## j2010-2 - Introduction

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### Introduction: matter before the Tribunal
- The Administrative Tribunal of the International Monetary Fund met on February 8 and 9, 2010, composed of Judge Stephen M. Schwebel, President, and Judges Nisuke Ando and Michel Gentot, to adjudge the case brought by Mr. Christopher Faulkner‑MacDonagh, a former staff member of the Fund.
- Applicant contests the Fund’s refusal of his request for voluntary separation under the Fund’s 2008 downsizing program.
- Applicant’s challenges include:
  - Contesting regulations implementing the Fund’s right of refusal following over‑subscription of the voluntary phase.
  - Challenging application of those regulations to his individual case.
  - Challenging budgetary decisions relating to financing of the downsizing as improperly limiting total separations.
  - Alleging discrimination in permitting all volunteers in Grades A1‑A8 and B‑levels to separate under beneficial terms while Grade A9‑A15 professional positions, including the Applicant, were subject to the Fund’s right of refusal.
  - Challenging the process differentiating among volunteers in the Grade A11‑A15 fungible macroeconomist group and alleging erroneous assessment of his relative competency based upon MARs (“Merit‑to‑Allocation Ratios”).
  - Asserting that the Fund’s Grievance Committee improperly declined jurisdiction over his claims and that his Application to the Tribunal was timely filed following exhaustion of administrative review channels.

### The Procedure: filing and pleadings
- Filing timeline and procedural actions:
  - Applicant filed an Application with the Administrative Tribunal on August 11, 2009.
  - Pursuant to Rule VII, para. 6, the Registrar advised that the Application had deficiencies and allowed time for correction; once corrected within the period, the Application was considered filed on the original date.
  - The Application was transmitted to Respondent on August 20, 2009.
  - On August 28, 2009, pursuant to Rule IV, para. (f), the Registrar circulated within the Fund a notice summarizing the issues raised in the Application.
  - Respondent filed its Answer on October 5, 2009.
  - Applicant submitted his Reply on November 16, 2009.
  - The Fund’s Rejoinder was filed on December 16, 2009.
- Threshold objection by Respondent:
  - Respondent contends the Application is inadmissible because the complaint did not fall within the subject matter jurisdiction of the Fund’s Grievance Committee; therefore no administrative review channels existed and the Application should have been filed with the Tribunal within three months of the refusal decision.
- Merits positions summarized:
  - Respondent maintains the refusal flowed from proper application of governing regulations for the Fund’s right of refusal after over‑subscription.
  - Respondent characterizes the regulations as a proper exercise of discretionary authority, free from impermissible discrimination, and based on institutional considerations in “refocusing” the Fund’s mission.
  - Respondent states Applicant’s MARs percentile placed him within the Grade A11‑A15 fungible macroeconomists group whose refusal was automatic, and neither his department nor the Institutional Panel placed him in the “Assessment Group”; Applicant did not present views to the Panel.
  - Respondent maintains budgetary treatment of the restructuring exercise was proper.

### Requests for production of documents
- Applicant sought:
  1. All relevant documents, emails, or other communication to/from the Managing Director, his office, or other Fund officials relating to alleged discriminatory discretionary decisions in the downsizing exercise.
  2. All documentation regarding Applicant’s case, including the categorical acceptance of volunteers from A1‑A8 and B‑level grades, discussions between the Managing Director, department heads, and Fund staff/contractors concerning the separation program, and documentation on the budgeting process and contingency plans for over/under‑runs.
  3. All documents showing any B‑level staff hired back after accepting voluntary separation.
  4. All documents showing the Fund’s revisions allowing B‑level staff to remain at the Fund after May 13, 2009.
  5. The October 7, 2008 email from OBP on the restructuring exercise.
  6. The report of the Working Group Reviewing the Size of Divisions and Support Across the Fund.
- Procedural handling:
  - Respondent accepted the document requests, attaching responsive documents to the Answer.
  - Applicant later requested Annexes to the “Report and Recommendations of the Institutional Panel on the Exercise of the Right of Refusal” (May 16, 2008).
  - In its Rejoinder, Respondent appended a redacted copy of Annex III and stated Annexes I and II are lists of accepted staff and Annex III is a list of volunteers not placed in the Assessment Group (including the Applicant) and therefore automatically accepted or refused per Staff Bulletin 08/03, Supp. 2.
  - Annex III provided to Applicant is titled “Volunteers Not Individually Assessed by the Institutional Panel (Automatically Accepted/Refused)” and includes Applicant’s name, department, job title and grade in the section for Grade A11‑A15 fungible macroeconomists whose requests were automatically refused; other staff names are redacted.
  - Respondent objects to providing Annexes I and II to Applicant citing privacy interests and lack of probative value, but offered to provide all Annexes unredacted to the Tribunal for in camera inspection.
- Parties’ competing theories:
  - Applicant alleges erroneous and illegal assessment of relative competency by the Institutional Panel and seeks the underlying data the Panel relied on.
  - Respondent maintains automatic denial based on MARs cut‑offs and lack of placement in the Assessment Group.

### Request for oral proceedings
- Applicant requested oral proceedings pursuant to Rule VII, para. 2(i) and Rule XIII, asserting critically relevant facts in dispute that can only be substantiated by the Annexes and witness testimony with first‑hand knowledge of the decision against Applicant.
- Applicant renewed the request in his Reply and connected it to his document requests, arguing the Grievance Committee did not give him an opportunity to present evidence at oral proceedings or order production of documents.
- Respondent opposed oral proceedings, asserting there are no material facts in dispute because the contested decision resulted from proper application of the downsizing regulations and the documentary record and pleadings fully address the issues.
- Rule XIII provides that oral proceedings shall be held if the Tribunal deems them useful; the Tribunal concluded the extensive documentary record and the written pleadings of the parties provide a sufficient basis to decide the case.

### Rule XIII; The Fund’s 2008 Downsizing Exercise — factual and regulatory summary
- Procedural posture:
  - Rule XIII: “[o]ral proceedings shall be held if, on its own initiative or at the request of a party following an opportunity for the opposing party to present its views pursuant to Rules VII – X, the Tribunal deems such proceedings useful.”
  - The Tribunal concluded oral proceedings were unnecessary given the record.
- Factual background: scope and outcomes of the voluntary phase:
  - 492 volunteers separated under the beneficial terms of the downsizing program.
  - All of the 206 volunteers in the A1‑A8 grade range separated.
  - All of the 110 volunteers in the B1‑B5 grade range separated.
  - 176 of the 275 volunteers in the A9‑A15 grade range separated. (Message [to the staff] from the Managing Director on the Completion of the Voluntary Phase, May 19, 2008.)
  - Mr. Faulkner‑MacDonagh and Mr. Billmeier are two of the 99 staff members whose applications for voluntary separation were declined as a result of the over‑subscription of the downsizing program.
- Regulatory framework (Staff Bulletin No. 08/03 and Supplement 2):
  - Staff Bulletin No. 08/03 (February 29, 2008) established a voluntary phase followed by a potential mandatory phase; voluntary window March 1 through April 21, 2008; the Fund reserved the right to refuse volunteers based on “budgetary constraints” or “the business needs of the Fund”; use of an Institutional Panel (IP) and Department Directors to recommend refusals when relative competency assessments required.
- Managing Director’s April 29, 2008 report:
  - The downsizing had envisaged reducing staff by 380 positions, but 591 staff members requested separation under the program. (Message [to the staff] from the Managing Director on the Voluntary Separation Phase, April 29, 2008.)
  - The Fund could accommodate about 30 percent of volunteers in excess of the target number of 380 while staying within the three‑year restructuring budget approved by the Board.
  - Differentiated treatment by grade range: all requests in A1‑A8 and B‑level groups accepted; for A9‑A15 the Fund needed to “retain about 100 to 125 staff out of the total of 275 volunteers in this grade range.”
- Supplement 2 (May 6, 2008):
  - Confirmed budget can only accommodate additional volunteers up to 30 percent more than required reductions at the A9‑A15 level; A9‑A15 volunteers above this threshold will need to be refused.
  - Affirmed the Fund would refuse volunteers when cost acceptance would exceed the approved $185 million multi‑year restructuring budget.
  - Primary criterion to identify individual A9‑A15 volunteers for refusal was “relative competency,” with procedures varying by fungible group size.

### MARs‑based framework for large fungible group of A11‑A15 macroeconomists
- MAR definition: “The MAR (Merit‑to‑Allocation Ratio) is the ratio of a staff member’s actual merit increase to the amount budgeted for this purpose.”
- Operational rules for A11–A15 macroeconomist volunteers:
  - All A11–A15 macroeconomists were ranked within their department according to their 3‑year MAR averages, giving each volunteer a MARs percentile; staff were advised of their MARs percentiles at the start of the voluntary phase.
  - A uniform MARs cut‑off percentile would be set so that the number of volunteers with MARs averages above the cut‑off percentile equals the number of A11–A15 macroeconomists for whom the right of refusal needed to be exercised (the “MARs cut‑off group”).
- Based on MARs percentiles, volunteers were divided into three groups:
  - Institutional Panel Assessment Group:
    - Volunteers whose MARs averages place them in the bottom 10‑20 percent of the MARs cut‑off group, and a group of staff equal in number to 10‑20 percent of the MARs cut‑off group whose MARs averages are the highest among those below the MARs cut off (the “Assessment Band”); precise ranges to take account of MAR distribution and bunching.
    - All volunteers within the Macroeconomist Group who do not have a MARs average.
    - Any volunteers above the Assessment Band whom the relevant Department Director or the Institutional Panel (in consultation with the Director and taking into account staff views) represents should be included on grounds that their MARs percentile does not reflect relative competence; such representations must be exceptional and supported by detailed written explanation.
  - Automatic acceptance group:
    - All volunteers whose MARs fall below the Assessment Band shall be notified that their application for separation has been accepted.
  - Automatic refusal group:
    - All volunteers whose MARs fall above the Assessment Band and who have not been placed in the Institutional Panel Assessment Group under the exceptional representation procedure shall be notified that the Fund will exercise the right of refusal with respect to them.

### Institutional Panel assessment framework and process
- Institutional Panel, together with relevant Department Directors, assessed volunteers within the Institutional Panel Assessment Group to identify those who constituted "a group containing the most competent volunteers within the Macroeconomist Group" equal in size to the number of volunteers for whom the right of refusal had to be exercised.
- The Institutional Panel recommended:
  - (a) the right of refusal be exercised with respect to those volunteers so identified; and
  - (b) the Fund accept the applications for separation under the voluntary framework with respect to all other volunteers in the Institutional Panel Assessment Group.
- Additional criteria considered included:
  - (i) Whether there are any reasons why a staff member’s MAR may not be indicative of relative performance.
  - (ii) The number of outstanding ratings from 1998–2007.
  - (iii) Trends in performance since May 1, 2007 relative to the last APR.
  - (iv) The extent to which the staff member has skills, experience required for the future that would be costly or difficult to replace.
  - (v) The length of time in grade.
  - (vi) The staff member’s potential, defined as capacity for growth, including competencies such as learning agility, ability to resolve and reconcile differences, ability to operate on both strategic and tactical levels, degree of respect of peers, demonstrated behaviors of inclusion and respecting diverse views, etc.
- Volunteers could present views in writing to the Institutional Panel by 5:00 p.m., Monday May 12, 2008.

### Applicant’s case and Tribunal findings on MARs and assessments
- Applicant timeline and facts:
  - Employment began April 23, 2001.
  - On April 21, 2008 Applicant, then a Grade A14 Senior Economist, requested voluntary separation indicating May 13, 2009 as preferred last day of active service and received automated confirmation.
  - On March 4, 2008 Applicant was informed his 3‑year average MAR was "0.98, which puts you in the 30th percentile of the distribution of A11‑A15 economists in [his department]."
  - On May 21, 2008 Applicant was notified by email that his application had been declined.
  - Applicant resigned on September 5, 2008 to take other employment; because his request had been denied, he did not receive enhanced separation benefits available under the program.
- Tribunal observations and holdings:
  - The Tribunal accepted documentary evidence that the 30th percentile placed Applicant above the cut‑off for automatic refusal.
  - Annex III (redacted) titled “Volunteers Not Individually Assessed by the Institutional Panel (Automatically Accepted/Refused)” shows:
    - For “Macroeconomists (A11‑A15)” the Annex notes 26 automatic acceptances and 50 automatic refusals among the Grade A11‑A15 macroeconomist volunteers.
    - Applicant’s name (with department, job title and grade) is listed in the automatic refusal section.
    - Total number of A11‑A15 economist volunteers not individually assessed by the Institutional Panel was 76.
    - In all job categories the total number of automatic acceptances was 72 and the total number of automatic refusals was 50, resulting in 122 volunteers not individually assessed by the Institutional Panel.
  - Documentary evidence confirms Applicant’s request was not individually assessed by the Institutional Panel and was automatically refused based on MARs percentile.
  - Applicant did not raise with the Institutional Panel any ground challenging the validity of the MARs formula or his MARs calculation during the voluntary window; Supplement 1 (March 21, 2008) advised staff to contact HRD no later than March 31, 2008 with concerns about MARs calculations.
  - The Tribunal held it was not an abuse of discretion for the Fund to apply MARs calculations as a Fund‑wide indicator of relative competency and that the Fund was not bound to give Applicant more individualized consideration.
  - The Tribunal described the Fund’s refusal communication as “cryptic and unrevealing” but held that the Fund’s failure to provide a fuller explanation was not a ground for a successful complaint.
  - The Tribunal rejected estoppel based on alleged Deputy Director statements that all departmental requests would be granted.
  - The Tribunal held the Fund was entitled to decide which charges were allocated to the restructuring budget and that the restructuring budget’s objective was to accomplish the restructuring strategy rather than to accept the maximum number of volunteers.
- Outcome:
  - The Administrative Tribunal of the International Monetary Fund unanimously decides that:
    - The Application of Mr. Faulkner‑MacDonagh is denied.

*Administrative Tribunal of the International Monetary Fund, Decision dated February 9, 2010.*

### Introduction

### j2010-2 - Introduction

### Introduction: matter before the Tribunal
- The Administrative Tribunal of the International Monetary Fund met on February 8 and 9, 2010, composed of Judge Stephen M. Schwebel, President, and Judges Nisuke Ando and Michel Gentot, to adjudge the case brought by Mr. Christopher Faulkner-MacDonagh, a former staff member of the Fund.
- Applicant contests the Fund’s refusal of his request for voluntary separation under the Fund’s 2008 downsizing program.
- Applicant’s challenges include:
  - Contesting regulations implementing the Fund’s right of refusal following over-subscription of the voluntary phase.
  - Challenging application of those regulations to his individual case.
  - Challenging budgetary decisions relating to financing of the downsizing as improperly limiting total separations.
  - Alleging discrimination in permitting all volunteers in Grades A1-A8 and B-levels to separate under beneficial terms while Grade A9-A15 professional positions, including the Applicant, were subject to the Fund’s right of refusal.
  - Challenging the process differentiating among volunteers in the Grade A11-A15 fungible macroeconomist group and alleging erroneous assessment of his relative competency based upon MARs (“Merit-to-Allocation Ratios”).
  - Asserting that the Fund’s Grievance Committee improperly declined jurisdiction over his claims and that his Application to the Tribunal was timely filed following exhaustion of administrative review channels.

### The Procedure: filing and pleadings
- Filing timeline and procedural actions:
  - Applicant filed an Application with the Administrative Tribunal on August 11, 2009.
  - Pursuant to Rule VII, para. 6, the Registrar advised that the Application had deficiencies and allowed time for correction; once corrected within the period, the Application was considered filed on the original date.
  - The Application was transmitted to Respondent on August 20, 2009.
  - On August 28, 2009, pursuant to Rule IV, para. (f), the Registrar circulated within the Fund a notice summarizing the issues raised in the Application.
  - Respondent filed its Answer on October 5, 2009.
  - Applicant submitted his Reply on November 16, 2009.
  - The Fund’s Rejoinder was filed on December 16, 2009.

- Threshold objection by Respondent:
  - Respondent contends the Application is inadmissible because the complaint did not fall within the subject matter jurisdiction of the Fund’s Grievance Committee; therefore no administrative review channels existed and the Application should have been filed with the Tribunal within three months of the refusal decision.
- Merits positions summarized:
  - Respondent maintains the refusal flowed from proper application of governing regulations for the Fund’s right of refusal after over-subscription.
  - Respondent characterizes the regulations as a proper exercise of discretionary authority, free from impermissible discrimination, and based on institutional considerations in “refocusing” the Fund’s mission.
  - Respondent states Applicant’s MARs percentile placed him within the Grade A11-A15 fungible macroeconomists group whose refusal was automatic, and neither his department nor the Institutional Panel placed him in the “Assessment Group”; Applicant did not present views to the Panel.
  - Respondent maintains budgetary treatment of the restructuring exercise was proper.

### Requests for production of documents
- Applicant’s document requests submitted with the Application (pursuant to Rule VII, para. 2(h) and Rule XVII) sought:
  1. All relevant documents, emails, or other communication to/from the Managing Director, his office, or other Fund officials relating to alleged discriminatory discretionary decisions in the downsizing exercise.
  2. All documentation regarding Applicant’s case, including the categorical acceptance of volunteers from A1-A8 and B-level grades, discussions between the Managing Director, department heads, and Fund staff/contractors concerning the separation program, and documentation on the budgeting process and contingency plans for over/under-runs.
  3. All documents showing any B-level staff hired back after accepting voluntary separation.
  4. All documents showing the Fund’s revisions allowing B-level staff to remain at the Fund after May 13, 2009.
  5. The October 7, 2008 email from OBP on the restructuring exercise.
  6. The report of the Working Group Reviewing the Size of Divisions and Support Across the Fund.

- Procedural handling of document requests:
  - Respondent was given opportunity to present views under Rule XVII and Rule VIII, para. 5, and accepted the document requests, attaching responsive documents to the Answer.
  - Applicant later requested Annexes to the “Report and Recommendations of the Institutional Panel on the Exercise of the Right of Refusal” (May 16, 2008), arguing the Annexes contained the data the Panel relied on and were necessary to prove why his individual request was denied (Applicant’s position: Annexes show his MARs were incorrect and relative competency illegally and erroneously assessed).
  - In its Rejoinder, Respondent appended a redacted copy of Annex III and stated Annexes I and II are lists of accepted staff and Annex III is a list of volunteers not placed in the Assessment Group (including the Applicant) and therefore automatically accepted or refused per Staff Bulletin 08/03, Supp. 2.
  - Annex III provided to Applicant is titled “Volunteers Not Individually Assessed by the Institutional Panel (Automatically Accepted/Refused)” and includes Applicant’s name, department, job title and grade in the section for Grade A11-A15 fungible macroeconomists whose requests were automatically refused; other staff names are redacted.
  - Respondent objects to providing Annexes I and II to Applicant citing privacy interests and lack of probative value, but offered to provide all Annexes unredacted to the Tribunal for in camera inspection.
  - The Fund’s position: Annexes do not contain reasons for individual acceptances/refusals; the principles, procedures and criteria are described in the body of the Panel’s Report and the Annexes are lists.
  - The redacted Annex III demonstrates Applicant was among volunteers automatically refused; Applicant states he seeks the underlying data the Panel relied on (not other staff names).
- Current status of document requests:
  - The redacted Annex III was provided; Respondent maintains Annexes I and II are not probative and raises privacy objections.
  - The parties’ exchanges reflect competing theories: Applicant alleges erroneous and illegal assessment of relative competency by the Institutional Panel; Respondent maintains automatic denial based on MARs cut-offs and lack of placement in the Assessment Group.

### Request for oral proceedings
- Applicant’s requests:
  - Applicant requested oral proceedings pursuant to Rule VII, para. 2(i) and Rule XIII, asserting critically relevant facts in dispute that can only be substantiated by the Annexes and witness testimony with first-hand knowledge of the decision against Applicant.
  - Applicant renews the request in his Reply and connects it to his document requests, arguing the Grievance Committee did not give him an opportunity to present evidence at oral proceedings or order production of documents.
- Respondent’s position:
  - Respondent opposes oral proceedings, asserting there are no material facts in dispute because the contested decision resulted from proper application of the downsizing regulations and the documentary record and pleadings fully address the issues.
- Relevant procedural rules cited:
  - Rule VII, para. 2(i) requires an application to state any request for oral proceedings as provided by Article XII and Rule XIII.
  - Rule XIII provides that oral proceedings shall be held if the Tribunal deems them useful, may be open or private, outlines procedures for witnesses and experts, and empowers the President to issue orders necessary for orderly disposition of cases.

### Observations from the procedural record
- Key procedural dates and references:
  - Application filed: August 11, 2009.
  - Application transmitted to Respondent: August 20, 2009.
  - Registrar’s internal notice circulated: August 28, 2009.
  - Answer filed: October 5, 2009.
  - Reply filed: November 16, 2009.
  - Rejoinder filed: December 16, 2009.
- Regulatory and documentary points emphasized by the parties:
  - Applicant emphasizes need for Annexes to assess alleged erroneous MARs and relative competency determinations.
  - Respondent emphasizes that MARs percentiles and Staff Bulletin 08/03, Supp. 2 methodology resulted in automatic acceptance/refusal without individual Annex-based reasoning, and that the body of the Institutional Panel’s Report contains the controlling principles, procedures and criteria.

*Administrative Tribunal of the International Monetary Fund (meeting February 8 and 9, 2010).*

### 18.      Rule XIII of the Tribunal’s Rules of Procedure provides that “[o]ral proceedings shall be

### Rule XIII; The Fund’s 2008 Downsizing Exercise — factual and regulatory summary

### Procedural posture
- Rule XIII of the Tribunal’s Rules of Procedure provides that “[o]ral proceedings shall be held if, on its own initiative or at the request of a party following an opportunity for the opposing party to present its views pursuant to Rules VII – X, the Tribunal deems such proceedings useful.”
- The Tribunal concluded that the extensive documentary record and the written pleadings of the parties provide a sufficient basis to decide the case.

### Factual background: scope and outcomes of the voluntary phase
- The Fund’s 2008 downsizing exercise produced the following separations:
  - 492 volunteers separated under the beneficial terms of the downsizing program.
  - All of the 206 volunteers in the A1-A8 grade range separated.
  - All of the 110 volunteers in the B1-B5 grade range separated.
  - 176 of the 275 volunteers in the A9-A15 grade range separated. (Message [to the staff] from the Managing Director on the Completion of the Voluntary Phase, May 19, 2008.)
- Mr. Faulkner-MacDonagh and Mr. Billmeier are two of the 99 staff members whose applications for voluntary separation were declined as a result of the over-subscription of the downsizing program.

### Regulatory framework governing the downsizing (Staff Bulletin No. 08/03 and Supplement 2)
- Staff Bulletin No. 08/03 (“Refocusing and Modernizing the Fund: the Framework for the Downsizing Exercise”), issued February 29, 2008, established:
  - A voluntary phase followed by a potential mandatory phase.
  - A voluntary application window from March 1 through April 21, 2008; after the voluntary phase closed, the staff member’s offer became irrevocable.
  - The Fund’s reserved right to refuse volunteers based on “budgetary constraints” or “the business needs of the Fund.”
  - Use of an Institutional Panel (IP) and Department Directors to recommend which volunteers should be refused when relative competency assessments are required.
- The Staff Bulletin emphasized institutional equity across fungible groups and that assessments of relative competency should be conducted on an institution-wide basis to avoid disadvantaging staff in departments with larger cuts.

### Relationship to mandatory-phase procedures and GAO No. 16
- Mandatory separations, if needed, would be implemented under GAO No. 16 (as amended and attached as Annex III to Staff Bulletin No. 08/03).
- Revised Section 12 (Reduction in Strength, Abolition of Position or Change in Job Requirements) used “relative competency” as the touchstone for selecting staff when the function continues and multiple qualified staff are considered (“fungible groups of staff”).

### Managing Director’s April 29, 2008 report on voluntary phase results
- The downsizing had envisaged reducing staff by 380 positions, but 591 staff members requested separation under the program. (Message [to the staff] from the Managing Director on the Voluntary Separation Phase, April 29, 2008.)
- The Managing Director concluded the rebalancing objective had been achieved and that the Fund could “be able to achieve the targeted rebalancing, without recourse to mandatory separation,” while noting “there may still be a need for a few mandatory separations in some specialized work groups.”
- Budgetary constraints meant not all requests could be accommodated. However, because volunteers on average sought to stay for shorter periods and Separation Benefits Fund payments were lower than budgeted, the Fund could accommodate about 30 percent of volunteers in excess of the target number of 380 while staying within the three-year restructuring budget approved by the Board.
- The Managing Director announced differentiated treatment of volunteers by grade range:
  - In both the A1-A8 and B-level groups, the number of requests allowed acceptance of all requests.
  - For the A9-A15 group, the Fund needed to “retain about 100 to 125 staff out of the total of 275 volunteers in this grade range.”

### Clarification to staff on fairness and grade-group treatment
- Management’s Q & A (Updated: Right of Refusal, 5/2/08) explained that the three grade categories—A1-A8, A9-A15, and B-level—were the basis for budget construction and targeted reductions.
- The Fund applied a uniform percentage allowance across grade groups of “30 percent” of the required reductions for accommodating volunteers beyond the targeted reductions, which led to acceptance in A1-A8 and B1-B5 but required refusals among A9-A15 volunteers above the threshold.

### Supplement 2 (May 6, 2008): allocation rules and MARs methodology for A9-A15
- Staff Bulletin No. 08/03, Supplement 2 (May 6, 2008) confirmed that “since the budget can only accommodate additional volunteers up to 30 percent more than the required reductions at the A9-A15 level, the A9-A15 volunteers above this threshold will need to be refused.”
- Supplement 2 affirmed the Fund would refuse volunteers when cost acceptance would exceed the approved $185 million multi-year restructuring budget.
- The primary criterion to identify individual A9-A15 volunteers for refusal was “relative competency,” with procedures varying by fungible group size (large, small, single-department).

### MARs-based framework for large fungible group of A11-A15 macroeconomists
- The A11-A15 macroeconomists were classified as a “large fungible group” and subject to a uniform MARs cut-off percentile across relevant departments (the “MARs cut-off”).
- MAR definition: “The MAR (Merit-to-Allocation Ratio) is the ratio of a staff member’s actual merit increase to the amount budgeted for this purpose.”
- Operational rules applied to A11–A15 macroeconomist volunteers:
  - All A11–A15 macroeconomists had been ranked within their department according to their 3-year MAR averages, giving each volunteer a MARs percentile; staff were advised of their MARs percentiles at the start of the voluntary phase.
  - A uniform MARs cut-off percentile would be set so that the number of volunteers with MARs averages above the cut-off percentile equals the number of A11–A15 macroeconomists for whom the right of refusal needed to be exercised (the “MARs cut-off group”).
- Based on MARs percentiles, volunteers were divided into three groups:
  - Institutional Panel Assessment Group:
    - Volunteers whose MARs averages place them in the bottom 10-20 percent of the MARs cut-off group, and a group of staff equal in number to 10-20 percent of the MARs cut-off group whose MARs averages are the highest among those below the MARs cut off (the “Assessment Band”); precise ranges to take account of MAR distribution and bunching.
    - All volunteers within the Macroeconomist Group who do not have a MARs average.
    - Any volunteers above the Assessment Band whom the relevant Department Director or the Institutional Panel (in consultation with the Director and taking into account staff views) represents should be included on grounds that their MARs percentile does not reflect relative competence; such representations must be exceptional and supported by detailed written explanation.
  - Automatic acceptance group:
    - All volunteers whose MARs fall below the Assessment Band shall be notified that their application for separation has been accepted.
  - Automatic refusal group:
    - All volunteers whose MARs fall above the Assessment Band and who have not been placed in the Institutional Panel Assessment Group under the exceptional representation procedure shall be notified that the Fund will exercise the right of refusal with respect to them.

*Source: Tribunal judgment and Staff Bulletin No. 08/03 and Supplement 2 (IMF).*

### 36.      As to the assessment of volunteers within the Institutional Panel Assessment Group,

### 36. As to the assessment of volunteers within the Institutional Panel Assessment Group

### Institutional Panel assessment framework and process
- The Institutional Panel, together with relevant Department Directors, assessed all volunteers within the Institutional Panel Assessment Group to identify those volunteers who, when taken together with volunteers refused under paragraph 15, constituted "a group containing the most competent volunteers within the Macroeconomist Group" the size of which equaled the number of volunteers for whom the right of refusal had to be exercised.
- The Institutional Panel recommended to management that:
  - (a) the right of refusal be exercised with respect to those volunteers so identified; and
  - (b) the Fund accept the applications for separation under the voluntary framework with respect to all other volunteers in the Institutional Panel Assessment Group.
- When making the assessments, consideration was to be given to additional criteria set forth in the attachment, which Department Directors applied in a standardized form and provided to the Institutional Panel in advance.

### Additional criteria applied in assessments
- The referenced "additional criteria" included:
  - (i) Whether there are any reasons why a staff member’s MAR may not be indicative of relative performance.
  - (ii) The number of outstanding ratings from 1998–2007.
  - (iii) Trends in performance; specifically whether the staff member’s performance since May 1, 2007 was consistent with, higher than or lower than the last APR.
  - (iv) The extent to which the staff member has the skills, experience required for the future that would be costly or difficult to replace.
  - (v) The length of time in grade, as a possible indication of the degree to which a staff member may have plateaued.
  - (vi) The staff member’s potential, defined as capacity for growth, either upwards or laterally, to contribute effectively to the organization in the longer term. This may include competencies such as learning agility, ability to resolve and reconcile differences, ability to operate on both strategic and tactical levels, degree of respect of peers, demonstrated behaviors of inclusion and respecting diverse views, etc.

### Opportunity to present views to the Institutional Panel
- Volunteers could present views in writing to the Institutional Panel explaining why their 3-year MARs average was not reflective of their relative competency, including taking into account prior supervisor feedback.
- Such views had to be received by 5:00 p.m., Monday May 12, 2008 to be taken into account by the Panel; submissions could be emailed to INSTITUTIONAL PANEL.

### Results of the exercise of the right of refusal and communications
- The Institutional Panel met from May 9–16, 2008 and on May 16, 2008 issued the "Report and Recommendations of the Institutional Panel on the Exercise of the Right of Refusal," which formed the basis for Management’s individual accept/refuse decisions.
- The Report described procedures for the large fungible group of macroeconomists:
  - An Institutional Panel Assessment Group was established per the May Staff Bulletin procedures.
  - The group included economists within the Assessment Band and any volunteer whose MARs percentile placed them above the Assessment Band but whom the Department or Panel nevertheless felt should be considered for voluntary separation based on relative competence.
  - Volunteers from the macroeconomist group whose MARs percentiles were below the Assessment Band were automatically accepted for separation.
  - Volunteers from the macroeconomist group whose MARs percentiles were above the Assessment Band and who were not placed in the Assessment Group were automatically refused for separation.
- The Managing Director communicated to staff: "It still means that 99 volunteers cannot be accepted." A message dated May 19, 2008 expressed that some staff would be offered leave without pay and that the Managing Director had met with representatives of the A9-A15 group to listen to concerns.

### Applicant (Mr. Faulkner-MacDonagh) case and timeline
- Employment began April 23, 2001.
- On April 21, 2008 (final day of the voluntary window), Applicant, then a Grade A14 Senior Economist in an area department, requested voluntary separation pursuant to the downsizing exercise, indicating May 13, 2009 as preferred last day of active service and received automated confirmation.
- Applicant had been informed on March 4, 2008 that his 3-year average MAR was "0.98, which puts you in the 30th percentile of the distribution of A11-A15 economists in [his department]."
- On May 21, 2008, Applicant was notified by email that his application had been declined.
- Applicant continued to serve until resigning on September 5, 2008 to take other employment; because his request had been denied, he did not receive enhanced separation benefits available under the program.

### Channels of administrative review and subsequent filings
- On December 24, 2008, Applicant filed a Grievance with the Fund’s Grievance Committee contesting the denial of his voluntary separation request.
- The Fund moved to dismiss for lack of subject matter jurisdiction, arguing Applicant challenged systemic regulations rather than the application of those regulations to his individual case.
- On May 28, 2009, the Grievance Committee granted the Fund’s Motion and concluded it did not have jurisdiction because Applicant was "seeking to challenge the rules promulgated by the Fund to implement the restructuring program, rather than the manner in which these regulations were applied to him personally."
- On August 11, 2009, Applicant filed his Application with the Administrative Tribunal.

### Parties’ principal contentions — Applicant
- The Fund’s decision to deny Applicant’s request was erroneous, discriminatory, and illegal.
- The Fund’s decision-making did not align with its stated intent to base refusals on budgetary constraints or business needs.
- Applying additional criteria only to Grades A9-A15, while categorically accepting Grade A1-A8 and B-level volunteers, was inconsistent with Fund rules and principles of international administrative law.
- The Fund misassessed Applicant’s MAR relative to others; volunteers in the A11-A15 fungible group with higher or similar MARs were accepted while Applicant was refused.
- The Institutional Panel made factual and legal errors by not recommending Applicant’s request be granted based on relative competency; an individual analysis and correct application of MAR were required.
- The Deputy Director of Applicant’s department allegedly stated that all departmental separation requests would be granted.
- The Fund’s budgetary approach to the downsizing was illegal.
- The Grievance Committee erred in dismissing Applicant’s Grievance for lack of subject matter jurisdiction.
- The Tribunal has jurisdiction ratione temporis; Applicant seeks relief including:
  - a. quashing the Grievance Committee’s dismissal;
  - b. that Applicant’s claims be heard;
  - c. rescission of the decision denying separation;
  - d. monetary relief equal to what Applicant would have received had he separated effective September 5, 2008 under the downsizing program, plus tax allowances as applicable;
  - e. moral and punitive damages in the amounts of six months salary each; and
  - f. legal costs for Tribunal representation and exhaustion of administrative review.

### Parties’ principal contentions — Respondent (Fund)
- The Tribunal lacks jurisdiction ratione temporis because no channels of administrative review were applicable and, therefore, Article VI required filing within three months of the refusal decision.
- The right of refusal was properly exercised consistent with the downsizing framework and legal principles.
- The Fund did not abuse its discretion in formulating the framework; the paramount objective was to accomplish the refocusing of the Fund rather than accept the maximum number of volunteers.
- Applying the right of refusal only to Grade A9-A15 staff was a reasonable exercise of discretion, related to downsizing goals.
- Applicant’s MAR ranking placed him in the category of Grade A11-A15 macroeconomists whose requests were automatically declined.
- Simple comparison of MARs among volunteers was not dispositive of acceptance/refusal decisions.
- Neither his department nor the Institutional Panel placed Applicant in the "Assessment Group," and Applicant did not present views to the Institutional Panel on his 3-year MARs average.
- Applicant’s claim that he relied on Deputy Director statements is not credible and is contradicted by Applicant’s actions.
- The restructuring budget’s treatment was proper; its primary objective was accomplishing restructuring strategy rather than maximizing accepted volunteers.

### Issues identified for Tribunal consideration
- (1) Timeliness of the Application following exhaustion of available administrative review channels.
- (2) Whether the Fund abused its discretion in refusing Applicant’s request and whether the decision violated Fund internal law or general principles of international administrative law.
- (3) Whether the Fund discriminated impermissibly by treating A1-A8 and B-level volunteers differently from A9-A15 staff.
- (4) Whether the Fund acted arbitrarily or violated fair procedures in differentiating among Grade A11-A15 fungible macroeconomist volunteers.
- (5) Whether the Fund erred in assessing Applicant’s relative competency based on MARs.
- (6) Whether the Fund impermissibly misled Applicant about prospects that his request would be granted.
- (7) Whether budgetary financing decisions for the downsizing improperly limited the total number of staff able to separate under its terms, substantially affecting Applicant’s request.

### Admissibility—statutory framework and interpretation
- Article VI of the Tribunal’s Statute provides time limits and conditions for admissibility:
  - Section 1: An application challenging an individual decision is inadmissible if filed more than three months after exhaustion of available channels of administrative review, or, absent such channels, after notification of the decision.
  - Section 2: An application challenging a regulatory decision is inadmissible if filed more than three months after announcement or effective date; illegality of a regulatory decision may be asserted at any time in support of an admissible application challenging an individual decision taken pursuant to such regulatory decision.
  - Section 3: The Tribunal may waive time limits in exceptional circumstances if delay is justified.
- Article VI must be read with Article V, which requires exhaustion of available channels of administrative review where the Fund has established such channels.
- The Grievance Committee’s jurisdiction excludes challenges to regulatory decisions; its remit is limited to complaints that a staff member was adversely affected by a decision inconsistent with Fund regulations governing personnel and conditions of service.
- The Tribunal’s Statute expressly confers jurisdiction over challenges to both "individual" and "regulatory" decisions; where a challenge to an individual decision is closely related to a regulatory challenge, questions arise about the relationship between exhaustion (Article V) and statute-of-limitations (Article VI) requirements.

*International Monetary Fund.*

### 55.      Section 2 of Article VI governs a case in which an applicant challenges both a regulatory

### Section 2 of Article VI — Challenge to regulatory and individual decisions (Faulkner‑MacDonagh)

### Applicable statutory rule and central admissibility question
- Section 2 of Article VI: "An application challenging the legality of a regulatory decision shall not be admissible if filed with the Tribunal more than three months after the announcement or effective date of the decision, whichever is later; provided that the illegality of a regulatory decision may be asserted at any time in support of an admissible application challenging the legality of an individual decision taken pursuant to such regulatory decision."
- Central question presented: Was Mr. Faulkner‑MacDonagh required to bring his complaint directly to the Administrative Tribunal within three months of the Fund’s refusal of his request for voluntary separation pursuant to the downsizing exercise?

### Tribunal jurisprudence and precedents on regulatory vs individual decisions
- Mr. "R" (IMFAT): the Tribunal observed that where an individual decision is tantamount to upholding a policy, the "individual decision" was nevertheless taken when management declined the applicant’s request for exceptions to the benefits policy; timeliness for challenge to a regulatory decision raised in the context of an individual decision is determined by exhaustion of administrative review of the individual decision (Article VI, para. 2).
- Ms. "G" (IMFAT): applicant filed with the Tribunal within three months of the individual decision and later filed a Grievance to preserve review rights; the Grievance Committee dismissed for lack of jurisdiction similarly to Mr. "R".
- Baker et al. and Daseking‑Frank et al.: applicants challenged regulatory decisions directly within three months; Tribunal noted no channels of review to exhaust in those cases.

### Exhaustion of administrative remedies, Fund communications, and timeliness
- Tribunal preference: recourse to the Grievance Committee where that avenue is available (see Ms. "Y").
- Applicant made an individual request for voluntary separation pursuant to the downsizing and that request was individually denied.
- The Fund communicated to Mr. Billmeier (representative of the Director of Human Resources): 
  - ". . . you have access to the same dispute resolution mechanism as for all formal grievances, as set forth in GAO No. 31. . . . If you do want to pursue a formal challenge to the decision not to accept your application for voluntary separation, . . . . your challenge should go directly to the Grievance Committee, within six months of the date you were informed of the decision."
- The Tribunal has considered whether applicants' conduct evidenced a "casual disregard of legal requirements" when assessing admissibility (see Ms. "M" and Dr. "M"; Estate of Mr. "D").
- Applicant’s timely filing with the Grievance Committee was treated as evidence of a good faith effort at seeking review, consistent with his theory of the case as presented in the Grievance.
- The Fund’s communications regarding the downsizing may have led applicants to pursue the Grievance channel; the communications suggested that the Fund regarded the Grievance Committee as the appropriate venue for refusal-of-request complaints under the downsizing.

### Tribunal’s determination on admissibility and Grievance Committee jurisdiction
- Tribunal view: Applicant was challenging the application of a regulatory decision to his particular circumstances; it was appropriate that he raised the matter in the Grievance Committee.
- The Application to the Tribunal was submitted within three months of the Grievance Committee’s decision dismissing the Grievance for lack of subject matter jurisdiction; the Application therefore was held admissible.
- On the separate challenge that the Grievance Committee improperly concluded it lacked jurisdiction, the Tribunal reaffirmed longstanding principle:
  - The Tribunal does not serve as an appellate body vis‑à‑vis the Grievance Committee; the Committee’s decisions are not "administrative acts" within Article II of the Statute.
  - The Tribunal declines to pass on whether the Grievance Committee erred in dismissing the Grievance for lack of subject matter jurisdiction.
  - The Grievance Committee decides its own jurisdiction pursuant to GAO No. 31, Section 4.04; the Tribunal decides independently whether administrative review channels were exhausted for admissibility purposes.

### Merits — standard of review for discretionary individual decisions
- Principal legal question on the merits: Did the Fund abuse its discretion in refusing Applicant’s request for voluntary separation pursuant to the 2008 downsizing exercise? Did the decision violate the Fund’s internal law or any general principle of international administrative law?
- Context and stakes:
  - The contested decision concerned the value of the separation package Applicant would have received if accepted under the downsizing terms.
  - Applicant was not required to leave the Fund and was not denied the opportunity to do so; dispute concerns the benefit level.
  - Approximately 492 staff members separated under the favorable terms of the downsizing; Mr. Faulkner‑MacDonagh and 98 other volunteers were denied the benefit when the Fund exercised the expressly reserved right of refusal in the event of over‑subscription.
  - The Fund exercised its discretionary power in refusing some volunteers.
- Standard applied to managerial discretion (Commentary on the Statute, cited):
  - Discretionary decisions can be overturned only if shown to be "arbitrary, capricious, discriminatory, improperly motivated, based on an error of law or fact, or carried out in violation of fair and reasonable procedures."
  - In regulatory decisions, scope of review is narrow and tribunals must respect institutional decision‑making authority.

### Applicant’s allegations and Respondent’s defenses
- Applicant’s contentions:
  - Fund failed to follow rules it initially set out for the downsizing.
  - The exercise of the right of refusal only as to Grade A9‑A15 volunteers unfairly disadvantaged a particular category of staff.
  - The Fund improperly assessed Applicant’s "relative competency" vis‑à‑vis other volunteers, specifically among Grade A11‑A15 fungible macroeconomists.
  - These actions were inconsistent with Staff Bulletin No. 08/03 statement: ". . . it may be necessary to refuse volunteers because of either budgetary constraints or the business needs of the institution. However, to the maximum extent possible, the Fund will accept all volunteers."
- Respondent’s position:
  - Adoption of Staff Bulletin No. 08/03 did not legally obligate acceptance of the "maximum number of volunteers."
  - The Fund properly accounted for institutional needs in designing the downsizing program.
  - The refusal reflected the necessary outcome of proper application of sound regulations.
  - There was a rational basis for applying the right of refusal only to Grade A9‑A15 staff members and for the method of differentiating among Grade A11‑A15 macroeconomists.

### Allegation of discrimination and the "rational nexus" test
- Applicant alleges discrimination because all A1‑A8 and B‑level volunteers were accepted while A9‑A15 staff were subject to refusal.
- IMFAT standard for assessing classification schemes against equality of treatment: the "rational nexus" test (Mr. "R"):
  - Respondent’s proffered reasons for the distinction must be supported by evidence; the decision must be capable of being taken "on the basis of facts accurately gathered and properly weighed."
  - There must be a "rational nexus between the classification of persons subject to the differential treatment and the objective of the classification."
  - Tribunal assesses whether stated reasons for different benefits are supported and rationally related to the purposes of the classification (e.g., differences in job responsibilities, recruitment needs, security concerns as accepted in Mr. "R").

*IMF Administrative Tribunal judgment (Faulkner‑MacDonagh) — excerpts and holdings presented in the Tribunal’s reasoning*

### 77.      Similarly in Ms. “G”, in considering whether the method of allocating expatriate benefits

### Similarly in Ms. “G”, in considering whether the method of allocating expatriate benefits discriminated impermissibly among categories of Fund staff

### Rational nexus standard and Tribunal precedent
- Tribunal assesses whether there is a “rational nexus between the goals of the expatriate benefits policy … and its method for allocating these benefits.” (Ms. “G”, para. 79.)
- Tribunal reasoning in Mr. “R” indicates a “rational nexus” does not require a perfect fit and “may rest upon generalizations.” (Ms. “G”, para. 79; Daseking-Frank et al., para. 52.)
- Tribunal described reasonableness in differentiating by visa status: “It is reasonable to accord benefits to G-4 visa holders that are withheld from those in LPR status because the advantages of LPR status run counter to a fixed intention of the staff member concerned to return to his home country upon the completion of his Fund service.” (Ms. “G”, para. 80.)

### Fund’s policy-making discretion and reasonableness
- Tribunal recognizes Fund’s discretion extends to choosing among reasonable alternatives, including selection and refinement of criteria over time (visa criterion chosen in 1985, reaffirmed in 1994, refined in 2002). (Ms. “G”, para. 80.)
- Where managerial decisions are “rationally related to the mission and objectives of the Fund,” the Tribunal will not override them. (Ms. “G”, para. 80.)

### Downsizing decision: structure and justification
- Respondent’s position:
  - The approach chosen by management was “reasonable, fair, and related to the goals of the downsizing.”
  - Applying the right of refusal to only one group was reasonable to align Fund structure with “industry standard” because Fund was “top-heavy” at the B-level and had too many support staff relative to other institutions.
  - Targeting staffing cuts differentially among three grade groups (A1-A8, A9-A15, and B1-B5) was intended to refocus and modernize the Fund.
- Applicant’s objection:
  - The Fund cannot plausibly maintain that all rejected volunteers in A9-A15 were more essential than all volunteers in B-level group (all of whom were accepted).
  - Argues that a “reverse merit” criteria across all grades would have led to denying some applications from groups that received categorical acceptances.
  - Asserts many rejected A9-A15 staff were less valuable than some accepted B-level staff with specialized knowledge.

### Tribunal’s assessment of categorical differentiation
- Tribunal reiterates that a rational nexus may rely on generalizations; some mismatches between individual competency and categorical outcomes do not by themselves invalidate the exercise. (Daseking-Frank et al., para. 52; Ms. “G,” para. 79.)
- Fund advanced tenable reasons to retain Grade A9-A15 staff at a greater rate than other groups, establishing a rational nexus between downsizing objectives and differential allocation of benefits.

### Notice and procedural framing for volunteers
- Staff Bulletin No. 08/03 reserved management’s right to refuse volunteers and stated factors to be taken into account included:
  - (a) whether volunteers are within a fungible category of staff subject to reductions in force, and
  - (b) if so, the extent to which there may be more volunteers in that category than needed to achieve reductions. (Staff Bulletin No. 08/03, p. 3.)
- Staff were placed on notice that disposition of applications would be influenced by the category of staff and the number of volunteers in that category, linked to management’s objective “to achieve staff reductions in a manner that will support the ongoing strategy to refocus and modernize the Fund.” (Staff Bulletin No. 08/03, p. 1.)

### Rationale for differential treatment of Grade A9-A15
- Respondent explained that Grade A9-A15 staff, especially fungible macroeconomists, form the core of the workforce; B-level was over-staffed.
- Disproportionate volunteer rates among A9-A15 staff led Fund to accept all volunteers in Grades A1-A8 and B-level ranges but accept only some volunteers in A9-A15, applying additional criteria within that group.

### Differentiation within A11-A15 macroeconomist fungible group and MARs-based procedure
- For A11-A15 macroeconomists (the largest fungible group), Fund adopted a more detailed procedure to:
  - “retain the relatively most competent staff among any given fungible group,” and
  - “ensure comparable and consistent treatment across staff in the same career stream across multiple departments.”
- Procedure:
  - All macroeconomist volunteers were ranked within their departments according to their 3-year MAR averages, giving each volunteer a MARs percentile.
  - A uniform MARs percentile cut-off across relevant departments (“the MARs cut-off”) was set so that the number of volunteers above the cut-off equaled the number of A11-A15 macroeconomists for whom the right of refusal needed to be exercised. (Staff Bulletin No. 08/03, Supplement 2.)
- MARs percentile cut-offs were set as follows: “12. Taking into account the number and profile of all volunteers, a uniform MARs cut-off percentile will be established across all relevant departments (the ‘MARs cut-off’)…. This cut-off will be set at a level such that the number of volunteers with MARs averages above the cut-off percentile will be equal to the number of A11-A15 macroeconomists for whom the right of refusal will need to be exercised (the ‘MARs cut-off group’).” (Staff Bulletin No. 08/03, Supplement 2.)

### Institutional Panel Assessment Group and safeguards against arbitrariness
- Mechanism to address margins and atypical cases allowed departments or individuals to present evidence to the Institutional Panel that a volunteer’s MARs percentile did not reflect relative competency:
  - (a) volunteers whose MARs averages place them in the bottom 10-20 percent of the MARs cut-off group, and a group of staff equal in number to 10-20 percent of the MARs cut-off group whose MARs averages are highest among those below the MARs cut-off (the “Assessment Band”); precise ranges account for MARs distribution and “bunching.” 
  - (b) all volunteers within the Macroeconomist Group who do not have a MARs average.
  - (c) any volunteers above the Assessment Band whom the relevant Department Director or the Institutional Panel (in consultation with the Director and considering views under paragraph 22) represents should be included in the Institutional Panel Assessment Group on grounds their MARs percentile does not reflect relative competence; such representations must be exceptional and supported by a detailed written explanation.
- Tribunal found this procedure “adequately met any need for staff claims that the application of MARs percentiles in their particular cases required adjustment.”

### Applicant’s challenge to Institutional Panel’s application of MARs
- Key legal and factual questions raised:
  - Did the Institutional Panel act consistently with its mandate under governing regulations?
  - Did regulations or general principles require an individualized assessment beyond application of the MARs cut-off for Applicant’s “relative competency”?
  - Did the use of the 3-year MARs average and percentile provide a reasonable basis for assessing relative competency for the Fund’s right of refusal?
- Applicant’s contentions:
  - Fund could only deny an application “because of either budgetary constraints or the business needs of the institution.”
  - Meeting “business needs” required an individual analysis of Applicant’s performance and correct MAR application to determine his placement among three groups of “relative competency” per Staff Bulletin 08/03, Supplement 2.
  - Denial of his application was erroneous and not based on the Fund’s stated “business needs.”
  - Staff were not required to present individual submissions to the Panel to have requests granted or properly considered; Applicant did not make a submission to the IP and thus was included in the group recommended for refusal per Staff Bulletin framework.
- Tribunal’s analysis:
  - Paragraph 17 “additional criteria” applied only when assessing volunteers placed in the Institutional Panel Assessment Group under paragraph 16; there was no requirement that IP examine “additional criteria” in deciding which volunteers should be individually assessed.
  - Paragraph 13(c) governed inclusion in the Assessment Group and required exceptional, detailed written representations by Department Directors; Applicant did not present such cause or evidence to the Panel.
  - The initial Staff Bulletin’s language that the Institutional Panel “will meet with relevant Department Directors to make recommendations … as to which volunteers should be refused” could be interpreted to suggest individualized assessment, but the significant over-subscription of A11-A15 macroeconomists provided a reasonable basis for a method relying in part on automatic cut-offs.
  - Because the Fund has discretion to amend non-fundamental conditions of employment, Supplement 2’s additional requirements did not contravene the initial Staff Bulletin’s mandate to make decisions in accordance with business needs and budgetary constraints.
  - The fact that some accepted volunteers may have similar or higher MARs averages than Applicant does not demonstrate error: pure comparison of MARs between different volunteers “was not relevant to, or dispositive of, the issue of acceptance/refusal.”
  - For job groups in multiple departments, features were introduced to account for inter-departmental discrepancies in MARs use and relative staff strength; MARs averages above or below the uniform percentile cut-off in different departments were not identical.

*International Monetary Fund Institutional Tribunal excerpt (discussion of Staff Bulletin No. 08/03, Supplement 2, MARs procedure, and related jurisprudence).*

### 95.      The Tribunal observes that the record indicates that Mr. Faulkner-MacDonagh was

### The Tribunal observes that the record indicates that Mr. Faulkner-MacDonagh was

### MARs percentile and automatic refusal
- Applicant was notified that his MARs average placed him in the 30th percentile of macroeconomists in his department.
- The Fund’s pleadings described Applicant’s MARs average as “reflected a high 3-year average MARs relative to those in his peer group in [his department],” which the Tribunal notes appears inconsistent with a 30th percentile ranking.
- The Tribunal accepted the documentary evidence that the 30th percentile placed Applicant above the cut-off for automatic refusal under the downsizing exercise.

### Institutional Panel assessments and Annex III
- Annex III of the Report of the Institutional Panel (redacted) is titled “Volunteers Not Individually Assessed by the Institutional Panel (Automatically Accepted/Refused).”
- For “Macroeconomists (A11-A15)” the Annex notes: submissions were reviewed by the Panel and “in one instance, a staff member was moved to the assessment band, in consultation with the department.”
- The Annex indicates 26 automatic acceptances and 50 automatic refusals among the Grade A11-A15 macroeconomist volunteers.
- Applicant’s name (with department, job title and grade) is listed in the automatic refusal section.
- An additional note states the total number of A11-A15 economist volunteers not individually assessed by the Institutional Panel was 76.
- Annex III also indicates that in all job categories the total number of automatic acceptances was 72 and the total number of automatic refusals was 50, resulting in 122 volunteers not individually assessed by the Institutional Panel.

### Applicant’s failure to contest MARs calculations or seek reassessment
- Documentary evidence confirms Applicant’s request was not individually assessed by the Institutional Panel and was automatically refused based on MARs percentile.
- Applicant did not raise with the Institutional Panel any ground challenging the validity of the MARs formula for assessing “relative competency” of A11-A15 fungible macroeconomists.
- Applicant did not argue before the Tribunal that his three-year MARs average did not reflect his relative competency.
- Applicant did not alert Human Resources that there might be any inaccuracy in the calculation of his three-year MARs average, pursuant to Supplement 1 of Staff Bulletin No. 08/03, during the voluntary window.

### Staff Bulletin guidance and timelines
- Supplement 1 (March 21, 2008) of Staff Bulletin No. 08/03 advised: “Great care has been taken to ensure that individual MARs calculations for staff have been performed in accordance with the methodology set out in Staff Bulletin 08/03. Staff are encouraged to carefully review the information they were provided concerning their three-year MARs averages. If you have any concerns about the calculation of your MARs average following this methodology, you should contact HRD through your Senior Personnel Manger no later than March 31, 2008.”

### Tribunal’s view on application of MARs and Fund communications
- The Fund refused Applicant’s request by automatically applying the MARs cut-off as set out in Supplement 2 of the Staff Bulletin.
- The Tribunal held it was not an abuse of discretion for the Fund to apply MARs calculations as a Fund-wide indicator of relative competency to decide Applicant’s request and that the Fund was not bound to give Applicant more individualized consideration.
- The Tribunal found the Fund’s communication refusing Applicant’s request to be “cryptic and unrevealing” and stated it would have been preferable for the Fund to explain that his MARs percentile placed him in the category for automatic refusal.
- The Fund’s failure to provide a fuller explanation was not a ground for a successful complaint before the Tribunal.

### Estoppel and alleged misleading statements about prospects of grant
- Applicant claimed estoppel on the basis that the Deputy Director told staff (in a meeting and individually) that all departmental requests for separation under the downsizing would be granted.
- The Fund argued such statements would contradict the clear reservation of the right of refusal set out in the Staff Bulletin and that Applicant’s asserted reliance was not credible.
- The Tribunal observed that encouragement to use voluntary incentives existed to avoid mandatory separations and many requests were made near the close of the voluntary window.
- The Tribunal concluded there was no persuasive ground for a finding of estoppel in favor of Applicant because staff acted with knowledge that the Fund expressly reserved the right to refuse separation.

### Budgetary decisions, restructuring budget, and effect on acceptances
- Applicant contended the Fund’s budgetary decisions improperly limited the total number of staff able to separate under the downsizing, thereby substantially affecting his outcome.
- Applicant argued the Fund had obligated itself to accept the maximum number of volunteers and that restructuring budget implementation prevented accepting volunteers “to the maximum extent possible” (Staff Bulletin No. 08/03).
- The Fund maintained there was nothing improper in the budgetary treatment of the downsizing.
- The Tribunal held the Fund was entitled, in the exercise of managerial discretion, to decide which charges were allocated to the restructuring budget.
- The Tribunal accepted that the restructuring budget’s preeminent objective was to accomplish the restructuring strategy, not to accept the maximum number of volunteers as an end in itself.
- The Tribunal stated that even if resources remained in the restructuring budget at the conclusion of the exercise (which will not be until the end of FY 2011), that would not give Applicant or any other refused volunteer a legal right to require that the full amount be spent on additional acceptances.

### Decision
- The Administrative Tribunal of the International Monetary Fund unanimously decides that:
  - The Application of Mr. Faulkner-MacDonagh is denied.
- Signatories:
  - Stephen M. Schwebel, President
  - Nisuke Ando, Judge
  - Michel Gentot, Judge
  - Celia Goldman, Registrar
- Decision location and date: Washington, D.C., February 9, 2010.

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_Source: https://www.imf.org/-/media/files/imfat/j2010-2.pdf_