## JUDGMENT No. 2012-2 — Introduction

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### Tribunal composition and procedure
- Panel: Judge Catherine M. O‘Regan, President; Judges Edith Brown Weiss and Francisco Orrego Vicuña.  
- Applicant: Mr. S. Negrete (self-represented).  
- Respondent: International Monetary Fund, represented by Ms. Diana Benoit, Senior Counsel, IMF Legal Department.  
- Application filed: June 6, 2011; transmitted to Respondent on June 13, 2011.  
- Procedural filings: Answer (July 28, 2011); Reply (August 31, 2011); Rejoinder (October 6, 2011).  
- Tribunal adjudged the Application on March 7 and September 10 and 11, 2012.  
- Oral proceedings before the Tribunal were not held; the Tribunal considered the transcript of the Fund‘s Grievance Committee proceedings as part of the record.  
- Requests for anonymity of other persons were made pursuant to Rule XXII; the Tribunal determined it will not name persons other than the Applicant.

### Subject of the dispute and relief sought
- Subject: refusal by the Fund of Applicant‘s request for voluntary separation under the Fund‘s 2008 downsizing exercise.  
- Relief sought: the value of the separation package Applicant would have received had his request been accepted (Applicant sought six months‘ salary as the separation package).

### Applicant’s principal contentions
- Department and Institutional Panel (IP) violated rules governing the downsizing exercise (Staff Bulletin No. 08/03 and its Annexes and Supplements), resulting in abuse of discretion by Fund Management in refusing his request.  
- Specific allegations against the Department:
  - (a) failed to recommend the “necessary number” of volunteers for refusal and recommended for acceptance one more volunteer than permitted from Applicant‘s intradepartmental fungible group;  
  - (b) referred to the IP the requests of all of its Grade A9-A15 volunteers rather than only those it recommended for refusal.  
- Specific allegations against the IP:
  - exceeded authority by reviewing all requests and reversing the Department‘s recommendation that Applicant‘s request be accepted;  
  - improperly assessed Applicant‘s “relative competency” vis-à-vis volunteers Fund-wide rather than only against volunteers from Applicant‘s fungible group;  
  - abused discretion by not consulting Applicant‘s Department in formulating a “conditional list” of additional volunteers Fund-wide recommended for acceptance if budgetary resources permitted.

### Respondent’s principal contentions
- The Fund maintained Applicant did not demonstrate an abuse of discretion.  
- The Fund conceded the Department erred in recommending one more acceptance than permitted but contended:
  - the IP corrected any Departmental error by conferring with the Department to seek a basis to distinguish Applicant from another staff member in the group;  
  - the IP concluded available documentation did not provide a reasonable basis for acceptance of Applicant‘s request;  
  - the IP properly assessed facts and applied the rules and principles governing the exercise of the right of refusal.

### Factual background — key facts and timeline
- Applicant appointed on a fixed-term appointment effective March 22, 2007.  
- Applicant submitted a request for voluntary separation on April 15, 2008, serving in a Grade A12 position in a functional and special services department.  
- Fund downsizing exercise initiated in early 2008; volunteer window: March 1-April 21, 2008.  
- Some 492 volunteers separated under the beneficial terms of the downsizing exercise.  
- Applicant was one of 99 staff members whose requests were denied as a result of the Fund‘s exercise of the right of refusal.  
- Applicant was notified by email on May 21, 2008 that his application had been declined.  
- Applicant continued to serve until resignation effective July 10, 2009.  
- Applicant filed a Grievance on December 12, 2008; Grievance Committee recommended denial on January 19, 2011; Fund Management accepted that recommendation and Applicant filed his Application with the Administrative Tribunal on June 6, 2011.

### Legal and institutional framework governing the downsizing
- Core governing document: Staff Bulletin No. 08/03 (Refocusing and Modernizing the Fund: The Framework for the Downsizing Exercise) (February 29, 2008), together with Annexes and Supplements.  
- Staff Bulletin No. 08/03 expressly reserved the Fund‘s right to refuse volunteers “because of either budgetary constraints or the business needs of the institution.”  
- Institutional Panel (IP) role (Annex I and Supplement 2): ensure separations among fungible staff are made reasonably, consistently and non‑discriminatorily and involve institution‑wide competency assessments where applicable; when assessment of relative competency required, the IP was to make recommendations to the Managing Director.  
- Supplement 2 (May 6, 2008) specifics:
  - Executive Board provided $185 million as a multi-year restructuring budget targeting a reduction of 380 budgeted staff positions; after reviewing volunteers (overall number 591 staff), accepting all applications would exceed the restructuring budget by $45---50 million.  
  - Budget accommodation threshold for additional A9-A15 volunteers: 30 percent more than the required reductions at the A9-A15 level; therefore A9-A15 volunteers above this threshold would need to be refused.  
  - Primary criterion for selecting volunteers for refusal: “relative competency, with the objective of enabling the Fund to retain the most qualified staff with[in] each of the fungible groups.”  
  - Procedure for exercising the right of refusal varies by fungible-group type: (a) large group fungible across departments; (b) small group fungible across departments; (c) fungible group within a single department.

### Notable numeric and temporal particulars preserved from the record
- Tribunal meetings: March 7 and September 10 and 11, 2012.  
- Application filed: June 6, 2011; transmittal: June 13, 2011.  
- Procedural filings: Answer (July 28, 2011); Reply (August 31, 2011); Rejoinder (October 6, 2011).  
- Volunteer window: March 1-April 21, 2008.  
- Volunteers separated under the downsizing exercise: 492.  
- Number of staff whose requests were denied via the right of refusal: 99.  
- Governing Staff Bulletin: No. 08/03 (February 29, 2008).  
- Supplement governing right of refusal: Staff Bulletin No. 08/03, Supplement 2 (May 6, 2008).  
- Executive Board restructuring budget: $185 million targeting reduction of 380 budgeted staff positions; accepting all volunteers (overall number 591 staff) would exceed the restructuring budget by $45---50 million.  
- OBP-prescribed limits and accommodation rules: up to 30 percent above required reductions in applicable groups.

### Institutional Panel procedures and case-specific application
- For fungible groups within a single department (Applicant‘s case):
  - Department Director to assess volunteers and recommend the “necessary number” of volunteers for whom the right of refusal must be exercised based on 3-year MAR average and additional criteria (Supplement 2, paras. 20–21).  
  - The Institutional Panel to confirm the Department‘s recommendation if documentation provides a reasonable basis, taking into account written views by affected staff (Supplement 2, para. 21).  
- Applicant‘s Department:
  - Four intradepartmental groups identified; Groups 2 (Grade A11–A15) and 3 (Grade A9/A10) subject to possible refusal.  
  - Maximum number of requests for separation that could be accepted in each of Groups 2 and 3: three.  
  - Department received six requests in Group 2; recommended four for acceptance (including Applicant) — one more than the OBP-prescribed limit.  
  - Department received three requests in Group 3; recommended two for acceptance.  
  - Department worksheet rated Applicant: “mixed performance since joining, with stronger performance since January 2008”; rated “Low” for extent skills would be costly to replace; rated “Medium” for potential; overall departmental recommendation: “Low.”  
  - The completed worksheet was the only written submission by the Department regarding Applicant; Applicant did not submit written views to the Panel under Supplement 2, para. 22.

### Institutional Panel deliberations and recommendations
- IP met May 9-16, 2008; no written record of deliberations maintained.  
- For the six volunteers in Group 2, the Panel observed two where retention was “obvious,” two where departure “would be appropriate,” and two (including Applicant) “in the middle.”  
- The Panel sought ways to distinguish the two “middle” individuals but found them indistinguishable and “could find no reasonable basis on which to sustain the Department‘s recommendation” that either application be accepted.  
- Confidential Annex II to the IP‘s Report (May 16, 2008) recommended acceptance of two volunteers from Group 2 and three volunteers from Group 3 in Applicant‘s Department; footnote: “IP Recommended one less acceptance than allowed, in consultation with department.”  
- In total, the Panel recommended acceptance of the requests of 153 volunteers in the Grade A9-A15 range, plus an additional thirteen recommended on a conditional basis; Management accepted the Panel‘s recommendations in their entirety.  
- Applicant was among 99 Grade A9-A15 staff members whose requests were refused.

### IP practices at issue
- Departmental failure: Department recommended acceptance of four in Group 2 though OBP-prescribed limit was three — conceded by Respondent and found by the Tribunal to be a failure to recommend the “necessary number” for refusal.  
- Departmental referral: Department completed worksheets for all Grade A9-A15 volunteers; Tribunal found supplying information about all volunteers was not an error.  
- IP overreach: Tribunal found the IP exceeded its confirmation role for single-department fungible groups by undertaking its own assessment after the Department failed to recommend the necessary number for refusal; the IP acted as if performing the broader discretionary assessment reserved for other categories.  
- IP focus misapplied: Tribunal found the IP improperly required a case for acceptance rather than testing whether the Department‘s refusal recommendation should be sustained.  
- Comparative scope misapplied: Tribunal found the IP compared Applicant‘s relative competency Fund-wide rather than limiting comparisons to the intradepartmental fungible group as required.

### Attachment criteria and volunteer opportunity to present views
- Additional criteria considered in assessments included:
  - (i) whether MAR may not be indicative of relative performance;  
  - (ii) number of outstanding ratings from 1998---2007;  
  - (iii) trends in performance since May 1, 2007;  
  - (iv) extent staff member has skills/experience required for the future that would be costly or difficult to replace;  
  - (v) length of time in grade;  
  - (vi) staff member‘s potential for growth and related competencies (learning agility, ability to resolve differences, operate at strategic/tactical levels, respect of peers, behaviors of inclusion, etc.).  
- Volunteers could present views in writing to the IP on why their 3-year MAR average was not reflective of relative competency; such views had to be received by 5:00 p.m., Monday May 12, 2008.

### Tribunal findings on breaches of the governing framework
- The Tribunal concluded the Fund failed to follow Staff Bulletin No. 08/03 and associated Annexes/Supplements in key respects:
  - (i) the Department failed to recommend for refusal the “necessary number” of volunteers from Applicant’s intradepartmental fungible group;  
  - (ii) the IP failed to require the Department to revise its recommendation consistent with prescribed numbers and instead undertook its own assessment;  
  - (iii) the IP mischaracterized its role by considering whether the case for acceptance of Applicant’s request was substantiated rather than whether grounds for refusal were substantiated;  
  - (iv) the IP considered Applicant‘s “relative competency” vis-à-vis volunteers outside his fungible group, contrary to the governing framework.  
- The Tribunal emphasized the IP‘s discretion was limited by Terms of Reference requiring application of criteria and process in the Staff Bulletin.

### Remedies framework and precedents considered
- Statute, Article XIV, Section 1: where an application is well-founded, the Tribunal “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.”  
- Standard: discretionary managerial decisions may 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.  
- Tribunal precedents (Ms. “C”, Mr. “F”, Sachdev) demonstrate the Tribunal may award monetary compensation for procedural failures without rescinding the principal managerial decision where rescission threshold is not met.

### Tribunal’s remedial conclusion in Mr. Negrete’s case
- Threshold for rescission: not met. The Tribunal found procedural failures but concluded they were not sufficiently grave to rescind the Fund‘s decision to refuse Applicant‘s request for voluntary separation.  
- Monetary compensation: the Tribunal assessed compensation for intangible injury caused by the Fund‘s failure to consider Applicant‘s request fully in accordance with prescribed rules.  
- Award: Mr. Negrete awarded the sum of $30,000.  
- Decision (unanimous):
  1. The Fund‘s decision to refuse Mr. Negrete‘s request for voluntary separation under the 2008 downsizing exercise is not rescinded.  
  2. Mr. Negrete is entitled to compensation for the Fund‘s failure to consider his request in full compliance with governing rules.  
  3. For the Fund‘s non-compliance with the governing rules, Mr. Negrete is awarded the sum of $30,000.  
- Signatories and date: Catherine M. O‘Regan, President; Edith Brown Weiss, Judge; Francisco Orrego Vicuña, Judge. Decision issued Washington, D.C. September 11, 2012.

*Administrative Tribunal of the International Monetary Fund — JUDGMENT No. 2012-2 (Introduction).*

### Introduction ....................................................................................................1

### JUDGMENT No. 2012-2 — Introduction

### Tribunal composition and procedure
- The Administrative Tribunal adjudged the Application on March 7 and September 10 and 11, 2012.  
- The panel for this case: Judge Catherine M. O‘Regan, President, and Judges Edith Brown Weiss and Francisco Orrego Vicuña.  
- Applicant: Mr. S. Negrete (self-represented).  
- Respondent: International Monetary Fund, represented by Ms. Diana Benoit, Senior Counsel, IMF Legal Department.  
- Application filed with the Tribunal on June 6, 2011; transmitted to Respondent on June 13, 2011.  
- Respondent filed its Answer on July 28, 2011; Applicant filed a Reply on August 31, 2011; Respondent filed a Rejoinder on October 6, 2011.  
- The Registrar circulated a notice within the Fund pursuant to Rule IV, para. (f).  
- Requests for anonymity of other persons were made pursuant to Rule XXII; the Tribunal determined that, in accordance with its practice, it will not name persons other than the Applicant.  
- Oral proceedings before the Tribunal were not held; the Tribunal considered the transcript of the Fund‘s Grievance Committee proceedings as part of the record.

### Subject of the dispute
- Applicant contests the Fund‘s decision to refuse his request for voluntary separation under the terms of the Fund‘s 2008 downsizing exercise.  
- Relief sought: the value of the separation package Applicant would have received had his request been accepted.

### Applicant’s principal contentions (as pleaded)
- Applicant alleges that both his Department and the Institutional Panel (IP) violated the rules governing the downsizing exercise (Staff Bulletin No. 08/03 and its Annexes and Supplements), resulting in an abuse of discretion by Fund Management in refusing his request.  
- Specific allegations against the Department:
  - (a) It failed to recommend the “necessary number” of volunteers for refusal and instead recommended for acceptance one more volunteer than the number permitted from Applicant‘s intradepartmental fungible group.  
  - (b) It referred to the IP the requests of all of its Grade A9-A15 volunteers, rather than only those requests that it recommended for refusal.  
- Specific allegations against the IP:
  - The IP exceeded its authority by reviewing all requests and reversing the Department‘s recommendation that Applicant‘s request be accepted.  
  - The IP improperly assessed Applicant‘s “relative competency” vis-à-vis volunteers Fund-wide rather than only against volunteers from Applicant‘s fungible group.  
  - The IP abused its discretion by not consulting Applicant‘s Department in formulating a “conditional list” of additional volunteers Fund-wide recommended for acceptance if budgetary resources permitted.  
- Applicant contends that each alleged violation, alone or together, resulted in the improper denial of his request.

### Respondent’s principal contentions (as pleaded)
- The Fund maintains Applicant has not demonstrated an abuse of discretion in refusing his request under the downsizing framework.  
- The Fund concedes error by Applicant‘s Department in recommending for acceptance a greater number of volunteers than the number permitted from Applicant‘s intradepartmental fungible group, but contends:
  - The IP corrected any Departmental error by conferring with the Department to seek a basis to distinguish Applicant‘s request from that of another staff member in Applicant‘s group who was also recommended for acceptance.  
  - The IP concluded that the available documentation did not provide a reasonable basis for acceptance of Applicant‘s request.  
  - The IP properly assessed the facts and applied the rules and principles governing the exercise of the right of refusal.

### Factual background — key facts and timeline
- Applicant appointed on a fixed-term appointment effective March 22, 2007.  
- Applicant submitted a request for voluntary separation on April 15, 2008, while serving in a Grade A12 position in a functional and special services department.  
- The Fund initiated a downsizing exercise in early 2008 to reduce expenditures and refocus the organization; the exercise was unprecedented in the Fund.  
- Volunteer window for the downsizing exercise: March 1-April 21, 2008.  
- Some 492 volunteers separated under the beneficial terms of the downsizing exercise.  
- Applicant was one of 99 staff members whose requests were denied as a result of the Fund‘s exercise of the right of refusal.

### Legal and institutional framework governing the downsizing
- Core governing document: Staff Bulletin No. 08/03 (Refocusing and Modernizing the Fund: The Framework for the Downsizing Exercise) (February 29, 2008), together with Annexes and Supplements.  
- Staff Bulletin No. 08/03 expressly reserved the Fund‘s right to refuse volunteers “because of either budgetary constraints or the business needs of the institution.”  
- The Institutional Panel (IP):
  - Announced in Staff Bulletin No. 08/03; role to ensure separations among fungible staff are made reasonably, consistently and non‑discriminatorily and involve institution‑wide competency assessments.  
  - When the right of refusal required an assessment of relative competency, the IP was to make recommendations to the Managing Director regarding staff subject to refusal.  
  - The IP was to apply the criteria and process set forth in the Bulletin; it could prescribe procedures for information provision and timetables; decisions to be made by consensus where possible, otherwise by majority with dissents reported to management.
- Application of the right of refusal in 2008:
  - After the volunteer window closed, the program was oversubscribed; for Grade A1-A8 and B-level staff, all volunteers were accepted.  
  - For Grade A9-A15 volunteers, requests exceeded targeted cuts and the Fund exercised its right of refusal.  
  - Staff Bulletin No. 08/03, Supplement 2 (Framework for the Fund‘s Exercise of the Right of Refusal in Voluntary Separations) (May 6, 2008) provided 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, para. 6.)  
  - Supplement 2 identified the primary criterion for selecting volunteers for refusal as “relative competency, with the objective of enabling the Fund to retain the most qualified staff with[in] each of the fungible groups.” (Id., para. 9.)  
  - Procedures for exercising the right of refusal were to vary depending on whether the volunteer belonged to: (a) a large group fungible across departments (e.g., macroeconomists); (b) a small group fungible across departments (e.g., Office Managers); or (c) a fungible group within a single department (e.g., Applicant‘s group). (Supplement 2, para. 10.)

### Notable numeric and temporal particulars preserved from the record
- Tribunal meetings: March 7 and September 10 and 11, 2012.  
- Application filed: June 6, 2011; transmittal: June 13, 2011.  
- Procedural filings: Answer (July 28, 2011); Reply (August 31, 2011); Rejoinder (October 6, 2011).  
- Volunteer window: March 1-April 21, 2008.  
- Volunteers separated under the downsizing exercise: 492.  
- Number of staff whose requests were denied via the right of refusal: 99.  
- Governing Staff Bulletin: No. 08/03 (February 29, 2008).  
- Supplement governing right of refusal: Staff Bulletin No. 08/03, Supplement 2 (May 6, 2008).  
- Budget accommodation threshold for additional A9-A15 volunteers: 30 percent more than the required reductions at the A9-A15 level.

*Administrative Tribunal of the International Monetary Fund — JUDGMENT No. 2012-2 (Introduction).*

### 14. All volunteers whose MARs fall below the Assessment Band

### 14. All volunteers whose MARs fall below the Assessment Band shall be notified that their application for separation under the voluntary separation framework has been accepted

### Framework and automatic outcomes
- All volunteers whose MARs fall below the Assessment Band: accepted for voluntary separation.
- 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 paragraph 13(c): notified that the Fund will exercise the right of refusal with respect to them.

### Institutional Panel Assessment Group — composition (Staff Bulletin No. 08/03, paras. 13-15)
- The Institutional Panel Assessment Group within the Macroeconomist Group will include:
  - (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 the highest among those below the MARs cut off (the "Assessment Band"). The precise ranges will take into account the distribution among the MARs (including the "bunching" among MARs).
  - (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 taking into account the views expressed by staff under paragraph 22) represents should be included on the grounds that their MARs percentile does not reflect their relative competence. Such representations by Department Directors should be made on an exceptional basis and must be supported by a detailed written explanation.

### Assessment process for Institutional Panel Assessment Group (paras. 16-17)
- The Institutional Panel, together with relevant Department Directors, will assess volunteers in the Institutional Panel Assessment Group to identify those volunteers who, together with those refused under paragraph 15, constitute a group containing the most competent volunteers within the Macroeconomist Group of size equal to the number of volunteers for whom the right of refusal must be exercised.
- The Institutional Panel will recommend 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 assessments, consideration will be given to the additional criteria set forth in the attachment, applied by Department Directors in a standardized form and provided to the Institutional Panel in advance.

### Small fungible groups spanning more than one department (Supplement 2, paras. 18-19)
- All relevant Department Directors will meet to assess volunteers within each small fungible group to recommend to the Institutional Panel the necessary number of volunteers in that group with respect to whom the right of refusal must be exercised. This assessment will be based on:
  - (a) a staff member‘s track record of performance, as indicated in his/her 3-year MAR average; and
  - (b) the additional criteria set forth in the attachment.
- Department Directors will seek consensus on the recommendation. If consensus is reached, the Institutional Panel will confirm the recommendation if it determines the documentation provides a reasonable basis. If no consensus is reached, the Institutional Panel will make a recommendation on the basis of all relevant factors, including the varying views of the relevant Directors and the views expressed in writing by affected staff under paragraph 22.

### Fungible groups within a single department — procedure (paras. 20-21)
- The relevant Department Director will assess volunteers within the fungible group and recommend to the Institutional Panel the necessary number of volunteers in that group for whom the right of refusal must be exercised, based on:
  - (a) the staff member‘s track record of performance, as indicated in his/her 3-year MAR average; and
  - (b) the additional criteria set forth in the attachment.
- The Institutional Panel will confirm the Department Director‘s recommendation if it determines the documentation provides a reasonable basis, taking into account views expressed in writing by the affected staff as provided in paragraph 22.

### Additional criteria applied in assessments (Attachment)
- (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; assessment of 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 for volunteers to present views (Supplement 2, para. 22)
- Volunteers may present views in writing to the Institutional Panel as to why their 3-year MARs average is not reflective of their relative competency, including taking into account feedback from supervisors.
- Such views must be received by 5:00 p.m., Monday May 12, 2008 to be taken into account by the Panel.

### Identification of intradepartmental fungible groups and allocation of cuts (paras. 27-29)
- Staff Bulletin No. 08/03, Supplement 1 (The Framework for the Downsizing Exercise: Supplement) (March 21, 2008), pp. 5-7, listed Fungible Categories of Staff within Single Departments or Offices; intradepartmental fungible groups were established by HRD in consultation with departments prior to the voluntary phase.
- In Applicant‘s Department:
  - Four groups identified: Group 1 comprised B-level staff and Group 4 comprised staff below Grade A9.
  - Groups 2 (Grade A11–A15 staff) and 3 (Grade A9/A10 staff) were subject to possible refusal.
  - The Department sought unsuccessfully to renegotiate groupings so that Groups 2 and 3 would be combined.
- The Fund‘s Office of Budget and Planning (OBP) prescribed numbers of staff positions to be cut within each intradepartmental fungible group. Supplement 2, para. 7 noted differential reductions across the A9-A15 grade group reflecting organizational restructuring and refocusing of activities.
- Departments were initially given the number of targeted cuts applicable whether the exercise became mandatory or a right of refusal exercise. Departments were later told for the right of refusal that they could accept up to 30 percent over for each group.

### Department worksheets and Institutional Panel procedures (paras. 30-36)
- Departments completed a worksheet with information about each individual who applied to leave, rating as "High," "Medium," or "Low" the degree to which the staff member should be retained by the Fund; a final column reserved for the Institutional Panel Recommendation to "Retain/not Retain."
- The Institutional Panel met during the period May 9-16, 2008 to make recommendations to Fund Management on exercise of the right of refusal. No written record was maintained of the Panel‘s proceedings.

### Case specifics — Applicant‘s Department and Applicant (paras. 31-44)
- Maximum number of requests for separation that could be accepted in each of Groups 2 and 3 in Applicant‘s Department: three.
- Applicant‘s Department received:
  - three requests for separation from volunteers in Group 3 (Grade A9/A10); Department recommended two for acceptance.
  - six requests in Group 2 (Grade A11-A15); Department recommended four for acceptance, including Applicant.
- Department‘s written assessment of Applicant:
  - "Performance Since May 1, 2007": "mixed performance since joining, with stronger performance since January 2008."
  - "Skills/Experience Required for Future": "Economist skills, excellent writing skills, knowledge of Fund policies, ability to transform complex policy positions and research into understandable communications; diplomatic and organizational skills to interact with key constituencies."
  - Rated "Low" for "extent to which [his] skills would be costly or difficult to replace."
  - Rated "Medium" for "potential for future growth."
  - Overall "Departmental recommendation of degree to which staff member should be retained by the Fund": "Low."
- The completed worksheet was the only written submission by Applicant‘s Department to the Panel regarding Applicant. Applicant did not submit written views to the Panel under Supplement 2, para. 22; he testified he believed a submission unnecessary because his request had been endorsed by his Department.
- Institutional Panel deliberations in Group 2 (six volunteers):
  - The Panel observed two individuals where retention was "obvious," two where departure "would be appropriate," and two (including Applicant) viewed as "in the middle."
  - The Panel sought ways to distinguish the two "middle" individuals but ultimately found them indistinguishable for purposes of the downsizing and "could find no reasonable basis on which to sustain the Department‘s recommendation" that either application be accepted.
- Department proposed combining Groups 2 and 3 to permit distribution of six volunteer slots across both groups; Institutional Panel, after consultation with legal advisor and HRD, concluded it would not be appropriate to change groupings at that stage.
- Department engagement with the Panel:
  - Panel met twice with Department representatives (first with Department Director and SPM; second with SPM alone).
  - Department reportedly presented volunteers "in roughly the order" they saw as most appropriate; testimony varied on whether Applicant was clearly ranked third and a colleague fourth for acceptance. Department representatives did not amend their numerical recommendation (four acceptances in Group 2) to change Applicant‘s standing. SPM recalled being asked to compare Applicant and the other staff member but not to rank them formally.

*IMF Staff Bulletin No. 08/03, Supplement 1 and Supplement 2; Institutional Panel; Fund procedures and related testimony as cited in the record.*

### 45.      The conclusion of the Panel was that ―. . . we didn‘t see a rationale. . . .  We did not sense

### j2012-2 - 45.      The conclusion of the Panel was that ―. . . we didn‘t see a rationale. . . .  We did not sense

### Panel conclusion and comparative assessment
- The Panel concluded that ―. . . we didn‘t see a rationale. . . .  We did not sense a credible distinction between the two individuals.‖ (Tr. I, p. 92.)
- The Panel found that ―[t]he skill areas and the skills were extremely similar. The general assessment of potential for future growth was also quite similar.‖ (Tr. I, p. 93.)
- The IP Chair explained the Panel‘s view of Applicant‘s record: stronger performance since January of 2008 and a ―mixed start, with feedback it would appear that the individual was, in fact, adjusting and starting to come up to the potential which, when you looked at the skills, seemed to the panel to be quite impressive.‖ (Tr. I, p. 94.)
- The Panel perceived that the individual might want to leave but also was someone ―the Fund might well want to keep.‖ (Tr. I, p. 96.)
- The Chair summarized: both individuals had skills the organization needed, were expected to be needed in the future, and were performing at an acceptable level; therefore the Panel could not recommend that both leave. (Tr. I, pp. 105-106.)

### Institutional Panel (IP) mandate, process, and evidence
- The IP treated volunteers in intradepartmental fungible groups individually, considering Department Director recommendations, written documentation, and presentations. (Report and Recommendations of the Institutional Panel on the Exercise of the Right of Refusal, May 16, 2008.)
- The IP required departments to support recommendations with facts and arguments that carry weight relative to arguments from other departments. (Tr. I, p. 174.)
- The IP sought an institution-wide perspective when volunteers in one intradepartmental fungible group were ―so close, in terms of their situation, that it would be hard to pick one and not justify the other.‖ (Tr. I, p. 104.)
- The IP Chair confirmed the Panel compared the two middle staff in Applicant‘s Department with people in other departments and wanted to ensure each department made the case that a separation was in the interest of the Fund. (Tr. I, pp. 206, 208, 105.)

### Conditional list and cross-departmental comparisons
- Near the conclusion of its process, the IP developed a ―conditional list‖ of volunteers to be recommended to Management for acceptance if budgetary resources permitted. (Tr. I, p. 112.)
- The Panel made a conditional recommendation to accept thirteen additional volunteers from across the Fund; twelve of the thirteen were from the ―large fungible group‖ of Grade A11-A15 macroeconomists. (Tr. I, pp. 112-113.)
- The conditional list targeted individuals with significant performance problems and no real future potential; the Panel regarded Applicant and the closely compared staff member as ―on a higher level‖ than those on the conditional list. (Tr. I, pp. 114-115.)

### IP Report, Management decision, and outcome statistics
- On May 16, 2008, the IP issued its Report and Recommendations of the Institutional Panel on the Exercise of the Right of Refusal. (Report and Recommendations of the Institutional Panel on the Exercise of the Right of Refusal, May 16, 2008.)
- Confidential Annex II to the IP‘s Report recommended acceptance of two volunteers from Group 2 and three volunteers from Group 3 in Applicant‘s Department; a footnote stated: ―IP Recommended one less acceptance than allowed, in consultation with department.‖ (Report and Recommendations ... May 16, 2008, Annex II.)
- In total, the Panel recommended acceptance of the requests of 153 volunteers in the Grade A9-A15 range, plus the additional thirteen recommended on a conditional basis. Management accepted the Panel‘s recommendations in their entirety. (Message from the Managing Director [to the staff] on the Completion of the Voluntary Phase, May 19, 2008.)
- Applicant was among 99 Grade A9-A15 staff members whose requests were refused. (May 19, 2008 outcome.)

### Notification, continued service, and separation benefits
- Applicant was notified by email on May 21, 2008 that ―. . . after careful consideration, your application has been declined.‖ (Email from Team Leader, HR Team for Support Departments, May 21, 2008.)
- Applicant continued to serve as a member of the Fund‘s staff until his resignation effective July 10, 2009.
- Because Applicant‘s request for voluntary separation was denied, he did not receive the separation benefits available under the downsizing program.

### Administrative review and grievance process
- GAO No. 31 (Grievance Committee), Rev. 4 (October 1, 2008), Section 6.06 permits filing a grievance with the Committee within six months after a decision taken by the Managing Director or Director of HRD was made or communicated.
- Applicant sought clarification from HRD and his SPM; the SPM initially miscommunicated that the IP had recommended refusal because Applicant held a fixed-term appointment and later testified she had been mistaken. (Tr. II, p. 21.)
- Applicant exchanged emails in June and July 2008 expressing concerns about transparency, equal treatment, and fairness in the process. (Email of July 17, 2008.)
- On July 31, 2008, the HRD Director explained that the Panel‘s decision was based on relative competence considerations and that Applicant‘s and the other staff member‘s ratings for both performance and potential were identical; given that conclusion, both applications had to be refused. (Email from HRD Director to Applicant, July 31, 2008.)
- Applicant filed a Grievance on December 12, 2008; the Grievance Committee recommended denial of the Grievance on January 19, 2011, concluding Applicant had not shown the Fund‘s decision was arbitrary, capricious, discriminatory, or procedurally defective. (Grievance Committee Recommendation and Report, January 19, 2011, pp. 27-37.)
- Fund Management accepted the Grievance Committee‘s recommendation; Applicant received notification on March 7, 2011. (Letter from Special Advisor to Managing Director to Applicant, February 22, 2011, and cover email of March 7, 2011.)
- Mr. Negrete filed his Application with the Administrative Tribunal on June 6, 2011.

### Parties‘ principal contentions (summary)
- Applicant contended: department violated Staff Bulletin No. 08/03 by failing to recommend the ―necessary number‖ of volunteers for refusal; department improperly referred all Grade A9-A15 volunteers to the IP; the IP exceeded its authority by reversing the department‘s recommendation; the IP improperly compared Applicant to volunteers outside his intradepartmental fungible group; the IP failed to consult the Department on the conditional list; and Applicant sought six months‘ salary as the separation package he would have received if accepted.
- Respondent contended: the IP assessed relative competency in accordance with governing rules; the department‘s erroneous recommendation of one more acceptance than permitted did not invalidate the IP‘s recommendation; the IP correctly assessed volunteers recommended for acceptance as well as for refusal; the IP properly took an institution-wide perspective; and the IP had no obligation to consult departments in drawing up the conditional list.

### Relevant Staff Bulletin provisions cited
- Staff Bulletin No. 08/03 (Refocusing and Modernizing the Fund: The Framework for the Downsizing Exercise) (February 29, 2008) set the overall framework for voluntary separations, including:
  - The voluntary window: March 1, 2008 through April 21, 2008.
  - Preferred last day of active duty indicated by staff within a 12-month period between May 14, 2008 and May 13, 2009.
  - Acceptance of volunteers subject to conditions including potential deferral up to one year for business needs, release of claims to date, and possible refusal because of budgetary constraints or business needs.
  - If exercising the right of refusal required assessment of relative competency, the Institutional Panel would meet with Department Directors and make recommendations to Management.

*Report and Recommendations of the Institutional Panel on the Exercise of the Right of Refusal, May 16, 2008; Message from the Managing Director on the Completion of the Voluntary Phase, May 19, 2008; Email from Team Leader, HR Team for Support Departments, May 21, 2008; Email from HRD Director to Applicant, July 31, 2008; Grievance Committee Recommendation and Report, January 19, 2011.*

### ANNEX I

### ANNEX I — COMPOSITION AND TERMS OF REFERENCE OF INSTITUTIONAL PANEL

### Purpose
- The Institutional Panel (“IP”) is established to ensure decisions on separations among broadly fungible staff are made in a reasonable, consistent and non-discriminatory fashion and involve assessments of competency made on an institution-wide basis.
- The IP will review and make recommendations to the Managing Director as to:
  - who among fungible staff will be separated; or
  - who the Fund will exercise the right of refusal against at the end of the voluntary phase, if the Managing Director determines such right of refusal needs to be exercised.

### Composition
- The IP shall consist of six members, including the Chair, all appointed by the Managing Director.
- Members shall be either former staff members or other external appointees with broad knowledge of the institution.
- Additional appointees by the Managing Director:
  - one person proposed by the Diversity Council to advise the IP on diversity issues;
  - one person proposed by the Staff Association Committee, who shall act as an Observer.
- HRD shall serve as secretariat to the Panel; LEG shall provide legal advice.
- The Chair may designate subpanels to advise the Panel.

### Role of the Institutional Panel in Voluntary and Mandatory Separations
- Voluntary Phase:
  - If the Managing Director determines it necessary to exercise the right of refusal under Staff Bulletin 08/03 (the “Bulletin”) and the exercise requires assessment of relative competency among volunteers, the IP shall make recommendations to the Managing Director regarding which staff the Fund should refuse.
- The IP will apply the criteria and follow the process set forth in the Bulletin when carrying out its roles.

### Process and Decisionmaking
- The IP may prescribe procedures to carry out the process, including specifying information to be provided to Panel members and timetables.
- Decisions of the IP will be made, to the extent possible, on the basis of a consensus reached among relevant Department Directors and the IP.
- If no consensus is possible, the IP will decide by a majority of members and will report dissenting views to management.

### Staff Bulletin No. 08/03, Supplement 1 — Intradepartmental Fungibility (March 21, 2008)
- HRD, in consultation with departments and offices, prepared a list of fungible groups that exist entirely within one department and that may be subject to reduction in force.
- For reductions involving staff in one department only:
  - there will be no MARs cut-off or Initial List;
  - the department is expected to use the same information—MARs averages and other appropriate criteria—in deciding which staff in the category to retain or separate;
  - diversity considerations are to be taken into account for those equivalent in relative competence.
- Example Grade Bands listed in fungible groups include A14/A15, A13/A14/A15, A13/A14, A11/A12, A9/A10.

### Staff Bulletin No. 08/03, Supplement 2 — Fund’s Exercise of the Right of Refusal in Voluntary Separations (May 6, 2008)
- Context and budgetary constraints:
  - The Executive Board provided $185 million as a multi-year restructuring budget targeting a reduction of 380 budgeted staff positions.
  - After reviewing volunteers (overall number 591 staff), the Fund determined that accepting all applications would exceed the restructuring budget by $45---50 million.
  - Therefore, the Fund would exercise the right of refusal.
- Budgetary categorization of staff for reduction planning:
  - (i) B1---B5 grades staff;
  - (ii) A9---A15 grades staff;
  - (iii) A1---A8 grades staff.
- Required reductions by category (budget requires):
  - reduction of 19 percent for B1---B5 staff;
  - reduction of 8 percent for A9---A15 staff;
  - reduction of 22 percent for A1---A8 staff.
- Accommodation of excess volunteers:
  - The original targeted reductions may be exceeded by up to 30 percent while remaining within the restructuring budget.
  - All volunteers in the B1---B5 grades (where the excess was 25 percent of the required reductions) will be accepted.
  - All volunteers in the A1---A8 grades (where the excess was 27 percent of the required reductions) will be accepted.
  - For A9---A15 grades, volunteers in excess represent 110 percent of the reductions envisaged in that category; the budget can accommodate additional volunteers up to 30 percent more than required reductions at the A9---A15 level; therefore, A9---A15 volunteers above this threshold will need to be refused.
- Allocation rules for A9---A15 volunteers:
  - For each fungible group where reductions were required, the number of volunteers to be accommodated will normally be no more than 30 percent higher than the reductions required in the relevant groups.
  - In fungible groups where the number of volunteers did not meet the targeted reductions or where the reduction was exceeded by 30 percent or less, all volunteers will be accommodated.
  - For volunteers within groups where no reductions were envisaged, the number accepted will normally not exceed 30 percent of the total number of volunteers in these groups.
- Primary criterion for refusing volunteers:
  - Relative competency, with the objective of retaining the most qualified staff within each fungible group.
- Procedure variance:
  - The procedure for exercising the right of refusal will vary depending on whether the fungible group is (a) a large fungible group, (b) a small fungible group or (c) a fungible group within a single department.

### Tribunal Cases, Issues, and Standard of Review
- Prior Tribunal findings:
  - In Faulkner-MacDonagh and Billmeier, the Tribunal sustained the Fund’s regulatory decision to exercise the right of refusal only as to Grade A9-A15 staff and upheld use of MARs percentiles and MARs cut-offs for large fungible groups; individualized consideration was not required in those cases.
- Distinct issues in the Negrete case:
  - Applicant was a member of a “fungible group within a single department,” raising questions whether:
    - the Department failed to follow regulations by not recommending the “necessary number” of volunteers for refusal and instead recommending acceptance of one more volunteer than permitted from the intradepartmental fungible group;
    - the Department improperly referred all its Grade A9-A15 volunteers to the Panel rather than only those recommended for refusal;
    - the IP improperly conducted its own assessment after the Department failed to recommend the necessary number for refusal and considered whether a case for acceptance had been substantiated;
    - the IP compared Applicant’s relative competency to volunteers outside his fungible group;
    - the IP formulated a “conditional list” of additional volunteers from across the Fund without properly consulting Applicant’s Department.
- Standard of review applied by the Tribunal:
  - Discretionary managerial 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 (Commentary on the Statute, p. 19).
  - The abuse of discretion standard is flexible and the degree of deference may vary depending on the nature of the decision, the grounds contested, and the authority/expertise vested in the decision maker.
  - A higher degree of scrutiny applies when fundamental human rights are implicated or when involuntary separation is challenged, compared with refusal of enhanced voluntary separation benefits.
- Core legal question framed:
  - Did the Fund abuse its discretion in refusing Applicant’s request for voluntary separation under the 2008 downsizing program, and did Applicant’s Department and the Institutional Panel carry out their responsibilities consistently with the rules governing the Fund’s exercise of its right of refusal?

*Source: Staff Bulletin No. 08/03 and Supplements; Annex I — Composition and Terms of Reference of Institutional Panel, IMF.*

### 80.      It is recalled that the regulations governing the exercise of the right of refusal in

### Right of refusal regulations and their application in Applicant’s case (Staff Bulletin No. 08/03, Supplement 2)

### Regulatory framework for fungible groups within a single department
- Supplement 2, para. 20: "The relevant Department Director will assess the volunteers within the fungible group for purposes of recommending to the Institutional Panel the necessary number of volunteers in that group with respect to whom the right of refusal must be exercised. This assessment will be based on: (a) a staff member‘s track record of performance, as indicated in his/her 3-year MAR average and (b) the additional criteria set forth in the attachment."
- Supplement 2, para. 21: "The Institutional Panel will confirm the recommendation made by the Department Director if it determines that the documentation provides a reasonable basis for the recommendation, taking into account the views expressed in writing by the affected staff as provided in paragraph 22 below."
- Worksheet procedure: departments rate each volunteer on a three-tier scale of "High," "Medium" or "Low" for "Departmental recommendation of degree to which staff member should be retained by the Fund." The question of whether to "Retain/not Retain" is reserved for the Institutional Panel Recommendation.

### Department conduct and the initial rule breach
- Department rated four of six volunteers in Applicant‘s fungible group as "Low" on "Departmental recommendation of degree to which staff member should be retained by the Fund," indicating recommendation of acceptance of separation for those four, including Applicant.
- OBP-prescribed limit: the number of volunteers from Group 2 that could be accepted was three; the Department recommended four, i.e., one more than permitted.
- Respondent (the Fund) concedes: the Department "did not recommend the  ̳necessary number‘ for refusal, as departments were supposed to do under Staff Bulletin 08/03."
- Tribunal conclusion: "it was not disputed that the Department failed to recommend for refusal the 'necessary number' of volunteers from Applicant‘s intradepartmental fungible group." The Tribunal views this as "the first of a series of failures of the Fund to follow the governing regulations" in this case.

### Department referral of all Grade A9-A15 volunteer requests
- Department completed the Worksheet to Assess Relative Competence providing information pertaining to all its Grade A9-A15 volunteers.
- Tribunal finding: the Panel itself had set procedures requiring departments to provide information about all volunteers by completing the worksheet; supplying information about all volunteers was not an error.
- Rationale: only by comparing information about all volunteers within a fungible group could the Panel apply the standard of "relative competency" to decide whether to "confirm the recommendation made by the Department Director." (Supplement 2, para. 21)
- Tribunal conclusion: while the Department failed to recommend the "necessary number" for refusal, it did not err in referring to the Panel the requests of all its Grade A9-A15 volunteers.

### Institutional Panel (IP) response and overreach
- Applicant alleges the Department hoped "that the IP would endorse the erroneous submission" and that the IP's interventions "materially affected the outcome" of his voluntary separation request.
- Tribunal distinction:
  - Proper IP role when dealing with "fungible groups within a single department": "confirm" the Department's recommendation based on documentation; assessment was to be performed by the Department (Supplement 2, para. 20).
  - IP exceeded its authority by undertaking its own assessment of Applicant‘s request after the Department failed to recommend the "necessary number" for refusal.
- Tribunal reasoning:
  - The IP’s confirmation responsibility did not extend to re-assessing ab initio the Department‘s recommendations.
  - The IP’s conduct resembled the broader discretionary assessment prescribed for other categories (e.g., Institutional Panel Assessment Group for large fungible groups), not the more limited role described for single-department fungible groups.
  - The IP Chair testified: the Panel "were trying to elicit the information from the department that would allow the panel to make its own assessment," and stated that "the department is not the IMF, and its view is limited to its staff, and it does not have the broader view of the organization."
- Tribunal conclusion: "the IP did not act consistently with the governing regulations when it responded to the Department‘s failure to recommend the 'necessary number' for refusal by undertaking its own assessment of Applicant‘s request."

### Evidence and procedural interactions
- Department representatives disputed the grade-group delineation and sought to override prescribed acceptances, arguing "the grade differentiation didn‘t make any sense for our department."
- IP and Department meetings:
  - IP did not request additional written recommendations beyond the initial submission: "We did not operate on a written basis, beyond the initial submission."
  - Evidence is ambiguous whether the Department at any time clearly asserted a preference between two closely ranked candidates; Department testimony did not confirm that it had re-ordered or revisited its ranking during IP meetings.
  - IP Chair: meetings occurred on a compressed schedule ("meetings started on Friday the 9th, and we completed our report on the 16th"), and the Panel concluded two candidates were "very, very, very similar" after discussions with the Department.
- Tribunal view: the Panel's misapprehension of the reach of its "institution-wide perspective" responsibility (Supplement 2, para. 3) led it to undertake assessments beyond the role specified for single-department fungible groups; a similar misapprehension later led the Panel to compare Applicant‘s "relative competency" against volunteers from across the Fund (addressed separately).

### Tribunal findings and implications
- Finding: Department failed to recommend the "necessary number" of volunteers for refusal, contrary to Staff Bulletin No. 08/03, Supplement 2, para. 20.
- Finding: Department did not err in providing information on all Grade A9-A15 volunteers to the IP via the worksheet.
- Finding: Institutional Panel exceeded its authorized role by conducting its own re-assessment of Applicant‘s request rather than limiting itself to confirming the Department‘s recommendation based on documentation, as prescribed for intra-department fungible groups.
- Implication: The Tribunal considers the Department's initial failure and the Panel's subsequent overreach to be a series of failures by the Fund to follow the governing regulations in considering Applicant's request for voluntary separation under the 2008 Fund-wide downsizing program.

*Source: Tribunal analysis of Staff Bulletin No. 08/03, Supplement 2 and the Institutional Panel proceedings as recounted in the case record.*

### 102.     In applying the rules, the IP failed to adhere to the tripartite structure that had been

### j2012-2 - 102.     In applying the rules, the IP failed to adhere to the tripartite structure that had been

### Failure to adhere to the tripartite structure and procedural roles
- Paragraphs 102–104: The IP failed to observe the distinction between "confirmation" and "assessment" for volunteers from "fungible groups within a single department."
- The Tribunal found that after denying the Department's request to merge Groups 2 and 3, the Panel should have required the Department to revise its recommendations to identify the "necessary number" of volunteers for refusal from Group 2; only then could the IP properly decide whether to "confirm" the Department's recommendation.
- The Tribunal held that Staff Bulletin No. 08/03 and its Annexes and Supplements did not authorize the IP to undertake its own assessment when the Department's recommendation was inconsistent with prescribed numbers; the IP should have required the Department to rank volunteers (Supplement 2, para. 20; Staff Bulletin No. 08/03, Annex I).

### Focus on acceptance versus refusal (standard applied incorrectly)
- Question posed (para. 105): Did the Panel improperly focus on whether a case had been substantiated for acceptance, rather than for refusal, of Applicant's request?
- Applicant's contention (para. 106): The IP "has the mandate to confirm those recommended for refusal, not those for acceptance," and the Department's failure to submit the "necessary number" for refusal led the IP to seek substantiation for acceptance.
- Tribunal's finding (paras. 107–113):
  - The record supports that the IP sought substantiation that Applicant's request should be accepted, not that it should be refused.
  - IP Chair testimony: the Panel judged "whether or not the evidence which we had before us supported a conclusion that [Applicant] . . . should be accepted for departure" (Tr. I, pp. 152-156, 174).
  - The Tribunal observed the Department's duty to recommend the "necessary number" of volunteers "with respect to whom the right of refusal must be exercised" (Supplement 2, para. 20) and the IP's mandate to "make recommendations to the Managing Director regarding the staff with respect to whom the Fund should exercise such right of refusal" (Staff Bulletin No. 08/03, Annex I).
  - Staff Bulletin No. 08/03, p. 2: "[I]t 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."
  - Tribunal conclusion: By requiring that a case be made for acceptance—rather than for refusal—the IP mischaracterized its role for "fungible groups within a single department" and misapplied the regulations.

### Comparative assessment across fungible groups (relative competency)
- Applicant's assertion (para. 114): The IP compared Applicant to volunteers in other Departments, categories, and fungible groups and decided refusal based on that comparison; the governing rules required comparisons of "relative competency" only within the same fungible group.
- Respondent's position (paras. 115–118):
  - Acknowledged principle: where oversubscription existed within a fungible group, decisions were to be based on relative competency within that group.
  - Asserted that it was "entirely proper" for the IP to compare volunteers Fund-wide and that the IP's "institution-wide perspective" informed assessments even for small fungible groups within a single department.
  - Cited Supplement 2, para. 3: the Panel would be ". . . relied upon to ensure that the process is implemented fairly and takes into account an institution-wide perspective regarding relative competency."
- Tribunal analysis and findings (paras. 119–122):
  - The general directive to apply an "institution-wide perspective" was subordinated to the specific language governing "fungible groups within a single department," which limited competency comparisons to volunteers within the same fungible group.
  - IP Terms of Reference (Staff Bulletin No. 08/03, Annex I) initially directed institution-wide competency assessments; Supplement 2, para. 9, then specified that the primary criterion was relative competency "within each of the fungible groups."
  - Despite these rules, the IP compared Applicant with volunteers Fund-wide after denying the Department's request to merge Groups 2 and 3; the IP concluded both individuals had skills the organization needed and declined to recommend their departures based on Fund-wide comparisons (Tr. I, pp. 87, 104–106).
  - Tribunal conclusion: The IP misapprehended its authority by comparing Applicant with volunteers outside his fungible group and thereby effectively merged Group 2 volunteers with volunteers throughout the Fund.

### Tribunal conclusions and procedural implications
- The IP:
  - Failed to adhere to the tripartite structure and the prescribed distinction between departmental "assessment" and IP "confirmation" (paras. 102–104).
  - Misapplied the governing standards by requiring substantiation for acceptance rather than focusing on whether a refusal recommendation should be sustained (paras. 105–113).
  - Misapplied the rules on comparative "relative competency" by using Fund-wide comparisons where comparisons were limited to the volunteer's own fungible group (paras. 114–123).
- The Tribunal emphasized that for "fungible groups within a single department" the department assesses its own volunteers and recommends the "necessary number" for refusal; the IP's role is to confirm (Supplement 2, paras. 20–21; Staff Bulletin No. 08/03, Annex I).

*Judgment of the Tribunal (paras. 102–123).*

### 124.     When the Fund took the decision in early 2008 to downsize its workforce, it determined

### When the Fund took the decision in early 2008 to downsize its workforce, it determined

### Background: design of the 2008 downsizing and fungible groups
- Staff Bulletin No. 08/03 (Annex I) stated the restructuring would “include the need to reduce the number of positions in groups of staff who are considered broadly fungible.”
- Supplement 2, para. 7: reductions would be “differential, reflecting the fact that, under the Fund‘s medium term strategy, the Fund would not only be changing its organizational structure, but would also be refocusing its activities within that modified structure. Accordingly, the Fund determined different levels of reductions of force for each fungible group of staff within the A9-A15 grades.”
- The group-based approach governed whether refusals of voluntary separation would be exercised mandatorily or, if the voluntary phase was oversubscribed, through the right of refusal.

### Tribunal jurisprudence upholding group-based approach
- In Faulkner-MacDonagh and Billmeier the Tribunal addressed complaints that A1-A8 and B-level volunteers were categorically accepted while A9-A15 volunteers faced possible refusal.
- Tribunal reasoning (Faulkner-MacDonagh, para. 81; Billmeier, para. 86):
  - The existence of a rational nexus between policy goals and allocation methods “does not require that there be a perfect fit… and . . . may rest upon generalizations.” (Daseking-Frank et al., para. 52, quoting Ms. “G,” para. 79.)
  - Even if some A1-A8 or B-level volunteers were more “competent” than some A9-A15 volunteers who were refused, that fact alone does not invalidate the exercise.
  - The Fund advanced tenable reasons to retain A9-A15 staff at a greater rate, establishing a rational nexus between the objective and differential allocation of benefits.
- Staff Bulletin No. 08/03 reserved the right to refuse volunteers “in relation to categories of staff,” placing staff on notice that disposition of applications would be influenced by category and volunteer counts (Faulkner-MacDonagh, para. 83; Billmeier, para. 87).

### Tribunal findings in the present case regarding process violations
- The Tribunal concluded the Fund failed to follow Staff Bulletin No. 08/03 and associated Annexes/Supplements in key respects (para. 137):
  - (i) Applicant‘s Department failed to recommend for refusal the “necessary number” of volunteers from Applicant’s intradepartmental fungible group.
  - (ii) The Institutional Panel (IP) failed to require the Department to revise its recommendation consistent with prescribed numbers and instead undertook its own assessment.
  - (iii) The IP mischaracterized its role by considering whether the case for acceptance of Applicant’s request was substantiated rather than whether grounds for refusal were substantiated.
  - (iv) The IP considered Applicant‘s “relative competency” vis-à-vis volunteers outside his fungible group, contrary to the governing framework.
- The Tribunal emphasized that the IP’s discretion was limited by Terms of Reference requiring application of criteria and process in the Staff Bulletin (para. 138).

### Institutional Panel’s actual practice and errors
- It is uncontroverted that the IP assessed Applicant‘s “relative competency” against volunteers outside his fungible group (paras. 129–130).
  - IP Chair admitted comparing Applicant and other intra-department volunteers to people in other departments (Tr. I, pp. 206, 208).
  - The IP thereby acted in contravention of the framework that required comparisons only within the same fungible group (para. 130).
- The IP formulated a “conditional list” of additional volunteers recommended for acceptance if budgetary resources permitted (paras. 131–132):
  - The IP’s conditional recommendation was to accept thirteen additional volunteers, of which twelve were members of the “large fungible group” of Grade A11-A15 macroeconomists (Tr. I, p. 113).
  - The IP admitted it “knew that we were exceeding our mandate by . . . making a recommendation to go beyond the staff bulletin,” and presented the list as conditional to Management (Tr. I, p. 113).
  - Management later accepted that recommendation (Message from the Managing Director on Completion of the Voluntary Phase, May 19, 2008).
- Applicant’s complaint that his Department was not consulted about the “conditional list”:
  - Applicant alleged all Directors should have been apprised and allowed to propose volunteers from their Departments for the conditional list (para. 133).
  - Respondent maintained the IP had no obligation to consult Applicant‘s Department and that Applicant would not have been included because the list targeted staff with performance problems (para. 134).
  - IP Chair testified that neither Applicant nor the comparand “would have fallen into that group” because the conditional list targeted individuals with significant performance problems and no real future potential (Tr. I, pp. 113–115).
  - Tribunal concluded Applicant suffered no harm from lack of consultation about the conditional list because the list was reserved for volunteers with significant performance problems and Applicant was not in that group (para. 136).

### Remedies framework and precedents on procedural defects
- Statute, Article XIV, Section 1: if an application challenging an individual decision is well-founded, the Tribunal “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.” (para. 139)
- The Tribunal’s remedial approach when managerial discretion is challenged:
  - The applicant must show the contested decision was “arbitrary, capricious, discriminatory, improperly motivated, based on an error of law or fact, or carried out in violation of fair and reasonable procedures.” (Commentary on the Statute, p. 19) (para. 140)
  - Even where procedural irregularities exist, the Tribunal has the authority to reject rescission while awarding compensation for procedural failure or partial liability (Ms. “C”, Mr. “F”, Sachdev precedents cited in paras. 140–143).
- Examples from prior cases:
  - Ms. “C”: decision not to convert fixed-term appointment sustained; procedural imperfections led to partial finding against the Fund and monetary compensation (para. 141).
  - Mr. “F”: abolition of post sustained as based on institutional needs; Tribunal awarded compensation for failures regarding religious intolerance and lack of fair and transparent procedures and notice (para. 142).
  - Sachdev: principal decisions (non-selection and abolition) sustained; Tribunal found failures of fair process and breach of rules regarding reassignment assistance and awarded monetary compensation (para. 143).

### Tribunal conclusion on Applicant’s case
- Despite procedural failures identified (paras. 137–138), the Tribunal’s prior jurisprudence informs remedies:
  - The Tribunal may award monetary compensation for procedural irregularity without rescinding the principal decision if the applicant fails to establish abuse of discretion warranting rescission (paras. 140–143).
- The Applicant seeks rescission and the value of the separation package he would have received (six months‘ salary) (para. 139).

*International Monetary Fund — Tribunal findings and remedial framework as summarized from the cited judgment excerpts.*

### 144.     In Ms. “EE”, the Tribunal sustained the decision contested by the applicant to place her

### j2012-2 - 144.     In Ms. “EE”, the Tribunal sustained the decision contested by the applicant to place her

### Background and context
- The Tribunal sustained the decision to place Ms. “EE” on paid administrative leave pending investigation of alleged misconduct.
- The Tribunal concluded that the Fund had, at the time of that decision, "prima facie evidence warranting an ongoing investigation into alleged misconduct by Applicant and a tenable basis to decide that her continued presence in the workplace during the pendency of the misconduct proceedings posed a risk of future harm." Id., para. 141.
- Despite this, the Tribunal found "significant procedural irregularity" in violation of the principle of audi alteram partem because the Fund had failed to seek from Ms. "EE" any account of her version of the facts relevant to the accusations before taking the administrative leave decision. Id., paras. 184-199, 266.

### Tribunal’s analysis of evidentiary basis versus procedural fairness
- The Tribunal answered the applicant’s contention that the administrative leave decision "lacked an adequate evidentiary basis because it was taken in the absence of Applicant‘s 'potential countervailing evidence.'" Id., para. 199, as follows:
  - "The Tribunal has concluded above that the Fund did have prima facie evidence to support an ongoing misconduct investigation. That the Fund failed to interview Applicant about the accusations against her until after taking the decision to place her on paid administrative leave does not negate the evidentiary basis upon which the Fund grounded that decision." Id.
  - "Accordingly, . . . the conclusion that the contested decision was 'carried out in violation of fair and reasonable procedures,' Commentary on the Statute, p. 19, does not provide ground for the Tribunal to overturn the administrative leave decision in this case." Id.
- The Tribunal held that the procedural error "is not sufficient to overturn the contested decision," but "does merit relief in the form of monetary compensation." Id., para. 198.
- The Tribunal explained this reasoning because "(a) the Tribunal has held that the Fund had the requisite prima facie evidence of alleged misconduct to take the administrative leave decision, and (b) Applicant has not challenged the ultimate decision finding that she committed misconduct, a decision taken following a full opportunity for Applicant‘s written and oral response at a later stage of the misconduct proceedings." Ms. “EE”, para. 199.

### Application to the instant case (Mr. Negrete) — rescission threshold and remedy considerations
- The Tribunal considered whether the same approach—awarding compensation for procedural irregularities but not rescinding the decision—should apply to the instant case concerning refusal of voluntary separation under the 2008 downsizing program.
- Both Applicant and Respondent argued the record showed what the outcome would have been absent procedural irregularities, each asserting a different outcome. The Tribunal found the record does not convincingly establish what the outcome would have been absent procedural irregularities.
- The Tribunal found that Applicant identified procedural failures in breach of the Fund‘s rules that "cast doubt on the reliability of the decision-making process."
- On whether the challenged decision must be rescinded, the Tribunal concluded:
  - "The threshold for rescission has not been met in this case."
  - Neither the procedural failures nor the consequence of a possibly mistaken decision is sufficiently grave to warrant rescission.
  - The material consequence of the procedural lapses is limited: Applicant was denied a special separation benefit associated with voluntary separation from employment.
  - There is no indication or allegation that the Fund acted with malice, bad faith or discrimination toward Applicant.
  - The record indicates that the IP acted deliberatively and in what it believed was the best interests of the Fund and its staff.
- The Tribunal noted that "there may be times when a procedural error is so material or malicious as to warrant the rescission of the decision. The Commentary on the Statute, p. 19, envisions this possibility."

### Remedy awarded and decision
- The Tribunal will not rescind the Fund‘s decision refusing voluntary separation and will not compensate Applicant for the material injury claimed in not receiving "a separation payment of six months‘ salary pursuant to the downsizing program."
- The Tribunal will compensate Applicant for the intangible injury incurred by the Fund‘s failure to uphold his legitimate expectation of having his request considered in full accordance with the prescribed rules.
- The Tribunal assessed compensation in the sum of $30,000.
- Decision (unanimous):
  1. The Fund‘s decision to refuse the request of Mr. Negrete for voluntary separation under the beneficial terms of the 2008 Fund-wide downsizing exercise is not rescinded.
  2. Mr. Negrete is entitled to compensation for the Fund‘s failure to consider his request in full compliance with the governing rules.
  3. For the Fund‘s non-compliance with the governing rules, Mr. Negrete is awarded the sum of $30,000.
- Signatories: Catherine M. O‘Regan, President; Edith Brown Weiss, Judge; Francisco Orrego Vicuña, Judge.
- Location and date: Washington, D.C. September 11, 2012.

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_Source: https://www.imf.org/-/media/files/imfat/j2012-2.pdf_