## REGISTRY’S SUMMARY: Mr. “RR”, Applicant v. International Monetary Fund, Respondent, IMFAT Judgment No. 2021-2 (December 24, 2021)

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### Case background
- Applicant challenged two decisions by the Fund:
  - Non-conversion of his fixed-term appointment (Grade A15) to an open-ended appointment.
  - Non-selection for a vacancy to a similar but lower-graded position (Grade A13/A14) to which he applied after non-conversion.
- For conversion of a fixed-term appointment at Grade A15, Fund Management decides only after the staff member’s department recommends conversion and the Review Committee (RC) endorses it. The RC is comprised of Grade B4 managers chaired by the HRD Director and advises the Managing Director on managerial appointments, conversions and promotions at Grades A15-B2 following due diligence review.
- This was the first Tribunal case in which the department recommended conversion, the RC endorsed conversion, and the Deputy Managing Director/Chief Administrative Officer (DMD/CAO) nonetheless declined to follow the RC’s advice.

### Legal framework and conversion criteria
- Fund internal law (GAO No. 3, Rev. 7, Section 3.02.1.3.) sets three criteria for conversion:
  - whether the staff member meets the Fund’s performance requirements;
  - whether the staff member has demonstrated potential for a career at the Fund; and
  - whether the appointment meets the Fund’s staffing requirements.
- The Tribunal reviewed whether the DMD/CAO’s decision rejecting the RC’s recommendation constituted an abuse of discretion.

### Tribunal findings on the non-conversion decision
- Incoherent and shifting reasons:
  - The record showed inconsistent communications from the DMD/CAO: one communication cited lack of business need; another cited that Applicant had “not sufficiently demonstrated his leadership potential in driving innovation and strategic changes.”
  - The DMD/CAO’s Grievance Committee testimony referred to both possible bases.
- On lack of business need:
  - The Tribunal found the record inconsistent with a lack-of-business-need rationale.
  - Applicant’s managers testified to a need for the position and for Applicant’s skills.
  - A vacancy was posted shortly after the non-conversion decision for a similar but lower-graded position that would fulfill many of the same responsibilities.
  - Conclusion: to the extent the DMD/CAO relied on lack of business need, she made a material error on the facts.
- On lack of career potential:
  - The Tribunal found Applicant was not afforded adequate opportunity to demonstrate suitability for career employment as required by Fund internal law.
  - The DMD/CAO’s view assumed Applicant could not have improved sufficiently within four months of being advised of performance concerns, which the Tribunal found meant Applicant had not been given adequate opportunity during his fixed-term appointment.
- On procedural fairness and written reasons:
  - The Tribunal observed a general principle of international administrative law requires a reasoned written explanation for decisions with profound employment consequences (Para. 125).
  - The absence of a written, reasoned decision deprived Applicant of transparency and hampered judicial review; it may have contributed to inconsistent articulations of reasons (Para. 129).
  - Where Fund Management’s decision diverges from RC advice, a reasoned explanation by the DMD/CAO is essential to avoid arbitrariness.
- Overall conclusion on non-conversion:
  - The Tribunal concluded the non-conversion decision constituted an abuse of discretion because it could not be substantiated on either of the possible bases and was not taken in accordance with fair and reasonable procedures.

### Tribunal findings on the non-selection decision
- Allegation and interference:
  - Applicant alleged the non-selection for the Grade A13/A14 vacancy was improperly influenced by the non-conversion decision and that HRD officials wrongfully precluded his selection.
- Tribunal’s assessment:
  - The Tribunal found HRD improperly interfered with the selection process by conveying to the selection panel that HRD would not approve Applicant’s appointment despite earlier advising Applicant was eligible to apply (Para. 153).
  - No rule precluded Applicant’s selection for the Grade A13/A14 vacancy following non-conversion; HRD’s intercession unfairly deprived Applicant of opportunity to compete.
  - Conclusion: the Fund abused its discretion in the non-selection process.

### Remedies and monetary awards
- Rescission:
  - The Tribunal rescinded the non-conversion decision in accordance with Article XIV, Section 1, of its Statute.
- Compensation in lieu of reinstatement:
  - Rescission did not automatically reinstate Applicant.
  - Given the circumstances, seniority of Applicant’s position, and time elapsed since separation, the Tribunal deemed monetary compensation more appropriate than reinstatement.
  - The Tribunal stated that “compensation in lieu of reinstatement must be substantial, and it must take account of the advanced stage of Applicant’s career at the time when the non-conversion decision was taken and, consequently, his diminished prospects for reemployment.” (Para. 167.)
  - Award: a sum equivalent to three times Applicant’s last annual salary from the Fund.
- Compensation for intangible injury (non-selection):
  - The Tribunal awarded monetary compensation for intangible injury arising from the Fund’s failure to take decisions in accordance with fair and reasonable procedures (Para. 170).
  - Aggravating factor: the non-conversion decision, which impeded fair consideration for the vacancy, was itself an abuse of discretion and had been rescinded (Para. 172).
  - Award: a sum equivalent to Applicant’s last annual salary from the Fund, reduced by the amount the Fund had earlier paid Applicant in relation to the Grievance Committee’s recommendation in the case.
- Legal fees and costs:
  - Pursuant to Article XIV, Section 4, of the Statute, the Tribunal ordered the Fund to pay Applicant’s legal fees and costs in the sum of $95,397.86, including unreimbursed fees incurred in the Grievance Committee proceedings.

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_Source: https://www.imf.org/-/media/files/imfat/j2021-2-summary.pdf_