Tread lightly when making promises ... World Bank Administrative Tribunal confirms the principle of promissory estoppel

By Frédéric Dopagne, Saskia Lemeire and Bert Theeuwes

In a decision of 18 October 2018 (Decision No. 594) , the Administrative Tribunal of the World Bank (WBAT) confirmed the principle of promissory estoppel hereby referring to earlier decisions (Decisions No. 209, 277 and 328).

In essence, promissory estoppel is the principle that a promise is enforceable, even when it is made without formal consideration or legal ground, when an organization makes a promise to a staff member who then relies on that promise to his or her subsequent detriment. Promissory estoppel is a means to hold an organization which made a promise to that promise and stop them from arguing that the underlying promise should not be legally upheld or enforced.  

In its decision, the WBAT stated under consideration 69 that:  “In the Tribunal’s view, to sustain her claim of promissory estoppel the Applicant must show the elements of an unequivocally proved promise, a clear and unambiguous statement or assurance that she would be eligible for an Expiration Payment, unconditionally made by an authorized HR official. The Applicant must also show reliance in good faith on the statement or assurance provided by HR, to her detriment (see Decision No. 594)”.

In the present case, the WBAT found that the evidence presented could not support the conclusion that an “unequivocally proved” promise was made and consequentially rejected the claim.

In this context, it can be remarked that other administrative tribunals apply the same or a similar principle, but under a different name (such as, for example, the principle of legitimate expectations).  In a number of judgments, the Administrative Tribunal of the International Labour Organization (ILOAT) applies a similar principle, as it established in Judgment 782. In this judgement, the ILOAT stated that there are “circumstances in which it would enforce a promise by an international organization to a staff member”.  The ILOAT pointed out that “The promise must be substantive, i.e. to act, or not to act, or to allow; it must come from someone who is competent or deemed competent to make it; the breach of it must cause injury to the person who relies on it; and the position in law must not have altered between the date of the promise and the date at which fulfilment is due. It does not matter what form the promise takes: it may be written or oral, express or implied." (see Judgment 1278 consideration 12 and more recently Judgments 3141, 3148 and 3204).

Although the principle is clear and should apply in every organization as a corollary of the principle of good faith, the concept of promissory estoppel is not unconditional and should be differentiated from other concepts such as acquired rights, protectable confidence, expectancy, etc. When assessing this principle, administrative tribunals will always consider all accompanying circumstances. In this respect, the ILOAT considered that “it is not every statement made by or on behalf of an organization that is capable of being characterized as a promise that gives rise to a legal obligation on the part of the organization to honor the promise. Were that the applicable principle, it would almost certainly introduce an unacceptably high level of caution and constraint into the dialogue between senior officers of an organization and staff members they manage” (ILO Administrative Tribunal Judgment 3619).

In this context, caution is advised when making promises.