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UNAT considered the Secretary-General's appeal, specifically as to whether UNRWA DT’s decision to award special allowances for extra duties performed and compensation for moral damages was an error in law or fact, resulting in a manifestly unreasonable decision. With respect to the allowance for extra duties, UNAT noted that it is settled in its jurisprudence that the Agency has discretionary powers to pay the special allowances, which must be exercised reasonably in accordance with their substantive legal requirements. UNAT held that there was no room for UNRWA DT to substitute its decision for that of the Agency unless the Agency’s decision was unreasonable or disproportionate. UNAT found that, in the present case, there was no allegation of an unreasonable or disproportionate exercise of the Agency’s discretion. UNAT accordingly held that UNRWA DT erred in law and exceeded its jurisdiction by awarding special allowances. With respect to the compensation for moral damages, UNAT found that the circumstances of the present cases did not qualify UNRWA DT to invoke its statutory jurisdiction to award such damages. UNAT noted that it previously affirmed awards of moral damages for a “fundamental breach,” which involved findings or allegations of actions including: “numerous substantive and procedural irregularities,” “reckless abuse of power,” “deliberate manipulation of the Organisation’s processes,” or significant violations of pertinent provisions regarding highly consequential decisions, such as terminations and transfers to other posts. UNAT held that the inconsequential “anomalies” found in the present case did not reach such a level of severity. UNAT accordingly held that UNRWA DT also erred when it awarded compensation for moral damages. UNAT granted the appeal and vacated UNRWA DT’s judgment.