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TWN
Info Service on WTO and Trade Issues (Feb26/18)
Trade: ILO tribunal rules against WTO in ex-DDGs contract
dispute Geneva, 16 Feb (D. Ravi Kanth) — A tribunal at the International Labour Organization (ILO) has ordered the World Trade Organization to pay compensation to two former deputy directors-general (DDGs) whose contracts were terminated by WTO Director-General Ngozi Okonjo-Iweala shortly after she assumed office in March 2021 – a ruling that sources say has posed a significant embarrassment to the DG at a time of seemingly deepening unrest within the WTO Secretariat. The ILO tribunal, which adjudicates disputes involving international civil servants, ruled on 8 February that the WTO must pay former DDGs Mr Yonov Frederick Agah of Nigeria and Mr Karl Brauner of Germany an indemnity equivalent to three months’ salary, pursuant to Staff Regulation 10.6 and Staff Rule 111.8. The two were part of the team led by former DG Roberto Azevedo, who stepped down abruptly in August 2020 to join PepsiCo Inc. Under normal circumstances, Azevedo’s term would have ended in August 2021, and his deputies’ tenures would have run until 30 September 2021. Nigeria had initially fielded Agah as its candidate in the race to succeed Azevedo as DG but withdrew him for reasons that have never been explained. The country then threw its weight behind Ms. Okonjo-Iweala, despite her dual Nigerian-American citizenship. Although she garnered the broadest support during the selection process, her appointment was blocked at the time by then-US Trade Representative Robert Lighthizer, who questioned her suitability for the role. It was only after the election of Joe Biden as US President in November 2020 that the United States dropped its opposition, clearing the way for Ms. Okonjo-Iweala to take the helm at the WTO. In her first month in office, the new DG informed the sitting deputies that she will not retain them. She offered them salary payments through June 2021, but three deputies – Agah, Brauner, and Mr Yi Xiaozhun – sought termination benefits extending to September 2021. When their appeal was rejected, Agah and Brauner brought their case before the ILO tribunal. In its ruling, the tribunal found that the notice issued on 2 March 2021 constituted a contract termination by the Director-General under Staff Regulation 10.1( c), carried out in the interest of the WTO’s needs as permitted under Staff Regulation 10.3. The judges held that this entitled the complainants to an indemnity, and that the WTO could not deny the claim simply because the termination had not been mutually agreed. “Having regard to the contractual arrangements and the relevant staff regulations and staff rules, the tribunal is satisfied that the notice of 2 March 2021 was the termination of a contract by the Director General for the purposes of Staff Regulation 10.1c,” the ruling states. “The grounds for such a termination were identified in Staff Regulation 10.3. The termination was desirable in view of the needs of the WTO. Termination on this ground entitled the staff member to an indemnity. It is true that the termination was not on terms mutually agreed, but this could not, in the particular circumstances, be raised by the WTO to defeat the complainant’s claim to an indemnity. The tribunal considers that the complainants are entitled to an indemnity as provided in the staff regulations and staff rules, though they restrict their claim to an indemnity equivalent to three months’ salary.” The tribunal set aside the contested decision of 18 January 2022 and directed the WTO to pay each complainant the indemnity capped at three months’ salary. The judgment has delivered a reputational blow to Ms. Okonjo-Iweala at a sensitive moment, said people familiar with the development. The WTO Secretariat declined to comment on the tribunal’s ruling when asked. +
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