## j2004-1 - Introduction

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### Case overview
- Event: Administrative Tribunal of the International Monetary Fund met on December 9 and 10, 2004 to adjudge the case brought against the International Monetary Fund by Mr. “R”, a retired staff member.
- Applicant: former Director of the Joint Africa Institute (JAI) in Abidjan, Côte d’Ivoire.
- Subject of dispute: denial by the Department of Human Resources of reimbursement for security expenses allegedly incurred indirectly when Applicant elected to live in a hotel rather than a private residence at his overseas post.
- Applicant’s claim: the Fund’s housing allowance for overseas Office staff fails to account for differences in security costs between Washington, D.C. and the duty station except when the Fund pays directly for security enhancements or protection to the overseas residence; Applicant seeks reimbursement equal to the amount he estimates he would have incurred directly for guard services had he lived in a private residence.

### Procedural history
- Application filed with the Administrative Tribunal on September 26, 2003; Registrar advised deficiencies under Rule VII, para. 3 and gave fifteen days to correct; corrected within the period and application considered filed on the original date.
- Application transmitted to Respondent on October 16, 2003.
- Summary of the Application issued within the Fund on October 22, 2003 pursuant to Rule XIV, para. 4.
- Respondent filed its Answer on December 1, 2003; Applicant submitted his Reply on December 24, 2003; Fund’s Rejoinder filed on February 4, 2004.
- On August 4, 2004, Applicant filed two additional documents at the Registrar’s request to complete the record.
- Tribunal decided oral proceedings would not be held.
- Respondent contended Article XIII of the Tribunal’s Statute (finality of judgments) bars relitigation of claims decided in Mr. “R” and that the denial by Human Resources was not an abuse of discretion.

### Factual background
- Applicant had been a Fund staff member since 1981 and served as Senior Resident Representative in Dakar, Senegal before appointment in July 1999 as the first Director of the JAI in Abidjan.
- JAI is considered one of the Fund’s seven overseas Offices; a Fund Resident Representative was also posted at Abidjan and enjoyed more generous benefits.
- Differences in benefits cited:
  - Hardship allowance: at the time available only to Resident Representatives; later extended to staff in overseas Offices (provisionally granted and then made permanent and retroactive for Applicant).
  - Overseas assignment allowance: remains limited to Resident Representatives.
  - Housing: Resident Representatives receive furnished housing in the city of assignment; overseas Office Directors receive an allowance to cover the difference in housing costs between the duty station and Washington, D.C., and for shipment of household items.
- HRD Director in August 1999 recommended, on an exceptional basis, a housing allowance equal to the full estimated cost of residing at the Hotel Ivoire and cited estimated savings to the Fund including security costs:
  - “Based on the estimated cost of providing security for the Resident Representative, this cost saving is estimated at $1,500 monthly, or $54,000 over the period of the assignment.” (HRD Director)
- Applicant began duties as JAI Director on September 20, 1999.
- Deputy Managing Director’s decision communicated by email of October 2, 2000:
  - Made permanent and retroactive the provisional grant of a hardship allowance to Applicant.
  - Denied Applicant’s requests for (a) an overseas assignment allowance and (b) an increased housing allowance.
  - Advised: “There will be no change in the manner in which your housing allowance is computed and paid and, since you are living in a hotel, no security costs need to be covered.” (Chief of the Staff Benefits Division)

### Security assessments and internal positions
- May 3, 2002 HRD Director response to Applicant:
  - Stated utility costs are included in the housing calculation.
  - Stated Fund policy: housing allowance does not cover security costs, but “the Fund stands ready to cover the necessary costs of providing security in all locations where staff are placed around the world. In the event that the Fund’s security office considers security measures necessary for you or other Fund staff at the JAI, the Fund will pick up the cost.”
- June 17, 2002 Acting Chief of the Field Security Office (FSO) memorandum to the Chief of the Staff Benefits Division:
  - Noted Applicant’s decision to live in a hotel was “a very practical and security-conscious decision,” and major international hotels “have comprehensive security programs” whose costs are “passed on to guests as an invisible part of the room rates.”
  - Estimated typical costs for private expatriate residence security measures:
    - One time expense for enhancements to the property: approximately $10,000.
    - Annual guard service fee: up to approximately $18,000.
  - Observed that “The exceptional security measures raise the cost of living, whether at a private residence or at a hotel.”
  - Stated that if Applicant had lived in a single-family house, many of these expenses “would have had to have been incurred,” and that the FSO “would have had to cover the majority of these expenses.”
- July 2002 email exchange: HRD maintained its position that the Fund will pay for security costs incurred but will not pay Applicant for costs avoided due to his decision to live at the hotel.

### Administrative review and grievance
- November 10, 2002: Applicant sought administrative review by the Director of HRD, estimating security costs over his three-year appointment at $54,000 (i.e., three times the annual guard service rate estimated by the FSO Acting Chief).
- November 27, 2002 HRD Director memorandum sustained the Staff Benefits Chief’s decision, stating:
  - No recommendation by the FSO Acting Chief for additional security measures; therefore no further action required.
  - If Applicant had chosen housing that required guards or additional security equipment, the Fund would have paid for this; Applicant chose to live in a hotel where additional security measures were not needed.
  - “The relevant policies simply do not provide for the Fund to pay to you a notional amount that it might have had to pay to other parties if you had opted to live in a house.” (Emphasis in original.)
- January 22, 2003: Applicant submitted his Grievance.
- August 29, 2003 Grievance Committee Recommendation and Report: concluded it did not have jurisdiction because Applicant’s complaint represented a challenge to Fund policy rather than to the application of policy in an individual case.

### Parties’ principal contentions
- Applicant’s contentions:
  - The data used to calculate the housing allowance for overseas Office staff exclude security costs, causing the housing allowance to underestimate actual housing costs in duty stations where security is significant.
  - The Fund offsets inadequate housing allowance for those living in private residences by paying directly for security costs; but for staff leasing quarters already outfitted with security enhancements (e.g., hotels), rental expenses include security costs and the housing allowance is therefore insufficient.
  - The prior Tribunal decision in Mr. “R” does not bar a claim for recalculation of the housing allowance because the earlier claim sought parity with Resident Representative benefits, which differ in kind; the current claim challenges the determination of housing allowance excluding security costs.
  - Seeks compensation for exclusion of security costs from housing allowance during his three-year term as JAI Director; because precise assessment is not possible, seeks estimated compensation equal to guard services had he lived in a private residence:
    - $1,500 per month × 36 months = $54,000.
- Respondent’s principal contentions (summary begins in source but detailed list initially not included in excerpt).

### Respondent’s principal arguments (enumerated)
- 1) The Application is barred by the doctrine of res judicata because the Tribunal reviewed Applicant’s claim for an increased housing allowance in Mr. “R”.
- 2) Applicant’s current claim was encompassed within his first unsuccessful Application or could have been raised in the first case.
- 3) The Tribunal in Mr. “R” reviewed and upheld both the Fund’s benefits classification scheme for overseas staff and management’s decision to reject an exception to that scheme in Applicant’s case.
- 4) The memorandum from the FSO Acting Chief does not create previously unknown facts so as to constitute different claims.
- 5) Even if not barred by res judicata, the present Application should be denied because Applicant’s housing allowance was properly calculated in accordance with Fund policy.
- 6) Applicant’s only challenge is to a regulatory decision; the Fund’s housing allowance and security policies are reasonably related to their objectives and do not represent an abuse of discretion.
- 7) With regard to the Fund’s approach to security costs, there is no difference between Resident Representatives and Office Directors: the Fund will take, at its expense, all security measures it considers necessary, but it will not pay any staff member for the value of security measures avoided because of his choice of accommodations.

### Tribunal analysis — finality of judgments and res judicata
- Article XIII, Section 2: “Judgments shall be final, subject to Article XVI and Article XVII, and without appeal.”
- Tribunal considered precedent describing the “classic three identities—of person, cause and object” required for res judicata to bar a claim.
- Tribunal evaluated what claims were raised in the earlier suit, the purpose of that litigation, the legal arguments made and considered, and what was decided and on what basis.
- Tribunal concluded the purpose of the current claim is not the same as that earlier litigated: the first case challenged non‑parity with Resident Representative perquisites; the present case contests whether security costs incurred indirectly via hotel bills should be treated differently than directly paid security costs.

### Jurisdictional and transparency issues regarding regulatory decision
- Statute (Article II, Section 2.b.) defines a “regulatory decision” as rules concerning terms and conditions of staff employment, excluding Board of Governors resolutions.
- Precedent requires a regulatory decision to be taken by an authorized organ, laid down in a published official document with a determinable effective date and reasonable notice to staff.
- The Fund’s policy on residential security costs appears in correspondence with Mr. “R” and in a benefits review (“Resident Representative Program: Review of Benefits and Incentives,” February 18, 2000) noting that “Security upgrades should continue to be financed separately by the Fund wherever warranted.”
- There is no evidence that the policy was communicated to Fund staff at large; the Fund may wish to consider announcing and circulating a clear and comprehensive statement of its policy on meeting necessary security costs for personnel posted abroad.
- Even if the Tribunal lacks jurisdiction to treat the policy as a “regulatory decision,” it is competent to consider the fairness of the policy’s application to Applicant as an “individual decision.”

### Tribunal findings on fairness and equal treatment
- Applicant’s implicit claim: the policy is inherently inequitable and may violate the principle of equal pay for equal work; a policy neutral on its face may result in consequential differentiation between groups.
- Fund’s rationale: housing allowance and security policies are reasonably related to objectives; the Fund prefers to pay security costs directly rather than provide an allowance for security costs implicit in housing expenses, due to business reasons and concern over potential misuse.
- Tribunal’s conclusion:
  - Applicant made a reasonable decision to live in the Hotel Ivoire given the security situation in Abidjan; that decision entailed indirect payment of security costs subsumed in hotel bills.
  - The Fund “avoided” those costs but Mr. “R” did not avoid them; there is no cogent consideration why the Fund should be absolved of those costs simply because they were indirectly rather than directly incurred.
  - Equal treatment concerning the fundamental right to physical security should govern in the singular factual circumstances of Mr. “R”’s case.

### Remedies, calculations, and orders
- Article XIV, Section 1: if the Tribunal finds an individual decision unlawful, it “shall prescribe the rescission of such decision and all other measures, whether involving the payment of money or otherwise, required to correct the effects of that decision.”
- Tribunal rescinded the Fund’s decision to deny payment of security costs indirectly incurred by Mr. “R”.
- Applicant acknowledged that direct assessment of security costs passed on to hotel guests in the rental fee is not possible; as a proxy he requested guard services amounting to $1,500 per month multiplied by 36 months, equaling $54,000.
- Source of figures:
  - $1,500 per month figure originates from August 1999 HRD correspondence noting cost savings to the Fund as $1,500 monthly, or $54,000 over the period of the assignment.
  - Acting Chief of the Field Security Office estimated:
    - one time expense of approximately $10,000 for enhancements to property; and
    - an annual guard service fee of approximately $18,000 ($1,500 per month).
- Tribunal concluded that $54,000 is the most reasonable approximation the record affords of security costs incurred by Mr. “R” and prescribed the Fund’s payment of that sum to Applicant.
- Administrative Tribunal unanimous decisions:
  1. Mr. “R”’s current claim is not debarred by reason of res judicata.
  2. The decision of the Fund to deny payment of security costs indirectly incurred by Mr. “R” is rescinded.
  3. The Fund shall pay the sum of $54,000 to Mr. “R” as the most reasonable approximation that the record affords of security costs incurred by him in the course of his assignment in Abidjan.

- Signatories and formalities:
  - Stephen M. Schwebel, President
  - Nisuke Ando, Associate Judge
  - Michel Gentot, Associate Judge
  - Celia Goldman, Registrar
  - Washington, D.C., December 10, 2004

*The Administrative Tribunal of the International Monetary Fund, Decision dated December 10, 2004.*

### Introduction

### j2004-1 - Introduction

### Case overview
- On December 9 and 10, 2004, the Administrative Tribunal of the International Monetary Fund, composed of Judge Stephen M. Schwebel, President, and Judges Nisuke Ando and Michel Gentot, Associate Judges, met to adjudge the case brought against the International Monetary Fund by Mr. “R”, now a retired staff member of the Fund.
- Applicant: former Director of the Joint Africa Institute (JAI) in Abidjan, Côte d’Ivoire.
- Subject of dispute: denial by the Department of Human Resources of reimbursement for security expenses allegedly incurred indirectly when Applicant elected to live in a hotel rather than a private residence at his overseas post.
- Applicant’s claim: the Fund’s housing allowance for overseas Office staff fails to account for differences in security costs between Washington, D.C. and the duty station except when the Fund pays directly for security enhancements or protection to the overseas residence; Applicant seeks reimbursement equal to the amount he estimates he would have incurred directly for guard services had he lived in a private residence.

### Procedural history
- Application filed with the Administrative Tribunal on September 26, 2003; Registrar advised deficiencies under Rule VII, para. 3 and gave fifteen days to correct; corrected within the period and application considered filed on the original date.
- Application transmitted to Respondent on October 16, 2003.
- Summary of the Application issued within the Fund on October 22, 2003 pursuant to Rule XIV, para. 4.
- Respondent filed its Answer on December 1, 2003; Applicant submitted his Reply on December 24, 2003; Fund’s Rejoinder filed on February 4, 2004.
- On August 4, 2004, Applicant filed two additional documents at the Registrar’s request to complete the record.
- Tribunal decided oral proceedings would not be held as they were not necessary.
- Respondent contends Article XIII of the Tribunal’s Statute (finality of judgments) bars relitigation of claims decided in Mr. “R” and that the denial by Human Resources was not an abuse of discretion.

### Factual background
- Applicant had been a Fund staff member since 1981 and served as Senior Resident Representative in Dakar, Senegal before appointment in July 1999 as the first Director of the JAI in Abidjan.
- For Fund benefits purposes, JAI is considered one of the Fund’s seven overseas Offices; a Fund Resident Representative was also posted at Abidjan and enjoyed more generous benefits.
- Differences in benefits cited:
  - Hardship allowance: at the time available only to Resident Representatives; later extended to staff in overseas Offices (provisionally granted and then made permanent and retroactive for Applicant).
  - Overseas assignment allowance: remains limited to Resident Representatives.
  - Housing: Resident Representatives receive furnished housing in the city of assignment; overseas Office Directors receive an allowance to cover the difference in housing costs between the duty station and Washington, D.C., and for shipment of household items.
- HRD Director in August 1999 recommended, on an exceptional basis, a housing allowance equal to the full estimated cost of residing at the Hotel Ivoire and cited estimated savings to the Fund including security costs:
  - “Based on the estimated cost of providing security for the Resident Representative, this cost saving is estimated at $1,500 monthly, or $54,000 over the period of the assignment.” (HRD Director)
- Applicant began duties as JAI Director on September 20, 1999.
- Deputy Managing Director’s decision communicated by email of October 2, 2000:
  - Made permanent and retroactive the provisional grant of a hardship allowance to Applicant.
  - Denied Applicant’s requests for (a) an overseas assignment allowance and (b) an increased housing allowance.
  - Advised: “There will be no change in the manner in which your housing allowance is computed and paid and, since you are living in a hotel, no security costs need to be covered.” (Chief of the Staff Benefits Division)

### Security assessments and internal positions
- May 3, 2002 HRD Director response to Applicant:
  - Stated utility costs are included in the housing calculation.
  - Stated Fund policy: housing allowance does not cover security costs, but “the Fund stands ready to cover the necessary costs of providing security in all locations where staff are placed around the world. In the event that the Fund’s security office considers security measures necessary for you or other Fund staff at the JAI, the Fund will pick up the cost.”
- June 17, 2002 Acting Chief of the Field Security Office (FSO) memorandum to the Chief of the Staff Benefits Division:
  - Noted Applicant’s decision to live in a hotel was “a very practical and security-conscious decision,” and major international hotels “have comprehensive security programs” whose costs are “passed on to guests as an invisible part of the room rates.”
  - Estimated typical costs for private expatriate residence security measures:
    - One time expense for enhancements to the property: approximately $10,000.
    - Annual guard service fee: up to approximately $18,000.
  - Observed that “The exceptional security measures raise the cost of living, whether at a private residence or at a hotel.”
  - Stated that if Applicant had lived in a single-family house, many of these expenses “would have had to have been incurred,” and that the FSO “would have had to cover the majority of these expenses.”
- July 2002 email exchange: HRD maintained its position that the Fund will pay for security costs incurred but will not pay Applicant for costs avoided due to his decision to live at the hotel.

### Administrative review and grievance
- November 10, 2002: Applicant sought administrative review by the Director of HRD, estimating security costs over his three-year appointment at $54,000 (i.e., three times the annual guard service rate estimated by the FSO Acting Chief).
- November 27, 2002 HRD Director memorandum sustained the Staff Benefits Chief’s decision, stating:
  - No recommendation by the FSO Acting Chief for additional security measures; therefore no further action required.
  - If Applicant had chosen housing that required guards or additional security equipment, the Fund would have paid for this; Applicant chose to live in a hotel where additional security measures were not needed.
  - “The relevant policies simply do not provide for the Fund to pay to you a notional amount that it might have had to pay to other parties if you had opted to live in a house.” (Emphasis in original.)
- January 22, 2003: Applicant submitted his Grievance.
- August 29, 2003 Grievance Committee Recommendation and Report: concluded it did not have jurisdiction because Applicant’s complaint represented a challenge to Fund policy rather than to the application of policy in an individual case.

### Parties’ principal contentions
- Applicant’s contentions:
  - The data used to calculate the housing allowance for overseas Office staff exclude security costs, causing the housing allowance to underestimate actual housing costs in duty stations where security is significant.
  - The Fund offsets inadequate housing allowance for those living in private residences by paying directly for security costs; but for staff leasing quarters already outfitted with security enhancements (e.g., hotels), rental expenses include security costs and the housing allowance is therefore insufficient.
  - The prior Tribunal decision in Mr. “R” does not bar a claim for recalculation of the housing allowance because the earlier claim sought parity with Resident Representative benefits, which differ in kind; the current claim challenges the determination of housing allowance excluding security costs.
  - Seeks compensation for exclusion of security costs from housing allowance during his three-year term as JAI Director; because precise assessment is not possible, seeks estimated compensation equal to guard services had he lived in a private residence: $1,500 per month × 36 months = $54,000.
- Respondent’s principal contentions:
  - (Summary begins in the source but the detailed list of Respondent’s principal contentions is not included in the supplied excerpt.)

*Administrative Tribunal of the International Monetary Fund — Introduction (December 9 and 10, 2004).*

### 23.      The principal arguments presented by Respondent in its Answer and Rejoinder are

### 23.      The principal arguments presented by Respondent in its Answer and Rejoinder are

### Respondent’s principal arguments (enumerated)
- 1) Mr. “R”’s Application is barred by the doctrine of res judicata because the Tribunal reviewed Applicant’s claim for an increased housing allowance in Mr.“R”. The present Application has the same purpose as the former one, in which Applicant sought a retroactive increase in the housing allowance to cover his actual housing costs in Abidjan, including rent, furniture and security guards, and for the future to allow him to live with the same comfort and security as the Resident Representative.
- 2) Applicant’s current claim was encompassed within his first unsuccessful Application or, at a minimum, his current claim could have been raised in the first case. The foundation of the claim in law, i.e. that the Fund allegedly abused its discretion concerning the benefits payable to the JAI Director, is substantially identical to what Mr. “R” previously argued before the Tribunal.
- 3) The Tribunal in Mr. “R” reviewed and upheld both the Fund’s benefits classification scheme for overseas staff, as well as management’s decision to reject an exception to that scheme in Applicant’s case. In particular, the Tribunal upheld Fund management’s rejection of a recommendation by the Director of HRD that Applicant be paid an exceptional housing allowance, a recommendation based in part upon the security costs avoided by Applicant’s selection of housing at the hotel.
- 4) The memorandum from the FSO Acting Chief does not create previously unknown facts so as to constitute different claims.
- 5) Even if the present Application is not barred by res judicata, it should be denied because Applicant’s housing allowance was properly calculated in accordance with Fund policy. Mr. “R” has received all of the benefits to which he was entitled under the housing policy for overseas Office Directors.
- 6) Applicant’s only challenge is to a regulatory decision. The Fund’s housing allowance and security polices are reasonably related to their objectives and do not represent an abuse of discretion. The Fund has sound business reasons for its policy of paying for all security costs directly, as opposed to paying an allowance for security costs said to be implicit in the housing expenses of an overseas Office Director.
- 7) With regard to the Fund’s approach to security costs, there is no difference as between Resident Representatives and Office Directors. In each case, the Fund will take, at its expense, all security measures it considers necessary, but it will not pay any staff member for the value of security measures avoided because of his choice of accommodations.

### Consideration of the issues — Finality of judgments and res judicata
- Paragraph 24: Respondent contends the present Application is barred under Article XIII of the Statute (finality of judgments) by the Tribunal’s Judgment in Mr. “R”, Applicant v. International Monetary Fund, Respondent, IMFAT Judgment No. 2002-1 (March 5, 2002).
- Paragraph 25: Article XIII, Section 2 provides: “Judgments shall be final, subject to Article XVI and Article XVII, and without appeal.” The statute codifies the doctrine of res judicata, promoting judicial economy and certainty.
- Paragraph 26: The IMFAT has twice affirmed finality of judgments in rejecting requests for interpretation, citing that a judgment is final and without appeal; however, this case is the first in which res judicata has been raised as a defense to an Application.
- Paragraphs 27–28: Precedent from ILOAT and WBAT is cited describing the “classic three identities—of person, cause and object” required for res judicata to bar a claim, and articulating that res judicata bars subsequent proceedings if the issue submitted has already been the subject of a final and binding decision, including issues necessarily determined in the earlier proceeding.

### Application of res judicata principles to Mr. “R”
- Paragraph 29: The Tribunal must consider what claims were raised in the earlier suit, the purpose of that litigation, the legal arguments made and considered, and what was decided and on what basis.
- Paragraph 30: The parties in the current dispute are identical to those in Mr. “R”.
- Paragraphs 31–34: Respondent asserts the current suit has the same purpose as the original case (seeking an increased housing allowance to cover actual housing costs in Abidjan and parity with the Resident Representative). Applicant counters that the first litigation sought the same perquisites as the Resident Representative (who receives full housing expense coverage directly) and that the present claim (challenging exclusion of security costs in calculating the housing allowance) arises because the first Application was denied. Applicant now seeks:
  - a) an interpretation of the housing allowance for overseas Office Directors that would take into account security costs in assessing the difference between housing costs in Washington, D.C. and the duty station by recompensing him for the cost of security allegedly included in his rental rate, and/or
  - b) an interpretation of the Fund’s security “policy” that would reimburse security costs incurred indirectly.
- Paragraph 34 (Tribunal view): The Tribunal concludes the purpose of the current claim is not the same as that earlier litigated. The first case challenged non‑parity with the Resident Representative’s perquisites; the present case contests the Fund’s policy distinction between security costs directly incurred (met by the Fund) and security costs indirectly incurred (not reimbursed).

### Whether the cause of action is the same in law
- Paragraphs 35–38: Respondent contends the foundation in law is the same—alleged abuse of discretion concerning benefits payable to the JAI Director—and that the Tribunal in Mr. “R” upheld the benefits classification scheme and management’s rejection of an exception. In the first Application, Applicant challenged management’s October 2, 2000 decision as discriminatory; the Tribunal analyzed it as a discrimination claim and focused on whether the Fund abused its discretion by maintaining differing benefits packages for different staff categories.
- Paragraphs 39–40: The Tribunal in Mr. “R” reviewed the Fund’s justifications and found some persuasive and others less so; it acknowledged that security concerns in Côte d’Ivoire affected all staff in that location but did not conclude that shared security risks invalidated the distinction in benefits between Office Directors and Resident Representatives. The Tribunal’s decision rested on the permissibility of differences in the total package of benefits and on rational connections to policy objectives (notably the incentive to recruit Resident Representatives provided by the overseas assignment allowance). The Tribunal observed that the policy “is dependent on generalizations... about the living conditions” in various locations.
- Paragraphs 41–42: It may be argued res judicata is supported by the Tribunal’s ratification of management’s individual decision to reject the HRD Director’s recommendation for exceptional housing benefits (the recommendation had been based in part on Fund savings from security measures avoided by Applicant’s hotel residence). The Tribunal found management’s decision “...reasonable and one within the ambit of the Fund’s managerial discretion.” Nevertheless, the present claim identifies a different alleged inequity: overseas Office staff who choose security‑enhanced rented quarters may be disadvantaged relative to those who reside in facilities requiring security upgrades, and Respondent maintains that the Fund will meet, at its expense, security measures it deems necessary but will not pay staff for the value of security measures avoided by their choice of accommodation.

*Source: IMF Administrative Tribunal judgment text (paras. 23–42).*

### 43.      While it may be also contended that Applicant’s eliciting a further decision from the

### j2004-1 - 43–Decision on Security Costs for Mr. “R”

### Res judicata and procedural history
- The Director of HRD, in April 2002, when presented with Applicant’s request for a “Revised Calculation of the Housing Allowance for JAI Office Staff,” did not refer Mr. “R” to the Tribunal’s recent Judgment nor to the October 2, 2000 decision that had included the statement “...because you are living in a hotel, no security costs need to be covered.”
- Instead, the Director replied that the Fund “...stands ready to cover the necessary costs of providing security in all locations where staff are placed around the world,” and suggested that “[i]t would be appropriate for you to raise any security concerns with [the Acting Chief of the Fund’s Field Security Office].”
- The Fund’s response in April 2002 treated Mr. “R”’s request as distinct from the matter disposed of by the Administrative Tribunal one month earlier; these actions may have led Mr. “R” to pursue administrative review culminating in Tribunal consideration.
- The Tribunal concludes that Mr. “R”’s current claim is not debarred on the ground of res judicata because the essential question now challenged—whether security costs incurred indirectly via hotel bills should be met differently than directly paid security costs—was not addressed in the Tribunal’s earlier Judgment.

### Individual decision under review: core issues
- Central complaint: Mr. “R” contends his housing allowance was improperly calculated because it did not reflect the difference in housing cost between Washington, D.C. and the duty station.
- Applicant’s contention: The Fund applied a policy that denies reimbursement for security expenses said to be incurred indirectly through the choice of renting security-enhanced accommodation.
- Applicant relies on the HRD Director’s statement that the Fund “...stands ready to cover the necessary costs of providing security in all locations where staff are placed around the world. In the event that the Fund’s security office considers security measures necessary for you or other Fund staff of the JAI, the Fund will pick up the cost.”
- Applicant argues that the Acting Chief of the Field Security Office did consider residential security measures necessary for expatriates in Abidjan, and therefore the Fund should “pick up the cost” of that part of his hotel rent attributable to security services.
- The Staff Benefits Chief’s July 2002 decision stated that “...these costs were not incurred....The Fund will pay for security costs incurred, but will not pay you for costs that were avoided due to your decision [to live at the hotel].”
- The Tribunal concurs that those costs were “incurred,” albeit indirectly; HRD later concluded that the Staff Benefits Chief “...correctly interpreted and applied the Fund’s policies to your situation.”

### Regulatory decision: jurisdictional and transparency issues
- Respondent asserts Applicant’s “only challenge” is to a “regulatory decision”—a policy providing residential security measures to staff posted overseas but denying reimbursement for expenses “avoided” by a staff member’s choice of accommodations.
- The Statute (Article II, Section 2.b.) defines a “regulatory decision” as “...any rule concerning the terms and conditions of staff employment, including the General Administrative Orders and the Staff Retirement Plan, but excluding any resolutions adopted by the Board of Governors of the Fund.”
- Precedent (Mr. M. D’Aoust, IMFAT Judgment No. 1996-1) requires a regulatory decision to be a decision taken by an authorized organ, laid down in a published official document with a determinable effective date and reasonable notice to staff; an unpublished or undocumented practice is not a regulatory decision.
- The Fund’s policy on residential security costs appears in correspondence with Mr. “R” and in a benefits review (“Resident Representative Program: Review of Benefits and Incentives,” February 18, 2000) noting that “Security upgrades should continue to be financed separately by the Fund wherever warranted.”
- There is no evidence that the policy was communicated to Fund staff at large; the Fund may wish to consider announcing and circulating a clear and comprehensive statement of its policy on meeting necessary security costs for personnel posted abroad.
- Even if the Tribunal lacks jurisdiction to treat the policy as a “regulatory decision,” it is competent to consider the fairness of the policy’s application to Applicant as an “individual decision.”

### Tribunal findings on fairness and equal treatment
- Applicant’s implicit claim: the policy is inherently inequitable and may violate the principle of equal pay for equal work; a policy neutral on its face may result in consequential differentiation between groups.
- The Fund’s rationale: housing allowance and security policies are reasonably related to objectives; the Fund prefers to pay security costs directly rather than provide an allowance for security costs implicit in housing expenses, due to business reasons and concern over potential misuse.
- The Tribunal finds the Fund’s motivation insufficient in the circumstances of Mr. “R.” He made a reasonable decision to live in the Hotel Ivoire given the security situation in Abidjan; that decision entailed indirect payment of security costs subsumed in hotel bills.
- The Fund “avoided” those costs but Mr. “R” did not avoid them; the Tribunal sees no cogent consideration why the Fund should be absolved of those costs simply because they were indirectly rather than directly incurred.
- The Tribunal recognizes the singular factual circumstance of Mr. “R”’s case but concludes that equal treatment concerning the fundamental right to physical security should govern.

### Remedies, calculations, and orders
- Article XIV, Section 1 of the Statute requires that if the Tribunal finds an individual decision unlawful, it “shall prescribe the rescission of such decision and all other measures, whether involving the payment of money or otherwise, required to correct the effects of that decision.”
- The Tribunal rescinds the Fund’s decision to deny payment of security costs indirectly incurred by Mr. “R”.
- Applicant acknowledged that direct assessment of security costs passed on to hotel guests in the rental fee is not possible; as a proxy he requested guard services amounting to $1,500 per month multiplied by 36 months, equaling $54,000.
- The $1,500 per month figure originates from August 1999 HRD correspondence noting cost savings to the Fund as $1,500 per month (based upon security costs for the Resident Representative in Abidjan).
- The Acting Chief of the Field Security Office in June 2002 estimated “typical costs to achieve...minimum essential standards” for protection of private expatriate residences in Abidjan as:
  - a one time expense of approximately $10,000 for enhancements to property; and
  - an annual guard service fee of approximately $18,000 ($1,500 per month).
- The Tribunal concludes that $54,000 is the most reasonable approximation the record affords of security costs incurred by Mr. “R” and prescribes the Fund’s payment of that sum to Applicant to correct the effects of the rescinded decision.
- The Administrative Tribunal of the International Monetary Fund unanimously decides:
  1. Mr. “R”’s current claim is not debarred by reason of res judicata.
  2. The decision of the Fund to deny payment of security costs indirectly incurred by Mr. “R” is rescinded.
  3. The Fund shall pay the sum of $54,000 to Mr. “R” as the most reasonable approximation that the record affords of security costs incurred by him in the course of his assignment in Abidjan.
- Signatories and formalities:
  - Stephen M. Schwebel, President
  - Nisuke Ando, Associate Judge
  - Michel Gentot, Associate Judge
  - Celia Goldman, Registrar
  - Washington, D.C., December 10, 2004

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_Source: https://www.imf.org/-/media/files/imfat/j2004-1.pdf_