Can the supreme authority of CERN Council be conceived without regard to the acquired rights of staff members, active and retired?
Under the pretext of adverse economic conditions in Europe — notwithstanding the presence of encouraging signs of an economic recovery — and the increase in human longevity — hardly a new fact — some CERN Council delegations are trying to find ways to cut back their special contributions to the Pension Fund and reduce their responsibility in pensions matters.
Of course, ups and downs in the pension regimes of international organizations are a classic phenomenon, and the fact that reforms involving efforts of pensioners and future pensioners were necessary in several European countries nourishes the arguments of those who want to reduce our pensions.
However, in pension matters, actuarial calculations are the key factor, and with our Pension Fund reaching, as planned, full funding on the 2041 horizon no technical justification exists for negative alterations to our pension conditions.
In addition, the current situation certainly warrants a legal reminder. For this the jurisprudence of the Administrative Tribunal of the International Labor Organization (ILOAT), whose competence is recognized by both CERN and ESO, as well as by some 60 other international organizations, is of great help.
There is no doubt that the CERN Council is the supreme governing body of the Organization, and as such, its task is to make any adjustments it deems necessary in the interest of the Organization.
That does not mean that Council is free to do as it likes. As the Tribunal stated in a judgment that set a precedent (No. 1118, delivered on 31 July 1991 in Case Niesing No. 2), after the structure of the services and the Staff Rules of an international organization have been established in full autonomy, the political and administrative bodies responsible as employer of managing the staff must respect the general principles inherent in the law of the international civil service in all their actions, especially when proposing changes in employment conditions.
For all governing bodies of international organizations, there exist limits not to be exceeded, unless one wants to tread the adventurous roads of illegality.
It follows from the foregoing that the Council must respect the principle of acquired rights of active or retired members of personnel. The Tribunal in its famous judgment No. 832, 1987 (Case Ayoub), which together with judgment No. 986, of 1989 (Case Ayoub No. 2), establishes a legal framework still valid today, defines an acquired right as a right of which the beneficiary may require compliance, notwithstanding any change in text.
As a consequence, the guarantee of acquired rights, thus conceived, exceeds the obligation imposed on the international legislator by the general principle of non-retroactivity of the law, to pass laws applying only in the future.
According to the Tribunal, the question to be answered regarding acquired rights is to determine whether the changes in employment conditions are of a fundamental and essential nature, or not. The ILOAT fixed three criteria in this regard.
Firstly, one must determine the nature (contractual or statutory) of the employment conditions that have changed. Secondly, the Tribunal takes into account the reasons why the changes were introduced. In this respect, the Tribunal notes that it cannot disregard the financial situation of the bodies (such as the Pension Fund) which are required to apply the employment conditions. Finally, the Tribunal considers the consequences of recognizing or not a given acquired right. In this context, it calculates the incurred loss compared to the overall total remuneration or, in the case of pensioners, compared to the amount of their pension. The Tribunal has the right to also make comparisons with other employment conditions of similar staff, international and national.
In the case of the CERN Pension Fund, a possible breach of acquired rights would arise from a change in the statutory framework, which for the Tribunal, however, does not exclude the recognition of an acquired right. This opinion is shared by two independent legal experts who contributed to the “Report by the Pension Fund Governing Board on Funding principle and policy and measures to restore full funding of the CERN Pension Fund” (CERN/2897, 2010, Annex 2). Moreover, the actuarial projections of the Fund to 2041 are at present satisfactory and it is difficult in these circumstances to see what may justify disadvantageous modifications.
In conclusion, if the case were brought before the ILOAT, CERN would undoubtedly run a risk. Indeed, the Tribunal may, as in the case Ayoub No. 2, decide that the changes worsen the situation of the applicants to an extent that exceeds the limits of CERN’s discretionary power, and, in addition to quashing the contested decisions, order compensation for losses suffered. Therefore, we hope that the Council will accept that, in agreement with the competencies of the various bodies of the governance of the Organization, and as proposed by the Pension Fund Governing Board, no further action need be taken for the Pension Fund. Indeed, exactly three years after its June 2011 Resolution, there is no reason for Council to renege on its commitment to contribute to the balanced package of measures designed to restore full funding of the Fund.
In addition to the legal risk mentioned above, to come back on this solemn pledge would be felt like a betrayal of the trust that staff has in its governing bodies and a lack of respect of Council towards the staff its contributions that led to the discovery of the Higgs in 2012, and its continuing efforts to ensure that the accelerators will be ready early 2015 for new adventures at 13 TeV and beyond.
