consultative process. They should resume their participation in the ICSC. All parties must actually participate in the consultative process without precondition.

The Noblemaire principle continued to be the most rational basis for the determination of the conditions of service of the Secretariat personnel, he continued. It was unfortunate that the ICSC had not yet submitted the final outcome of its study on the application of the principle. It should submit those recommendations before the Assembly's next session. The recommendation to increase the base/floor remuneration of the Professional and staff of higher categories would remain an academic exercise unless the Organization had the resources to execute it. Therefore, it should not be considered in isolation of the overall administrative and financial reforms.

DAVID JULL (Australia) said a central priority of the common system was the maintenance of competitiveness. There was need for a framework for conditions of service that would to ensure the highest standards of staff efficiency, competence and integrity. He said he was not convinced that the United Nations system was not competitive. It was not generally known that there was a widespread recruitment and retention problem. Hence, the Secretariat and common system agencies should monitor recruitment and retention trends and present their findings to the Assembly.

The United Nations should achieve more with less, with an emphasis on enhanced productivity, he said. It would be premature to reward common system employees with a substantial salary increase when reforms relating to human resources management were yet to be attained. Australia would not agree with some technical aspects of the ICSC methodology on the margin of remuneration. He asked why all United Nations Professional staff should benefit without effort from an incentive scheme that only about 39 per cent of the United States Professional staff had received as reward for meritorious service.

Continuing, he said Australia could not accept the ICSC's recommendations for a weighted salary increase of approximately 9.2 per cent.

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A modest increase of 3.1 per cent in the net base/floor salary, in order to reflect the comparator's gross salary adjustment of 1 January 1995, was acceptable. At the same time, he was willing to examine remuneration for specialists. He cautioned against the fixation on the concept of the highest paid civil service and called for greater focus on a formulation which met the Charter requirements. It was not necessary to offer the most attractive conditions of service in order to recruit and retain the best staff. Other factors such as prestige of the employer and international exposure should not be underestimated.

SOONG CHULL SHIN (Republic of Korea) said he recognized the value of the Noblemaire principle and appreciated the ICSC's efforts to review the use of margin management. It had shown that staff of the Bretton Woods institutions and the Organisation for Economic Cooperation and Development (OECD) as well as the German and Swiss national civil services got better remuneration than the United States civil service, the current comparator. Appropriate measures should be taken to continuously ensure the most competitive and desirable salaries for the international staff in the United Nations system. At the same time, the issue of performance management and cost-effectiveness could not be overlooked.

He expressed regret at the fact that the ICSC could not present recommendations on the subject of post adjustment. The working group on the matter should recommend ways to improve the maintenance and the functioning of the post adjustment system so that the ICSC could submit its recommendations to the General Assembly. The ICSC, for its part, should retain its distinct technical character.

He drew attention to the Secretary-General's recent decision to suspend permanent and probationary appointments. The young staff members who had been recruited by the United Nations through national examinations and were awaiting permanent contracts after their probationary periods would be frustrated by that move. That decision should be withdrawn as soon as possible as it would neither ameliorate the cash crunch in the United Nations on a short-term basis nor create a sound management culture, he said.

KESHAV BADAL (Nepal) said that the ICSC should continue to adopt decisions on a technical basis; it was not meant to enter negotiations. Its members' tenure of office should be limited to two terms. Eight years were enough for them to contribute to the ICSC's work and to allow for rotation. That would eliminate any suspicions of politicization and the so-called dominance of some ICSC members.

He expressed support for the Noblemaire principle and was open to changing the comparator if the current one lagged far behind a potential new one and if the gap between United Nations staff total compensation and that of

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a comparator became noticeably wide. Nepal was not convinced that United Nations salaries were uncompetitive and that the Organization could not attract qualified candidates. The present pay scale was not the major impediment to the recruitment of the best candidates. Frequent changes in comparator would create an endless process that would endanger the system's stability. The idea of a basket of comparators did not enjoy general support either.

He noted that the comparator's gross remuneration had been raised by 3.22 per cent from this year. If a raise was warranted for United Nations staff, it should not exceed that percentage. Increases could be implemented if the funds to pay for them could be saved through reforms, efficiency gains and the abolition of redundancies. With the withholding of contributions, any raise in remuneration would be limited to futile paperwork if practical measures were not taken to ensure sufficient funds and a reliable financial base.

MOHAMED FATTAH (Egypt) said he supported the proposal for a salary increase for Professional and higher categories of staff, despite the general trend towards reducing expenditures as a result of the financial crisis. The additional financial implications to Member States for the 1996-1997 biennium of $38.8 million was a reasonable cost to bear for ensuring that staff continued to meet the highest standards in accordance with the Charter. He was therefore ready to adopt the relevant ICSC recommendations to increase the remuneration levels with immediate effect in order to bring the current remuneration margin to the mid-point range (10 to 15 per cent above the remuneration levels of the comparator civil service -- the United States) and to restructure the salary scale in order to correct imbalances in it.

The proposed restructuring of the ICSC could alter the very nature of that body, he said. Such a restructuring would detract from the fundamental independence and impartiality of the ICSC and make it a negotiating body representing interest groups. The Commission could function best when it was composed of elected representatives drawn from the Organization's entire membership and acting in their individual capacities, as is the case at present. Ways should be found to accommodate the views expressed by staff representatives without affecting the ICSC's delicate statute.

NJI EDWARD KILO (Cameroon) said that the ICSC should streamline its complex bureaucracy and improve its effectiveness. The Noblemaire principle should continue to be used as the basis for the salaries of Professional staff. The United Nations salary structure should be pegged against that of the best paid national civil service to make the common system competitive. The United States service could still be used as comparator as it was one of the best paid in the world, but other civil services could continue to be looked at.

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The situation in the Secretariat regarding competitiveness should be addressed as requested by the Secretary-General, he said. That would help retain the competitiveness of the United Nations system and attract and keep the best talents, despite its current financial crisis. Member States should provide additional funding for salary increases to ensure that United Nations staff could meet the highest standards of efficiency and competence.

VLADYSLAV DROZDOV (Ukraine) said he did not fully agree with the recommendations in the ICSC's annual report. He was concerned about the Commission's approach to the issue of restoring competitive conditions of service in the common system organizations. He supported the view that the Noblemaire principle was meant to establish competitive conditions of service for the staff of international organizations in order to attract talents from all over the world. However, the principle was not intended to pursue the highest salaries internationally. Its application should be pragmatic and remain in conformity with the reality of the common system. He was not in agreement with groundless interpretation, innovations or applications which distorted the essence and impact of the principle. At this stage, the United States federal civil service should continue to be used as the comparator. The idea of using any other country or number of countries in that capacity seemed groundless.

He questioned the ICSC's method of arriving at its recommendations for a salary increase for Professional and higher categories of staff. He was also concerned that the increase had been recommended against the backdrop of the Organization's deepening financial crisis. Therefore, he could not endorse the proposals which would result in an increase in expenditure. That position should not be considered a mistrust of the ICSC. Ukraine supported its fundamental role as an independent body in the common system. He added that it should be protected from outside pressure.

Action on Economic and Social Council Report

The Committee decided to recommend to the General Assembly to take note of the Economic and Social Council chapters allocated to the Fifth Committee.

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