Government of the Federated States of Micronesia (FSM)
FSM CIU PPA LABOR MANAGEMENT PROCEDURES

December 2020

FEDERATED STATES OF MICRONESIA
Programmatic Preparation Advance (PPA)Labor Management Procedures

December 20201

Government of the Federated States of Micronesia (FSM)
FSM CIU PPA LABOR MANAGEMENT PROCEDURES

December 2020

Table of Contents
1.
2.
3.
4.
5.
6.

INTRODUCTION ..................................................................................................................................... 3
OVERVIEW OF LABOR USE ON THE PROJECT ........................................................................................ 3
BRIEF OVERVIEW OF LABOR LEGISLATION: TERMS AND CONDITIONS ................................................. 4
ASSESSMENT OF KEY POTENTIAL LABOR RISKS ..................................................................................... 6RESPONSIBLE STAFF............................................................................................................................... 6
POLICIES AND PROCEDURES .................................................................................................................. 6
AGE OF EMPLOYMENT .............................................................................................................................. 8
TERMS AND CONDITIONS ......................................................................................................................... 8
7. GRIEVANCE MECHANISM ...................................................................................................................... 8
8. CONTRACTOR MANAGEMENT............................................................................................................... 9
ANNEX 1: Example of Job Safety Analysis (JSA) .......................................................................................... 10
ANNEX 2: Provides a summary of relevant excerpts from the public service regulations that is included in
all contracts associated with the PPA. ........................................................................................................ 112

Government of the Federated States of Micronesia (FSM)
FSM CIU PPA LABOR MANAGEMENT PROCEDURES

December 2020

1. INTRODUCTION
Federated States of Micronesia (FSM) has requested access to funds from the World Bank (WB) that will
be used to prepare future WB projects within the FSM – the Programmatic Preparation Advance (PPA).
The funds will be used to prepare safeguards instruments, recruit project managers, engage short term
project (Project Workers) specific professional international technical Advisors (individuals and firms) for
inputs specifically related to project design and preparation and FSM CIU consultants.
FSM will apply to draw down on the fund as and when required.
Work on the PPA falls under the World Banks (WB) Environmental and social Framework (“ESF”), which
requires that FSM needs to prepare safeguards instruments for the activities that could be funded under
the PPA, these instruments are:•••Environmental and Social Commitment Plan (ESS1);
Stakeholder Engagement Plan (ESS10); andLabor Management Procedure (ESS2), which includes a labor Grievance Mechanism (GM).

This Document is the Labor Management Procedure (LMP), which is required under “ESS2 Labor andWorking Conditions”. Under ESS2 Borrowers are required to develop Labor Management Procedures(LMP), which are to facilitate planning and implementation of the project during the preparation periodusing PPA fund. The key objectives of the ESS2 will be maintained throughout the project cycle.

2. OVERVIEW OF LABOR USE ON THE PROJECT
Labor needs on the project are confined to professional services for the preparation of technicaldocumentation. Key activities include:
•
•
•
•
•

•

Activities necessary for the identification of the pipeline of Project/s;
Conducting reviews, studies, assessments and analyses to identify Project design/s (desktop andfield activities);
Activities to identify and establish the implementation and institutional arrangements necessary
for the project/s;
Supporting the engagement and consultations with relevant stakeholders at the National, State,
Municipal and traditional levels on the scope and design of Projects;
Other activities related to the preparation and implementation-readiness of the Project/s,
including but not limited to, travel and the hiring of consultants and experts with qualification,
experience under Terms of Reference (TOR) acceptable to the World Bank (WB) to support
preparatory activities; andDesign work and other studies, etc. (including safeguards instruments where required) in order toprepare the project/s.

These activities will be undertaken by a mix of individual direct workers and firm consultants, either
fixed term or full time.

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December 2020

International
Consultants

Proposed Project Activities

National
Consultants

Identifying the pipeline of Project/s.
Conducting reviews, studies and analyses to identify Project design/s.
Activities to identify and establish the implementation and institutionalarrangements necessary for the project/s.
The hiring of consultants and experts with qualification, experience underTerms of Reference (ToR) acceptable to the World Bank (WB) to support
preparatory activities.
Supporting the engagement and consultations with relevant stakeholders
at National, State, Municipal and traditional levels on the scope anddesign of the Project/s.
Undertaking consulting work (studies, designs, assessments etc.).
Project workers under the PPA are described as follows:
Direct Workers: Direct workers will be engaged by the PPA as individuals to undertake specific timebound tasks either on a full or part time basis.
Characteristics of Direct Workers:
Short-term and long-term international
professional technical consultants.
Short-term and long- term national
consultants.
Age Demographics
Gender balance

Internationally recruited consultants and as such a wide
range of nationality will be involved. Could be remote
and/or based in FSM.
Predominately Micronesian nationality residing within the
different states of the nation.
From 20 to 60+
Engagement based on professional skill set requirements.

Contracted Workers: It is possible a firm/s will be contracted under the PPA. Up to 10 contract workers(consultants engaged under firm contracts) are likely to be engaged in PPA-related activities though thenumber will be confirmed during implementation as the nature of activities and procurement
arrangements is clarified. Firms are likely to be engaged to undertake professional services such as
surveys and design documentation.
Primary Supply and Community Workers: Not anticipated to be engaged in PPA related activities.
Civil servants will be involved in Project activities and will be responsible for administering worker
contracts under the PPA. ESS2 does not apply to civil servants with the exception of OHS requirement.

3. BRIEF OVERVIEW OF LABOR LEGISLATION: TERMS AND CONDITIONS
FSM’s national laws, incorporating its Constitution and Annotated Code 2014 (The Code), provide some
important protections safeguarding employees’ labor and working conditions. These include
Constitutional prohibitions on slavery and involuntary servitude, a guarantee of equal protection under
the law, freedom from discrimination on various grounds, and freedom of expression and association.
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Further, the prohibition since 2012 of human trafficking under Title 11 (Crime) of the Code is asignificant development.
However, there are many areas where FSM’s national laws are inconsistent with international standards
and ESS2 including laws and practice regarding child labor, in general, and the worst forms of child labor,more specifically. Further, despite the introduction of anti-trafficking laws, human (and child) trafficking,commercial sexual exploitation and forced labor remain major issues that the Government is yet toaddress effectively in practice. Likewise, discrimination and harassment in employment, particularly of
women and persons with a disability, appear to be persistent and ongoing issues.
While FSM has ratified some international human rights treaties bearing on labor and working
conditions, including CEDAW, CRC, CRPD and the Convention on the Suppression of the Trafficking in
Persons and of the Exploitation of the Prostitution of Others, it has not ratified any ILO Conventions todate. This creates a significant international governance gap in FSM compared to many other PacificIsland nations where the World Bank Group operates which, in most cases at a minimum, have ratified
the core ILO Conventions. The lack of any ILO oversight of, and accounting for, labor and working
conditions in FSM exacerbate the risks and challenges for the World Bank Group and its borrowers
operating projects in FSM.
Notably, there are no trade unions operating in FSM currently, and no laws dealing specifically withtrade unions, the right to collective bargaining, or anti-union discrimination. This is an anomalous
situation compared to many other Pacific Island nations, which have active trade union movements. Like
the absence of ILO oversight of labor laws in FSM, the absence of workers’ organizations also diminishes
Government accountability for workers’ rights and presents potential risks for the World Bank Groupand its borrowers operating there.
The Code of the FSM 2014 edition Title 51 Labor chapter III Hiring of Non Residential Workers (pages
131-139) sets out various requirements of workers including the need to hold work visas by foreign(other than USA) contractors and workers including fly-in fly-out consultants who are restricted by the
30 day entry visa limit, unless previously arranged. No other Labor Legislation constraints apply toworkers potentially engaged on PPA activities.
Title 52 (Public Employment) provides for a grievance mechanism under the regulations whereby public
service employees (or a group of employees) can raise complaints re: their working conditions, status,
pay, and related matters, for hearing and adjudication. In doing so, the regulations provide that
employees must be free from coercion, discrimination, and reprisals and that they may haverepresentatives of their choice: sub chapter 144. Public sector employees are subject to national
legislation, which is consistent with ESS2. However, for non-public sector employees, there is no internalgrievance procedure mandated under national law.
There is no Occupational Health and Safety (OH&S) legislation in FSM. For all potential project based
OH&S risks, DoFA CIU has adopted World Bank Group EHS Guidelines for all staff and contractors.

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4. ASSESSMENT OF KEY POTENTIAL LABOR RISKS
Project activities will involve both administrative office-based work and/or field site visits throughout
the states of the FSM.
Activities will generally be undertaken in the capitals of each of the main islands of the nation’s fourstates (Chuuk, Kosrae, Pohnpei and Yap States) including the nation’s capital, Palikir located in Pohnpei
state. Possible activities undertaken in lagoonal islands and/or outer island atolls may be undertaken.
Locations of work requirements will be project specific and detailed in the PPA TORs.
The key labor risk that may be associated with the PPA activities relates to the requirements for ageneral understanding and implementation of OHS requirements for travel to and around FSM. This
includes fatigue, working in hot humid climates and in the tropical sun (particularly for foreign workers
form temperate climates), random acts of harassment or violence, petty theft, working near or onwater, traffic accidents (driving and during road inspections). In addition, cultural - traditional practices
and associated risks (e.g. entering private properties without permission, working on religious days
(Saturday or Sunday’s), inappropriate clothing and behavior, removing fruit-vegetation and so on)
relating to workplace interactions among workers and management will be required.
Despite the gaps in formal legislation on terms and conditions, non-discrimination and child/forcedlabor the Project risks are considered to be low given the professional nature of the work to beundertaken. Direct and contracted workers will have clear contract terms and conditions, including aclear information on rates of pay and any deductions and timeframe for delivery. No workers under 18
will be engaged.

5. RESPONSIBLE STAFF
This section identifies the functions and/or individuals within the project responsible for (as relevant):
Functions
Engagement and Management of projectworkers.
Engagement
andManagementofcontractors/subcontractors.
OHS briefings & Job Safety Environment
AuditsTraining of Workers in LMP/OHS
requirements.
Addressing Worker Grievances.

Responsible Entity
DoFA Secretary in coordination with the CIU Program
Manager, CIU team (including the Safeguard Team).
DoFA Secretary in coordination with the CIU Program
Manager, CIU team (including the Safeguard Team).
CIU Program Manager and Safeguard TeamCIU Program Manager and Safeguard TeamCIU Program Manager

6. POLICIES AND PROCEDURES
All PPA activities will be compliant to FSM and State legislation and regulations and World Bank EHS
Guidelines for all staff and project worker/contractors working under the PPA. These will be applicable
to all direct workers, and will be included as a contract requirement for all contracted workers.
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December 2020

Moreover all project workers will be expected to understand and ensure compliance to theseinternational standards.
All DOFA (CIU) contracts utilise a standard dispute resolution process. Relevant standard DoFA (CIU)
contracts paragraphs (individual and/or Firm) for international and national direct and contract workers
for all WB funded projects in the FSM includes:
DisputeResolution:
Inspections andAuditing:

Termination:

Any dispute, controversy or claim arising out of or relating to this Contract or thebreach, termination or invalidity thereof, shall be settled by arbitration in accordancewith the UNCITRAL Arbitration Rules as at present in force.
The consultant shall permit the World Bank (“the Bank”) and/or persons or auditors
appointed by the Bank to inspect and/or audit the Consultants accounts and records
and other documents relating to the performance of the Contract. Any failure tocomply with this obligation may constitute a prohibited practice subject to contract
termination and/or the imposition of sanctions by the Bank (including without
limitation a determination of ineligibility) in accordance with prevailing Bank’s
sanction/s procedures.
The Client may terminate this Contract with at least ten (10) working days priorwritten notice to the Consultant after the occurrence of any of the events specified inparagraphs (a) through (c) of this Clause.
a) If the Consultant does not remedy a failure in the performance of his/her
obligations under the Contract within seven (7) working days after being
notified, or within any period the Client may have subsequently approved inwriting.
b) If the Consultant, in the judgment of the Client or the Bank, has engaged incorrupt, fraudulent, collusive, coercive, or obstructive practices (as defined in
the prevailing Bank’s sanction procedures) in completing for or in performing
the Contract.
c) If the Client, in its sole discretion and for any reason whatsoever, decided toterminate this Contract.

Prevention and control measures to minimize occupational hazards will be based on the use of job
safety analyses (JSA). Annex 1 contains a basic JSA form, that may be used or adapted by consultants (orthey may have their own version). Prior to leaving for FSM, the consultants will be expected to prepare a
JSA to identify and manage the risks relating to their in-country work, with a focus on fieldwork. The CIU
Safeguards Team will review prior to work commencing.
JSA is a process involving the identification of potential health and safety hazards from a particular
work activity and designing risk control measures to eliminate the hazards or reduce the risk to an
acceptable level. JSAs are undertaken for discrete project activities such that the risks can be readily
identified and appropriate risk management measures designed.
The principles are:•Eliminating the hazard by removing the activity from the work process. Examples include
substitution with less hazardous chemicals, using different manufacturing processes, etc.;7Government of the Federated States of Micronesia (FSM)
FSM CIU PPA LABOR MANAGEMENT PROCEDURES

December 2020•

Controlling the hazard at its source through use of engineering controls. Examples include local
exhaust ventilation, isolation rooms, machine guarding, acoustic insulating, etc.;•

Minimizing the hazard through design of safe work systems and administrative or institutional
control measures. Examples include limiting exposure to sun/heat, working in pairs, calling in
regularly from remote work areas, etc.; and•Providing appropriate personal protective equipment (PPE) in conjunction with training, use,
and maintenance of the PPE.

The CIU Safeguards team will monitor progress with JSA implementation.

AGE OF EMPLOYMENTAll PPA related workers will be aged 18 or older. Ages will be verified during the procurement process.

TERMS AND CONDITIONS
Terms & Conditions
Specific wages, hours andother provisions that apply
to the project.

Any collective agreementsthat apply to the project.
When relevant, provide a listof agreements and describe
key features and provisions.

Actions
Project workers and/or Consultant firms engaged on contracts
with the project, approved by the World Bank in “No Objection”
process and pursuant to WB procurement guidelines asappropriate. Specific remuneration is considered private andconfidential to each person/firm undertaking the work.
Competitive international and national consultant rates will be
included in all PPA related activities.
Clear terms and conditions will be included in all contracts
include terms and conditions of employment, applicable leave
arrangements, wage deductions, and hours/timeframe of work,
timing of payments.
Workers will be free to join a workers organization of theirchoosing; the Project will not seek to influence or control sucharrangements.

7. GRIEVANCE MECHANISM
Labor Grievance Mechanism for contracted workers/consultants (national and international) will use
Dispute Resolution provisions embodied in their respective contracts based on the FSM National public
service regulations. Annex 2 provides a summary of relevant excerpts from the public service regulations
that would apply and outlines the process to lodge a grievance and to seek a resolution.
In summary for all grievances the first step will be the lodgment of the grievance (written or verbal) to
the CIU Program Manager, whom will within 2 weeks provide a response and seek resolution. If a
resolution cannot be attained or agreed by the claimant then the CIU Program Manager may request
the DoFA Secretary to review the complaint and seek a resolution OR it is registered and will be8Government of the Federated States of Micronesia (FSM)
FSM CIU PPA LABOR MANAGEMENT PROCEDURES

December 2020

managed through the FSM National public service provisions as detailed in Annex 2. All illegal activities
will be directly reported to the Police and/or Department of Justice and managed accordingly.

8. CONTRACTOR MANAGEMENT
Contractors firms, providing specialist services, may be engaged on the project for specific project
preparation activities. The Project will ensure that contractor workers are subject to the terms andconditions of work outlined in table above. These will be included in contractor contracts andcontractors will be expected to produce evidence of compliance.

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ANNEX 1: Example of Job Safety Analysis (JSA)
Add Organisation Name:
Ref Version:
Business details:
Business Name:
Address:
Contract Phone
Emergency Services Contact Details:
Job Safety Details:
Work Activity:
Who are involved in
the activities:
Plant & Equipment
used:
Maintenance checks
Required:Tools Used:
Materials Used:
Personal Protective
Equipment used:
Certificates – permits &approvals required:
Details of Activities
undertaken – write
controls out in full.

Contact Person:
Contact Position:
Contact Email:

Location:
This Job Analysis has been Authorized by:Name:
Position:
Signature:
Date:

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Government of the Federated States of Micronesia (FSM)
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ANNEX 2: Provides a summary of relevant excerpts from the public service regulations
that is included in all contracts associated with the PPA.
Annotations are marked up where there are aspects to be addressed to ensure consistency between the
LMP and public service regulations.
PART 15
15.1.
15.2.

GRIEVANCES
Employee Coverage. The Public Service Grievance System covers all Public Service
System employees.
Grievance Coverage. The grievance system will cover any matter of concern or
dissatisfaction to an eligible employee. [except the following:]
a.
b.
c.
d.

15.3.

15.4.

15.5.

[An adverse action appealable under Part 18.]
[A fitness-for-duty examination.][The content of published Government policy.]Non-selection for appointment, promotion, or reassignment from a group of
properly ranked and certified candidates.
e. [Disapproval of a merit increase, performance award, or other kind of honorary
discretionary award.] *** All these exceptions need to be further detailed andclarified…
By Whom Presented. A grievance may be presented by an individual employee or by agroup of employees acting jointly. For the purposes of this part, the word “employee”
shall be understood to refer also to group of employees acting jointly. An employee has
the right to be assisted by a representative of his choice in submitting a grievance.
Grievance Procedure.
a. Grievance may be presented either orally or in writing. An employee may present agrievance concerning a continuing practice or condition at any time. If his grievanceis related to a particular act or occurrence, he must present it within [fifteen]
calendar days of the date of that act or occurrence or the date when he becameaware of it.
b. An employee shall ordinarily present a grievance first to his immediate supervisor.
If the employee believes that he has a valid reason for not taking the grievance to
his immediate supervisor, or if his immediate supervisor so authorizes, he may
submit his grievance to a supervisory or management official of higher rank than theemployee’s immediate supervisor. It the employee believes that he has a valid
reason for not taking the grievance to any official in his agency, or if his grievance is
not settled to his satisfaction by officials in his agency, he shall submit his grievanceto the [Personnel officer] Director of the Office of Administrative Services or his
designee. The action of the [Personnel Officer] Director of the Office ofAdministrative Services shall be final unless the [Personnel Officer] Director of the
Office of Administrative Services himself authorized referral of the grievance toanother official.
Obligation of Supervisors and Management Officials.
Supervisors and othermanagement officials have an obligation and a solemn duty to accept an employee’s
grievance and to act promptly, fairly, and in good faith in the issue or issues presented
in the grievance. They also have the obligation to abstain from any restraint,interference, or reprisal against employees and their representatives who are exercising
the right to present grievances. It is not enough for an official to abstain from overt
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Government of the Federated States of Micronesia (FSM)
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PART 16.

December 2020

threats or interference. He must also refrain from making any statement or taking any
action that has the appearance of a threat, interference, or intimidation.
TERMINATIONS OTHER THAN FOR CAUSE

16.1.

16.2.

Resignation. Resignations shall be in writing and shall be submitted at least fourteen(14) calendar days in advance of the effective date. The [Personnel officer] Director of
the Office of Administrative Services may designate management and highly skilled
technical classes for which this period may be extended to thirty (30) calendar days.
The Department or Office Head shall submit a copy of the written resignation, together
with the necessary terminating documents, to the [Personnel Officer] Director of the
Office of Administrative Services or his authorized representative.
Termination for Medical Reasons. When the [Personnel Officer] Director of the Officeof Administrative Services believes that an employee has incurred an illness, injury, orother physical defect which may cause long-lasting impairment of his ability to performthe duties of his position, or that the employee has become mentally incapacitated or
has contracted an infectious or contagious disease which endangers the health ofothers, the [Personnel officer] Director of the Office of Administrative Services shallcause the employee to undergo medical examination as provided in [Sup-Part 3.12.]
sub-part 3.23. The medical examiner shall be requested to determine whether theemployee suffers from such a disqualifying condition and, if so, to provide the best
possible estimate of how long the disability is likely to last.
If it is expected that the disability will have ceased no later than ten working days after
the expiration of the employee’s accrued sick leave, the provisions of Paragraphs 10.3.
d. and 10.4.b. shall apply.
If it is expected that the disqualification will last beyond the period of the employee’s
accrued sick leave plus ten working days, or if at the end of that period a reexamination
discloses that the employee is still unable to perform the duties of his position, thefollowing procedure shall be followed:
a. The employee will be retained [in any status] in pay status until he has exhausted
his accrued sick leave.
b. Thereafter, unless a reassignment is available which the [Personnel Officer]
Director of the Office of Administrative Services deems suitable, the [Personnel
officer] Director of the Office of Administrative Services may terminate theemployee for medical reasons.

16.3.

Reduction-in-Force. [Department and agency Heads] may terminate the service of an
employee because of the condition of his position, for lack of work or funds, or for otherreasons outside the employee’s control which reflect no discredit on the services ofsuch employee. When there is an impending reduction in-force [and] Department or
agency concerned shall inform the [Personnel officer] OAS Director of this fact act least[sixty (60)] days in advance of the proposed action.
c. Reduction-in-Force Notice. When the determination to abolish a position is madeand all efforts to place the affected employee in another position within hiscompetitive area have failed, the [Personnel Officer] OAS Director shall inform theemployee, in writing, that he has been reached by reduction-in-force and that his
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16.4.

PART 17
17.1.

17.2.

17.3.

December 2020

services shall be terminated. The [Personnel officer’s] OAS Director’s letter shall bedispatched at least thirty (30) days before the effective date of termination and it
shall inform the employee whether his is eligible for placement on thereemployment list. The employee shall sign a copy of the letter to acknowledge
receipt and return it to the [Personnel Office] OAS.
d. Reemployment List. [Permanent] Regular employees terminated because of
reduction-in-force shall be entitled to be placed on an appropriate reemployment
list. Temporary employees shall not be entitled to these reemployment rights. It is
the displaced employee’s responsibility to request placement on the reemployment
list, as outlined in [Sub-Part 4.4] of these Regulations.
[Exit] Interview. A Personal interview shall be provided each employee terminating his
service, before the effective date of the termination action. The interview shall be
conducted for the purpose of learning from the employee the reason for his terminationand such other information as may be appropriate. Interviews shall be recorded inreport form and be made a part of the employee’s personnel folder. The interview shallbe conducted by the [Personnel Officer] OAS Director or his delegation.
MINOR DISCIPLINARY ACTIONSDefinition. For the purposes of this Part, “minor disciplinary actions” means oral
admonitions, written reprimands, and suspensions for no more than [three] working
days.
Oral Admonition. An oral admonition may be directed to an employee by his immediate
supervisor or by a supervisor of higher rank, except as the responsible management
official may restrict this authority. [Oral admonition need not be reported to the
Personnel office.]
Written Reprimand. A written reprimand may be addressed to an employee by his
immediate supervisor or by a supervisor of higher rank, except as the responsible
management official may restrict this authority. Written reprimands shall be subject tothe following procedures:a. The language of the written reprimand must make clear the nature of the offense
for which the employee is being reprimanded.
b. A copy of the written reprimand will be sent through the responsible management
official and to the [Personnel Office] OAS.
c. The [Personnel Office] OAS will retain the reprimand in the employee’s Personnel
Folder for a period [of] not to exceed [3] years from its date. If, during the [one-year
period], the employee becomes subject to another minor disciplinary action (except
an oral admonition) or to an adverse action, the reprimand shall be retained in theemployee’s Personnel Folder for a period of [one] year from that date to such
subsequent action. While the reprimands are included in the Personnel Folder, it
shall be taken into consideration in connection with performance evaluations,performance (within-grade) increases promotions, and action purposes.
d. Upon the expiration of the [one-year period] described in Paragraph c, thereprimand shall have no further force or effect for any purpose and shall bediscarded from the Personnel Folder.
e. At any time before the expiration of the [one-year] period described in Paragraph c,
the responsible management official may request the [Personnel Office] OAS
Director to discard the reprimand from the employee’s Personnel Folder. The
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[Personnel Officer] OAS Director shall carry out this request if he thinks that the bestinterest of the Public Service will benefit thereby.

17.4.

17.5.

PART 18[Suspension for no more than Three Working Days.] [All suspension, regardless of theirduration, will be initiated submission of a request for Personnel Action, which will state
the reason why the suspension is being effected. A copy of the respective Personnel
Action Form, like all other Personnel Action Forms relating to a particular employee,
shall be permanently included in the employee’s Personnel Folder as part of his official
record.]Recourse. An employee who has been made subject to a minor disciplinary action and
who is not in conformity therewith may have recourse to the grievance proceduredescribed in Part 15.
ADVERSE ACTION

18.1.

Definition. For the purpose of this Part, “adverse actions” means dismissals, demotions
for disciplinary reasons, and suspension for more than three working days.
18.2. Authority to Take Adverse Action. The authority to effect adverse actions is granted to
management officials by [Chapters 1 &2 of title 52 of the Code of the Federated Statesof Micronesia and further amended by Section 25(1) and 25(2). P.L. No 1-47, as
amended.] For this purpose, management officials shall include;a. The Speaker of the Congress.
b. The Public Auditor
c. The President and Vice-President of the Federated States of Micronesia.
d. The heads of all executive Departments, Offices, and Agencies.
e. The Chief Justice.
f. The chairman of each commission, authority, or similar body whose
employees are included in the Public Service.
These persons may delegate in writing the power to effect adverse actions, to such otherpersons under their supervision as they deem appropriate. Copies of all such writtendelegations shall be sent to and retained by the [Personnel Office] OAS Director. In this part theexpression “management official” will refer only to a person authorized to effect adverse
actions in accordance with this Sub-Part.
18.3.

18.4.

18.5.

Employee Coverage. This part applies to all [permanent] regular employees for the
National Government of the Federated States of Micronesia not exempt under [section
8, P.L. No. 1-47]. [(Section 117,52 FSMC.)]
Merit of Adverse Action. An adverse action may not be taken against an employee
covered by this part except for such cause as will promote the efficiency of the public
service.
Notification of Adverse Action. A management official assisted by the [Personnel
Officer] OAS Director shall effect an adverse action by delivering or causing to bedelivered to the employee affected a notification containing at least the following
information:a. Nature of adverse action, which is being taken.
b. Its effective date.
c. A full and detailed statement of the reasons for which the action is being taken,
specifying names, dates, and places.
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18.6.

18.7.

18.8.

December 2020

d. A statement of the employee’s right of appeal of the adverse action, including thestatement that such an appeal must be filed with the [Personnel Officer] OAS
Director within [fifteen] calendar days after the date of transmittal of thenotification pursuant to Paragraph 18.6.(b) below.
Delivery of Notification of Adverse Action.
a. The notification of adverse action shall be delivered to the employee affected by
one of the following means:(1) Whenever possible, to the employee personally.
His written
acknowledgement of its receipt should be obtained; in the absence of such
written acknowledgement, a certificate by the person who made thedelivery may be substituted.
(2) When personal delivery is not possible, to the residence of the employee.
Delivery at that location may be made to any person not less than eighteen
years of age and of sound mind residing or employed there. Delivery inthese circumstances shall be proved by means either of writing
acknowledgement of receipt by the person accepting delivery, or of acertificate signed by the person who made the delivery.
(3) When neither personal delivery nor delivery to the residence is possible byregistered mail with return receipt requested, to the employee’s last known
address.
b. The date of transmittal of the notification to the employee shall be;(1) When personal delivery is made, the date of such delivery.
(2) When delivery is made to the employee’s residence, the date of suchdelivery.
(3) When the notification is sent by mail, the date of mailing.
c. The effective date of the adverse action shall not be earlier than the close ofbusiness on the date of delivery.
Procedure for Filing Appeals. An employee may appeal from an adverse action at any
time during the period of [fifteen calendar days], counted from the date when the
notification of the adverse action was transmitted to him. All appeals shall be in writing
and shall be filed with the [Personnel Officer] OAS Director, by the employee personallyor by his authorized representative. The appeal shall include or be accompanied by thefollowing materials:
a. A statement of the employee’s reasons for contesting the adverse action.
b. Any offer of proof or documentary evidence which the appellant then wishes tosubmit.
c. The names of witnesses and the description of documentary and other evidence
that the appellant wishes to have at the hearing, with such explanation of theirrelevancy as may be appropriate.
d. Any request the appellant may wish to make for a delay in the date of his hearing,
beyond the period of [fifteen] days from the date when the appeal is filed.
e. The designation of the employee’s authorized representative, if any.
[Ad Hoc Hearing Committee.]a. Appeals from adverse actions will be heard by an ad hoc hearing committee
consisting of three members, selected from a panel of not less than seven officers or
employees of the National Government, nominated by the [President] with theadvice and consent of the Congress. Each committee shall comprise one member
chosen by the appellant, one chosen by the [Personnel Officer] OAS Director, and athird chosen jointly by the other two members. If the first two members are unable
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to agree on the choice of a third member within [two] working days after they havebeen notified of their selection, the [Personnel Officer] OAS Director shall thenselect the third member by [lot] from among the remaining members of the panel.
b. No member of an ad hoc committee shall be an officer or employee of componentof government to which the appellant is or was assigned, or a close relative of either
the appellant or the responsible management official. For the purposes of this SubPart, the work “component” shall mean either:(1) The legislative Branch;(2) The Judicial Branch;(3) Any Executive Department or Office; or(4) Any board, commission, authority, or similar body.
c. At the time of filing his appeal with the [Personnel Officer] OAS Director, theappellant or his authorizing representative shall select from the panel a member of
the ad hoc hearing committee. The [Personnel Officer] OAS Director shallimmediately determined whether or not the member named is prevented fromserving in conformance with Paragraph b of this Sub-Part; If so, he shall inform theappellant’s representative, who shall forthwith make another selection. The[Personnel Officer] OAS Director shall then choose the second member of [other]
the committee and shall promptly notify the two persons of their selection, urging
them to meet at the first opportunity to jointly select the third member.
18.9. [Personnel Officer’s] OAS Director’s Responsibilities before Hearing. In the period after
the ad hoc hearing committee has been constituted, the Personnel Officer will have,among another responsibilities, the following:a. To inform the management official who authorized the adverse action that an
appeal has been filed, and to obtain from him the names of witness and thedescription of tangible evidence for which [he wishes] subpoenas to be issued, if
any;b. To turn over to the ad hoc committee the original appeal, supporting
documentation, and lists of subpoenas requested by the appellant and the
management official concerned.
c. To ascertain from the committee the date and time of the hearing, and inform allinterested parties. The hearing shall be held within [fifteen] days after the appeal isfiled, unless the appellant requests a delay; if he does so, the date of the hearing
shall be at the discretion of the ad hoc committee.
d. To serve as a channel of communication between the committee and the interested
parties and to explain all legal, technical, and procedural requirements.
e. To arrange for a hearing room and other logistical needs.
18.10. Subpoenas.
a. The ad hoc hearing committee may on its own motion or that of the [Personnel
Officer] OAS Director, management, or the appellant subpoena witnesses andtangible evidence, when such witnesses and evidence are relevant and material tothe hearing. The committee shall be the judge of relevancy and materiality.
b. The appellant shall be entitled to review all material relied on by the management
official to support the reasons specified in the notification of adverse action,
including material relevant to the appellant’s past record if that record forms part ofthe basis for the action. This requirement means that management cannot use any
material to support its reasons which, because of security or other considerations,cannot be disclosed to the appellant or his authorized representative. The appellant
must be informed of his right to review the material relied upon.
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18.11. Representative.
a. An appellant has the right to present an appeal without representative, or to beaccompanied, represented, and advised by a representative of his choice at any
stage of the proceeding. The representative may be either an officer or employeeof the National Government (provided that no conflict of interest would be
produced) or a person from outside the government. A representative who is agovernment officer or employee shall be allowed reasonable periods ofAdministrative Leave from his regular duties to attend his functions as such
representative. To change his authorized representative, the appellant must give
written notice to the ad hoc hearing committee through the [Personnel Officer] OAS
Director.
b. The representative of management in connection with the haring shall be theAttorney General or his designee.
18.12. Freedom from Reprisal or Interference. An appellant and his representative must be
free to use the appeal system without restraint, interference, coercion, discrimination,or reprisal. An employee, whether acting in an official capacity for the government oron any other basis, must not interfere with or attempt to interfere with another
employee’s exercise of his rights under this Part. It is not enough for an official toabstain from overt threats or interference. He must also refrain from making any
statement or taking any action that has the appearance of a threat, interference, or
intimidation.
18.13. Conduct of Hearings. All hearings shall be public [unless the appellant requests a closed
hearing]. At the hearing, technical rules of evidence shall not apply and evidence shallbe taken steno graphically or by recording machine. The appellant and the
management official who authorized the adverse action shall each have the right to beheard, to present evidence, and to be confronted by all adverse witnesses. The
appellant may be represented by counsel of his own choosing. The [Personnel Officer]
OAS Director or his qualified designee shall attend the hearing and all meetings of any
ad hoc hearing committee and provide technical advice on request.
18.14. Report of Ad Hoc Committee. Within [seven] calendar days after the close of thehearing, the ad hoc committee shall prepare a full written statement of its findings offact and its recommendation concerning the adverse action that was appealed. It may
recommend that the action be affirmed, modified, or reversed. [The committee shallimmediately deliver this statement, with such supporting documentation as it deems
appropriate, to the highest management official responsible for the agency in which theappellant is or was employed, with a signed copy to the [Personnel Officer] OAS
Director.]That management official, after considering the findings andrecommendations, will personally give the final decision on the appeal. This
management official shall be;a. For the Legislative Branch, the Speaker of the Congress.
b. For the Executive Branch, the President.
c. For the Judicial Branch, the Chief Justice.
d. For each commission, board, authority, or similar body, the Chairman thereof.
18.15. Appeal File. For every appeal which is submitted in connection with an adverse action,
the [Personnel officer] OAS Director shall establish an appeal file, which shall beseparated and distinct from the regular employee files. The contents of the appeal fileshall include, but not necessarily be limited to, the following:a. Copy of the notification of adverse action.
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b. The appeal submitted by the employee, with all supporting documents.
c. All Written statements, authorizations, requests, and other documents presented inconnection with the appeal and the hearing.
d. The lists of subpoenas requested by the appellant at the hearing.
e. Copies of all documentary evidence introduced at the hearing.
f. Transcript of the hearing, including original tapes or other recordings, if any.
g. Signed copy of the report of the ad hoc committee.
Each appeal file shall be kept by the [Personnel Office] OAS for not less than [six] years from thedate of final decision of the respective appeal, and thereafter for such additional period as the
Attorney General may find appropriate.
TITLE 17 FSM Constitution§ 108. Hearings.
(1)
Any person aggrieved by agency action is entitled to a hearing before the highest
administrative official of the department or office of which the agency is a part. Hearings shall be
initiated by the submission of a petition to such administrative official.
(2)
Hearings shall be conducted and orders shall be made in accordance with section 109 of
this chapter; provided, however, that in the event and to the extent that any other law establishes
another procedure for administrative review of the particular matter the provisions of such other law
shall be controlling.
Source: PL 1-150 § 8.
Case annotations: Analysis of a claim of bias of an administrative decision-maker begins with apresumption that decision-makers are unbiased. The burden is on the challenger to show a conflict ofinterest or some other specific reason for disqualification. Specific facts, not mere conclusions, arerequired in order to rebut the presumption. Heirs of Mongkeya v. Heirs of Mackwelung, 3 FSM R. 92, 99(Kos. S. Ct. Tr. 1987).
There is a presumption that a judicial or quasi-judicial official is unbiased. The burden is placed on theparty asserting the unconstitutional bias. The presumption of neutrality can be rebutted by a showing ofconflict of interest or some other specific reason for disqualification. Where disqualification occurs, it isusually because the adjudicator has a pecuniary interest in the outcome or has been the target of
personal abuse or criticism from the party before him. Suldan v. FSM (II), 1 FSM R. 339, 362-63 (Pon.
1983).

§ 109. Conduct of hearings.
(1)
All parties and all persons who have an interest in the controversy who are known to theagency or hearing officer, and any person requesting individual notice shall be entitled to personal
notice of all hearings. Persons entitled to notice of a hearing shall be timely informed of:(a)the time, place, and nature of the hearing;(b)

the legal authority and jurisdiction under which the hearing is to be held;18

Government of the Federated States of Micronesia (FSM)
FSM CIU PPA LABOR MANAGEMENT PROCEDURES(c)the particular sections of the statutes and regulations involved; and(d)the issues presented.

December 2020(2)
If the agency or other party is unable to state the matters in detail at the time the notice isserved, the initial notice may be limited to a statement of the issues involved. Thereafter, upon
application, a more definite and detailed statement shall be furnished.
(3)
Unless precluded by law, disposition without a hearing may be made of any contested
matter by stipulation, agreed settlement, consent, order, or default.
(4)
The hearing shall be held within 30 calendar days after the submission of the petition,
unless the petitioner requests a delay. At the hearing, the petitioner, the management official
responsible for the agency action which is the subject matter of the controversy, and such other persons
as the hearing officer shall permit, shall each have the right to be heard, to present evidence, toconfront all adverse witnesses, and to be represented by counsel of his own choosing.
(5)
At the hearing, technical rules of evidence shall not apply. At the discretion of the hearing
officer, evidence may be taken stenographically or by recording machine. The hearing officer isauthorized to issue subpoenas for witnesses and tangible evidence at the request of any party or on his
own motion. Hearings shall be public except when the petitioner requests a closed hearing.
(6)
Within 15 days after the conclusion of a hearing, the hearing officer shall prepare a full
written statement of his findings of fact and his decision. The hearing officer shall forthwith transmit his
findings of fact and decision to all parties. The decisions of the hearing officer shall constitute final
agency disposition of the action.
(7)

The hearing officer may:(a)administer oaths and affirmations;(b)rule on the admissibility of evidence;(c)served;(d)take dispositions or have dispositions taken when the ends of justice would be

regulate the course of the hearing;(e)hold conferences for the settlement or simplification of the issues by consent of
the parties;(f)

dispose of procedural requests or similar matters;(g)make or recommend orders or decisions in accordance with this chapter;(h)take such other action as would serve the ends of justice.

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(8)
Except to the extent required for the disposition of ex-parte matters as authorized by law,
the hearing officer may not consult a person or party or representative of a person or party on a fact inissue unless notice and opportunity are given to allow all parties to participate.
(9)

The hearing officer may:(a)communicate with other members of the agency, except as limited by subsection(8) of this section; and(b)have the aid and advice of one or more personal assistants, and of the Attorney
General and his staff if such assistance would not be in violation of subsection (8) of thissection. Such assistants shall be constrained in the same manner as the hearing officer as
provided in subsections (8) and (9) of this section.
(10) Any oral or documentary evidence may be received, but the hearing officer as a matter ofpolicy shall provide for the exclusion of irrelevant, immaterial, unreliable, or unduly repetitious
evidence. Findings of fact shall be based exclusively on the evidence and on matters officially
noticed. Except as otherwise provided by law, privileges relating to evidence in the courts of the TrustTerritory and Federated States shall apply in the conduct of hearings. A sanction may not be imposed ororder or decision issued except on consideration of the whole record supported by and in accordancewith substantial evidence. A party is entitled to present his case or defense by oral or documentary
evidence, to submit rebuttal evidence, and to conduct such cross-examination as may be required for a
full and true disclosure of the facts.
Source: PL 1-150 § 9.
Cross-reference: The statutory provisions on the Judiciary are found in title 4 of this code. The statutory
provisions on Judicial Procedures are found in title 6 of this code.
Case annotations: The highest management officials cannot be said to be biased as a class and theycannot be disqualified, by virtue of their positions from final decision-making as to a national government
employee’s termination under section 156 of the National Public Service System Act, without individual
consideration. Suldan v. FSM (II), 1 FSM Intr. 339, 363 (Pon. 1983).
The FSM Rules of Civil Procedure do not apply to proceedings before administrative agencies. Andrew v.
FSM Social Sec. Admin., 12 FSM R. 101, 104 (Kos. 2003).
An agency action must be set aside when the action was without substantial compliance with theprocedures required by law. Ruben v. FSM, 15 FSM R. 508, 516 (Pon. 2008).
When a letter does not set forth the agency’s required findings of fact, it does not qualify as a full written
statement of the hearing officer’s findings of fact and his decision, and in the absence of a full written
statement of findings of fact and an explanation of how the hearing officer arrived at his decision, thecourt has no reasonable basis upon which to review the agency action. Because the agency failed to
substantially comply with the procedural requirement, the court will set aside its administrative
action. Ruben v. FSM, 15 FSM R. 508, 517 (Pon. 2008).
Although a hearing officer has the discretion to decide which recording method to use stenographic orrecording machine the hearing officer does not have the discretion to altogether fail to make a record of20

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December 2020the hearing and its failure to substantially comply with this procedural requirement is yet another reason
an agency action must be set aside. Ruben v. FSM, 15 FSM R. 508, 517 (Pon. 2008).
When an agency failed to substantially comply with the procedures required by law through the hearing
officer’s failure to prepare a full written statement of his findings of fact and his decision and the agency’s
failure to make a record of the hearing proceedings, either stenographically or by recording machine, thecourt will set aside the agency order. Ruben v. FSM, 15 FSM R. 508, 517 (Pon. 2008).
When there are discrepancies in the evidence, which result in a dispute of material facts, the court will
decline an invitation to conduct a de novo review and conclude the matter by summary judgment. Ruben
v. FSM, 15 FSM R. 508, 517 (Pon. 2008).
Under the common law rule known as the doctrine of primary jurisdiction, courts may remand matters toadministrative bodies that are familiar with the regulated activity at issue. Courts apply the doctrine ofprimary jurisdiction in the hope that by remanding matters to an administrative body, the administrative
determination will obviate the need for further court action or will make possible a more informed andprecise determination by the court. Ruben v. FSM, 15 FSM R. 508, 518 (Pon. 2008).
The doctrine of exhaustion of remedies requires that a potential plaintiff follow whatever procedures arein place to seek reconsideration of an agency’s allegedly erroneous decision before bringing the dispute to
the attention of the judiciary. It is incumbent on parties to exhaust administrative procedures concerning
their disputes as designated by applicable state law before coming to court, unless and until the state law
is judged invalid. Smith v. Nimea, 16 FSM R. 186, 190 (Pon. 2008).
Closely related to the requirement of exhausting all administrative remedies before seeking judicial
redress is the doctrine of res judicata, which bars the relitigation by parties or their privies of all mattersthat were or could have been raised in a prior action that was concluded by a final judgment on the merits
that has been affirmed on appeal or for which time for appeal has expired. Once a plaintiff availed
himself of the administrative remedies available for claims under Pohnpei state law, he was obligated toexhaust those remedies as provided by Pohnpei state law before filing suit in the FSM Supreme
Court. When the plaintiff failed to exhaust these remedies by failing to appeal the Pohnpei administrativedecision, his claims for unpaid wages, overtime, wrongful termination and criminal penalties are barred asa matter of law. Smith v. Nimea, 16 FSM R. 186, 190 (Pon. 2008).

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