12 November 2002

The United Nations General Assembly is presently discussing and deciding on proposals for an increase in Professional salaries throughout the UN system, which, if approved, would be the first significant real increase in more than a decade.

Here is some background information on how Professional salaries in the UN are decided. Since the time of the founding of the League of Nations, the salaries of international civil servants have been determined by the Noblemaire principle, which says that the international civil service should be on par with the highest paid national civil service. This principle was adopted by the founders of the UN. The US, as the highest paid civil service, was chosen as the comparator.

The General Assembly has reaffirmed on a number of occasions that the so-called margin (or percentage relationship) between the net remuneration of officials in the Professional and higher categories of the United Nations in New York and officials in comparable positions in the United States federal civil service in Washington, D.C., should range between 110 and 120, with a desirable mid-point of 115. The margin range above 100 is intended to compensate for the fact that UN civil servants generally live outside their home countries. The monitoring of the margin has been delegated to a technical body, the International Civil Service Commission (ICSC), which makes recommendations on Professional salaries to the UN General Assembly, with whom the final decision lies.

At its most recent session, in July 2002, the ICSC noted that the net remuneration margin for 2002 was estimated at 109.3 on the basis of the approved methodology and existing grade equivalencies between UN and US officials in comparable positions. The Commission thus recommended a real salary increase to the UN civil service of 5.7 per cent, which would restore the margin to 115.

A complicating factor, which has been in existence since the 1980s, is the differential in the margin among the different grades, with the margin being much higher in the lower grades (P1’s and P2’s) and lower in the higher grades (P5’s to D2’s). The Member States have repeatedly insisted that this differential should be eliminated. At the last session of the ICSC, FICSA called for an across-the-board increase for all the grades, i.e., a 5.7 per cent increase for everybody. Despite some sympathy for the FICSA position, the ICSC Commissioners were cognizant of the fact that the Member States had requested them to address the margin differentials through higher salary increases for the higher grades than for the lower ones. After much debate the following compromise was recommended:

The resulting overall margin (weighted by the population in each grade) is 115.

The proposed increase is under discussion in the Fifth Committee of the UN General Assembly. The cost of this increase - just over US$ 74 million for the whole of UN in 2003 - is not really substantial when compared to the size of the budgets of all the UN organizations. However, since financial considerations hold such sway with the Member States, it is difficult to predict what will happen.

From FICSA’s viewpoint, a real increase in Professional salary scales is long overdue. Apart from an insignificant increase of 0.4 per cent in 1997, there has been no real increase in UN Professional salaries since 1990 (and even then the increase was insufficient to recover the substantial loss in purchasing power of Professional salaries which had occurred in the late 1980s). The margin has been below the "desirable mid-point of 115" for most of the 1990s with no action being taken to bring it back to 115. Furthermore, already some time ago it was recognized that the US civil service is no longer the highest paid, but no action has been taken to change the comparator. In FICSA’s view, the current proposal is in reality an extremely modest one. Not only is an increase fully justified by the approved methodology; the proposed increase also represents the bare minimum if the UN General Assembly wants to claim that it is still respecting its own past resolutions on the matter. FICSA would have preferred a more balanced approach to the salary increases with somewhat higher increases for the lower grades, but we consider it absolutely fundamental that the overall margin be brought to at least 115.

FICSA has presented its case to delegates in the UN Fifth Committee, where the decisions concerning the proposed salary increase will be made. FICSA argued that an increase represented good personnel policy, was warranted by the methodology, and constituted a just compensation to UN Professional staff.

Indeed, if an increase that was warranted by the methodology were to be rejected or watered down on the basis of short-term financial considerations, we expect that Professional staff throughout the UN would be extremely discouraged. However, there are no guarantees. In the next few weeks the decisions on an increase in Professional salaries throughout the UN system will be made. Watch out for more updates on this.

FICSA ISSUE PAPER - 2002

Federation of International Civil Servants’ Associations

The Federation of International Civil Servants’ Associations (FICSA) represents staff in the Professional and General Service categories working in 23 United Nations agencies*. The decisions and recommendations of the International Civil Service Commission (ICSC) are of vital interest to our members.

Evolution of the UN/US net remuneration margin and the base floor salary scale

For the UN to be effective, it is important to attract staff of a high calibre. This has been recognised often by the management of the UN bodies and most recently in the Secretary-General’s report "Strengthening of the UN: an agenda for further change" (A/57/387), which states that "Adequate compensation is a very important factor in attracting and retaining good staff."

Many of the reforms mentioned by the Secretary-General, such as cutting unnecessary layers of bureaucracy, rejuvenating the Organization, achieving better gender and representational balance, as well as reforming the pay and benefits system, hinge on the existence of an adequate compensation system.

Extensive change is occurring in the UN system. Reforms are being made to make programmes more performance based and results oriented, more efficient, and more effective. Staff who are well qualified and highly motivated are essential to the success of these efforts.

Consensus exists among UN administrations, the ICSC and staff that the restoration of the margin to115 would strengthen the ability of organizations to compete for the best professionals worldwide.

In 1989, 1991, 1995-2001 all resolutions on the common system have reaffirmed the Noblemaire Principle and the need to ensure the competitiveness of UN salaries. A margin between 110 and 120, with a midpoint of 115 has been viewed by the General Assembly as desirable.

The ICSC has identified the margin for 2003 as 109.3. The margin has been below the midpoint for most of the 1990s. Yet, Professional staff in the UN have not received a real salary increase in the last 12 years. The only real increase in Professional salaries, a 0.4 percent raise, was granted in 1997.

Viewed in the context of the organizations’ regular budgets, the recommended expenditure represents a small proportion of overall costs. With appropriate planning, the restoration of the margin could be accomplished without increasing overall budgets or reducing programme activities.

As mentioned above, staff are aware that the margin has fallen below the accepted range. It is reasonable to expect that raises to restore their salaries to the midpoint of the range will be granted in 2003 in accordance with the existing methodology. If this adjustment is not implemented, staff will undoubtedly become discouraged.

Today, UN staff are working harder with fewer resources. They are on the front lines and behind the scenes, making contributions to address many critical issues on the global agenda.

This year provides an opportunity to address a long-standing problem in salaries. FICSA welcomes the recommendation to grant a real increase of the base/floor salary scale and to restore the overall margin level to the desirable mid-point of 115.

Approval of this recommendation is good human resources policy, respects the Noblemaire principle, and affords just compensation to UN Professional staff.