UNGA/C-5: ICSC REPORTS ON COMMON SYSTEM: PROPOSAL

UNCLAS USUN NEW YORK 001000

SIPDIS

E.O. 12958: N/A
TAGS: AORC KUNR PREL UNGA
SUBJECT: UNGA/C-5: ICSC REPORTS ON COMMON SYSTEM: PROPOSAL
FOR FIX-TERM EMPLOYEE SEVERANCE PACKAGE DRAWS G77/CHINA
SUPPORT AND HESITATION FROM THE REST


1. (U) SUMMARY: On 20 October, the Fifth Committee convened
for a formal meeting to consider the report of the
International Civil Service Commission (ICSC) pertaining to
the U.N. Common System (Agenda item 139). The key issue
pertained to the ICSC,s recommendation to introduce
end-of-service severance pay for staff serving on fixed-term
contracts. The idea received support from the G77, and China,
while Japan and the U.S. raised strong objections. Other
delegations, such as CANZ and Mexico, approached the
recommendation with concern, while Russia spoke in favor of
the payment in principle, but agreed that the matter deserves
patient consideration. END SUMMARY.

BACKGROUND ON THE COMMON SYSTEM
--------------


2. (U) The UN Common System refers to the common system of
salaries and benefits used by the United Nations and most of
its affiliated organizations to avoid discrepancies in
compensation as well as to prevent competition in
recruitment. The fifteen-member International Civil Service
Commission (ICSC) is responsible for regulating and
coordinating the conditions of service for staff throughout
the Common System.

DELEGATIONS STAKE POSITIONS IN FORMAL DEBATE
--------------


3. (U) COMMISSION SUGGESTS SEVERANCE PAY AFTER 10 YEARS: On
23 October, the Vice-Chairman of the ICSC presented the
report of the ICSC, which called for, inter alia, the
introduction of an end-of-service severance pay entitlement
for fixed-term staff who have served for at least ten years
whose contracts are not renewed. The Vice-Chairman commented
"Most commission members shared the view that some
compensation should be offered to long-serving staff
separating from organizations involuntarily upon expiration
of their fixed-term contracts" The Commission estimated the
cost of the program at USD 4.6 million per annum, a sum said
to be less than a buy-out option.


4. (U) STAFF ASSOCIATIONS VOICE STRONG SUPPORT FOR
END-OF-SERVICE SEVERANCE PAYMENTS: The President of the
Federation of International Civil Servants, Associations
(FICSA),expressed strong support for the severance pay plan,
but also contended that the entitlement should be awarded
after only five years of service, as did the President of the
Coordinating Committee for International Staff Unions and
Associations (CCISUA). CCISUA considers the matter of
particular import to the United Nations, given that it
employs approximately 80% of its staff on a contract basis.
In contrast to the representatives of the other staff
associations, the representative of the United Nations Civil
Servants Federation (UNISERV) voiced strong opposition to the
proposed end-of-service grant as proposed by the ICSC,
stating that the compensation schedule for termination
indemnities should be used instead.


5. (U) GCC/CHINA SUPPORT ENTITLEMENT: Sudan, speaking on
behalf of the G77 and China registered support for the
severance plan, stressing a need to "offer the conditions of
service which are more suitable to the United Nations
employees and more attractive to those whom wish to work for
the United Nations." Sudan referred to the severance plan as
being part and parcel of a "well-deserved and respectable
remuneration package" and promised to "fully support the
ICSC,s recommendation."


6. (U) JAPAN AND U.S. VOICE OPPOSITION WHILE EU, CANZ,
MEXICO, AND RUSSIA ALL EXPRESS NEED TO MOVE CAUTIOUSLY: Both
Japan and the U.S. spoke against introducing end-of-service
severance pay, arguing that the proposal violated GA
Resolution 63/250 and that the UN had no legal obligation to
provide for staff members after the completion of a contract.
Sweden, speaking on behalf of the E.U. and associated
countries showed reluctance to endorse the new entitlement,
commenting that "as for the recommended end-of-service
severance pay for fixed-term staff, we will carefully examine
this proposal and its administrative and financial
implications in the light of the ongoing implementation of
the contractual reform and the overall economic situation,
bearing in mind that it is an entirely new concept." New
Zealand, speaking on behalf of CANZ, urged caution in
considering any new entitlements with long-term financial
implications. Mexico said that it would need to examine the
proposal "in the context of this economic crisis", but also
suggested that the evidence for the proposal is not
sufficiently convincing. Outside of the G77 and China, Russia
came closest to endorsing the initiative, noting that the
introduction of this entitlement should only be considered



after "serious consideration" and its "introduction should be
delayed."

FOLLOW-UP DELIBERATIONS IN INFORMAL CONSULTATIONS
-------------- --------------


7. (U) During subsequent informal meetings of the Fifth
Committee on the Common System, the U.S., the EU, CANZ, and
Japan have maintained a common position in opposition to the
introduction of end-of-service severance pay for fixed-term
staff, which continues to be supported by the G77 and China.
In addition to arguing against the proposed entitlement on
its merits, Western delegations have pointed out the
difficulty of discussing severance pay for fixed-term staff
without first discussing how a new continuing contract
mechanism is implemented in the UN Secretariat. This issue is
scheduled to be debated in November under agenda item 137,
Human Resources Management.


7. (U) COMMENT: The sum provided by the ICSC for the
severance pay plan is based on the current fixed term staff
remaining in the organization for ten years or more. These
estimates do not take into consideration the conversion of
fixed-term staff members in the UN Secretariat to continuing
contracts. Implementation of the new continuing contract
mechanism will reduce the number of staff eligible for
end-of-service severance pay, and therefore reduce the annual
cost of the entitlement. These savings, however, are likely
to be offset by an increase in the number of termination
indemnities -- which are more generous than end-of-service
grants -- awarded to staff. END COMMENT
Rice