RESTRICTEDWORLD TRADE
ORGANIZATIONWT/BFA/W/75
28 June 2002
(02-3601)
Committee on Budget, Finance and Administration
AGREED TERMINATIONS
Note by the Secretariat1
1. As requested by the Committee on Budget, Finance and Administration at the meeting held
on 8 May 2002, the present paper sets out a proposal for the establishment of a scheme to facilitate theagreed termination of regular staff.
Introduction
2. In certain cases, the Organization has an interest in facilitating the early departure of staff
from the Secretariat.  Such an interest arises, for example, in cases where the Director-General wishesto restructure the Secretariat in order better to respond to the needs of Members or where the skills of
the staff member no longer correspond to programme requirements.  A scheme to facilitate agreed
terminations would enable the Director-General to take such actions in a timely manner and on a
mutually agreed basis.  Such a scheme would not be used in those cases where separation from
service is the result  of unsatisfactory performance or where it has been decided to suppress the post
concerned.  In such cases, the Organization may proceed with separation without having to obtain the
consent of the staff member.  Similar arrangements have been introduced by other intergovernmental
organizations, although the precise details vary from  organization to organization according to their
particular regulations and rules and to their particular requirements.
Target population
3. A scheme to facilitate agreed terminations  would be designed to target those staff members
whose services are no longer required by the Organization and whose early separation from service
would be in the mutual interest of the WTO and the staff member. Such situations may arise in any
sector of the Secretariat and at any level.  In order to be effective, an agreed termination scheme
should therefore not be limited to specific occupational groups or levels of the hierarchy.  Any staff
member should be free to apply for consideration under the scheme. The final decision would betaken  by the Director-General (see paragraph 7, below).
Structure of the agreed termination scheme
4. Each agreed termination package would be composed strictly in accordance with the relevant
provisions of the Staff Regulations and Rules and Pension Plan Regulations.  A staff member whoseparates from service enjoys certain statutory entitlements.  These include, for instance, separation
grant, commutation of unused annual leave and pension entitlements.  There are other statutory
provisions, the application of which may be varied depending on the circumstances of the case and the
interest of the Organization. These “variable” entitlements include the termination indemnity, pay in
lieu of notice and special leave.   The agreed termination scheme would comprise only the “variable”entitlements since all other entitlements are in any event due to the separating staff member.
                                                     
1 This document has been prepared under the Secretariat’s own responsibility and is without prejudice
to the positions of Members or to their rights or obligations under the WTO.WT/BFA/W/75
Page 2
5. In order to be effective, an agreed termination scheme  should be flexible.  It should be
possible to adjust certain elements of the scheme provided that the needs of the Organization are met
and the relevant Regulations and Rules are strictly observed.  For instance, in certain cases,
particularly when the staff member has rather short pensionable service, it might be in the interest ofthe staff member to be able to remain on special leave at the end of his/her service in order to be able
to retire at the normal retirement age and thus avoid early retirement penalties.  In other cases of, for
instance, long-serving staff, it would not be in th e interest of the staff member to delay drawing a
retirement pension.
6. The provisions governing the te rmination indemnity and payment of salaries and allowances
in lieu of notice include a margin of flexibility which may be used in those cases where a mutually
agreed termination is desirable in view of the needs of the Organization.
7. An agreed termination scheme should be structured in such a way as to ensure equal treatment
for all staff members.  The elements and size of the package should not depend on the negotiating
power or influence of the staff member but should rather be based on predictable and transparent
parameters.  At the same time, the Director-Gener al should ultimately retain the discretionary power
to determine which staff members should be accorded agreed terminations. The exercise of thatdiscretion would remain subject to the normal constraints of consistency of practice and non-abuse of
power in order to protect the Organization from  any challenge against such decisions before the Joint
Appeals Board and/or ILO Administrative Tribunal.
Construction of possible agreed termination packages
8. As stated in paragraph 4, above, the elements of an agreed termination package would
comprise only the “variable” entitlements, including termination indemnity, pay in lieu of notice and
special leave.
Termination indemnity
9. Under Staff Regulation 10.6, where termination action is desirable in view of the needs of the
WTO, on terms mutually agreed with the staff member, the termination indemnity may be increased
in exceptional cases by up to 50 per cent. The maximum termination indemnity payable after 15 or
more years of service amounts to 12 months of salary, or 18 months after application of the
discretionary increase.  In order to develop a meaningful scheme, the Secretariat would apply the 50
per cent mark-up to all cases of agreed termination.
Pay in lieu of notice
10. The Staff Rules provide for a maximum period of notice of termination of three months.  Pay
in lieu of notice may be exceptionally authorized by the Director-General.  The Secretariat would
grant a payment corresponding to three months’ notice, to be increased by one month for every year
of service beyond 15 years of service.
Special leave
11. As explained above, the granting of special leave would permit the staff member concerned to
remain in the Pension Plan, to continue contributing to the Pension Plan if he/she so wished and to
retire with a better pension.  Such an arrangemen t would be particularly helpful for those who have
not yet reached the minimum retirement age or who would otherwise be subject to early retirement
penalties.  In the case of special leave, the precise details would have to be adjusted according to each
particular case.WT/BFA/W/75
Page 3
Establishment of an agreed termination fund
12. The purpose of an agreed termination  fund would be to finance those “variable” parts of a
termination package which are not already covered by the standard cost calculation in the budget.The aim would be gradually to constitute a fund which would enable the Organization to respond to
changing operational and staffing needs. The f und would be replenished on an annual basis as
required.
13. Given an average net salary in the WTO of CHF 109,000 and an average length of  service of
12 years, it is estimated that the average agreed termination package would cost approximately
CHF 200,000.  If an agreed termination fund of CHF 2 million were established, it would allow
approximately 10 separations in any one year.  The fund could be maintained at that level either bytransfers from the overall WTO  surplus, if any, or by means of a budget allotment.
Proposal
14. In conclusion, this paper has been prepared at the request of Members of the Committee on
Budget, Finance and Administration who wished to consider establishing an agreed terminationscheme  in order to permit the WTO to separate on a mutually agreed basis those staff whose services
are no longer required by the Organization.  The scheme  would be structured to include “variable”
entitlements including termination indemnity, pay in lieu of notice and special leave.  It  would be
open to all staff and would be based on predictable and transparent parameters.  The scheme  would be
financed from a fund which would be initially established and subsequently replenished by transfersfrom the overall WTO  surplus, if any, or through a budget allotment.  The initial target for the agreed
termination  fund would be CHF 2 million.
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