C-28/74

2. Officials — Termination of service — Holders of Grades A 1 and A 2 under the scheme of the Staff Regulations of the ECSC of 1956 — Financial benefits — Legality (Regulation No 2530/72, Article 5)

3. Officials — Remuneration — Payment — Currency other than the Belgian franc — Devaluation — Article 63 of the Staff Regulations of Officials — Legality

1. As the legal link between an official tions of 1962 and cannot and the administration is based upon consequently be regarded as the Staff Regulations and not upon a discriminatory. contract, an official cannot in any case claim a vested right unless the facts giving rise to that right arose 3. Although it is for the Council to under a particular set of Staff adapt the Staff Regulations to economic realities and thus to seek Regulations prior to the amendment decided upon by the Community the means of alleviating any loss authority. suffered by officials residing in a country whose currency has been 2. The benefits reserved by Article 5 of substantially devalued, that cannot Regulation No 2530/72 for officials mean that the existing wording of who held Grade A1 or A2 under the Article 63 is illegal or that in scheme of the Staff Regulations of the consequence it is inapplicable within ECSC of 1956 are a mere the meaning of Article 184 of the transposition from the Staff Regula­ EEC Treaty.

In Case 28/74

FABRIZIO GILLET, former Director-General at the Commission of the European Communities, represented by Giacomo Antonelli and Filippo Satta of the

1 — Language of the Case: Italian.

Application for a declaration of the applicant's right to payment of the allowances on resignation in the interests of the service on the basis of! Article 42 of the Staff Regulations of the ECSC of 1956 and to the conversion of the amounts paid to him by way of such allowances on the basis of the real parities between the Belgian franc and the Italian lira at the date of payment,

THE COURT (Second Chamber)

composed of: A. J. Mackenzie Stuart, President (Rapporteur), H. Kutscher and M. Sørensen, Judges,

Advocate-General: H. Mayras Registrar: A. Van Houtte

gives the following

JUDGMENT

15 January 1962 in Grade 4, Step 2, of For these three methods of calculation, Category A after the retroactive entry however, the conditions laid down in into force of the Staff Regulations of paragraphs (3), (5) and (6), in the fifth 1962. subparagraph of paragraph (7) and in paragraph (8) of Article 3 continue to Following the entry into force on apply. Article 3 (3) makes provision for 6 December 1972 of Regulation No the currency in which the allowance is 2530/72 of the Council introducing special and temporary measures payable and the weighting to be applied to it by reference to Article 63 of the applicable to the recruitment of officials Staff Regulations which, in its turn, of the European Communities in refers to the parities accepted by the consequence of the accession of new Member States and for the termination International Monetary Fund in force on of service of officials of those 1 January 1965. Mr Gillet made a complaint against the fixing of the Communities, the applicant requested amount of his allowance asserting that the application of a measure effecting the termination of his service. The the system applicable in the present case was that of Article 42 or, alternatively, Commission accepted that request; the of Article 34 of the Rules and termination of his service was fixed for Regulations of the ECSC. He asked in 1 April 1973. addition that his salary be paid to him in The Directorate-General of Personnel Italian lire on the basis of the real rate of subsequently determined the amount of exchange and not the basic of the old the allowances to which the applicant monetary parity of 1965. was entitled in accordance with the By a memorandum of 7 February 1974, detailed rules laid down in Articles 1, 2 the Commission decided for the payment and 3 of Regulation No 2530/72. of the allowance to apply Article 34 of In addition to that method of the former Staff Regulations of the determining the monthly allowance, ECSC. The Commission thus accepted Regulation No 2530/72 makes provision the applicant's argument that he took up for two other much more favourable his employment under the former Staff methods of calculating the allowance. Regulations of the ECSC.

(b) which enforced the conversion of At the end of four years of non-active the amounts paid to him by way status, such servants shall receive a of allowances on the basis of the proportional pension, in accordance with the conditions laid down in the official parities accepted by the International Monetary Fund on pension scheme.' 1 January 1965. Article 42 of the same Staff Regulations provides, in respect of compulsory 2. Annul Article 5 (1) or declare it to be retirement in the interests of the service, inapplicable, and also, if necessary, that: Article 5 (2), of Regulation No 2530/72, to the extent to which it 'An official holding a post in Grades 1 to discriminates unjustly between 3 inclusive may be retired in the interests officials in service before and after of the service.

GILLET v COMMISSION

An official to whom the provisions of 'Notwithstanding the second and third Article 50 are applied and who on the paragraphs of Article 4, and Articles entry into force of these Staff 27 (3), 28 (d) and 29 of the Staff Regulations held a post in Grade 1 or 2 Regulations of Officials of the European under the former Staff Regulations of Communities, provision may be made the ECSC may request that his until 31 December 1973 for vacant posts remuneration be settled in accordance to be filled by nationals of the new with the provisions of Article 42 of the Member States up to the number of former Staff Regulations of the ECSC budgeted posts reserved for this purpose Article 50 of the Staff Regulations of the in the list of posts or made available by European Communities provides that: the application of measures for the termination of service provided for in 'An official holding a post in Grades A 1 this Regulation. or A 2 may be retired in the interests of the service by decision of the appointing However, provision may be made during the same period and under the same authority.' conditions laid down in the preceding Article 1 of Annex IV to those paragraph for vacant posts in Grades A1 Regulations provides that: and A2 to be filled by nationals of the 'An official to whom Article 41 or original Member States.' Article 50 of the Staff Regulations is Article 2 (1) provides that: applied shall be entitled: (a) for three months, to a monthly 'Until 30 June 1973, the Institutions of allowance equal to his basic salary; the Communities are authorized, in the interests of the service and in order to (b) for a period varying with his age and meet requirements resulting from the length of service in accordance with accession to the European Communities the table shown in paragraph 3, to a of new Member States, to adopt for their monthly allowance equal to: officials in Grades A1 to A5 inclusive — 85% of his basic salary form the measures terminating the service of fourth to the sixth month; officials, as provided for in Article 47 of — 70% of his basic salary for the the Staff Regulations, under the next five years; conditions provided hereinafter.'

official is entitled to the maximum Article 5 (2) provides that: pension before the age of 65, he may continue to receive the allowance until 'Officials who before 1 January 1962 the end of the month in which he held Grade A1 or A2 posts under the attained the age of 65. The basic salary Staff Regulations of the European Coal to be taken into account when fixing the and Steel Community, to whom the allowances provided for under this measures provided for in Article 4 (1) paragraph is that applicable on the first [sic] are applied, may request that their remuneration be determined in day of the month for which the accordance with the provisions of Article allowance is payable.' 42 of the Staff Regulations of the European Coal and Steel Community.' Article 3 (3) provides that: Article 63 of the Staff Regulations of 'The allowance provided for in Officials of the European Communities paragraph 1 shall be weighted, in provides that: accordance with the second subpara­ 'An official's remuneration shall be graph of Article 82 (1) of the Staff Regulations, for the Community country expressed in Belgian francs. where the recipient provides proof of It shall be paid in the currency of the residence. country in which the official performs his duties. If the recipient of that allowance resides outside the Community countries the Remuneration paid in a currency other weighting to be applied to the allowance than Belgian francs shall be calculated shall be that valid for Belgium. on the basis of the parities accepted by the International Monetary Fund, which The allowance shall be expressed in were in force on 1 January 1965.' Belgian francs. It shall be paid on the basis of the values referred to in Article 63, third subparagraph, of the Staff Summary of submissions and arguments Regulations.' A — First head of complaint (Request that the allowances be calculated Article 5 (1) provides that: in accordance with Article 42 of the Staff Regulations of the ECSC 'The officials referred to in the last of 1956) subparagraph of Article 2 of Regulation (EEC, Euratom, ECSC) No 259/68 of The applicant puts forward two the Council and in Article 102 (5) of the submissions against the refusal of the Staff Regulations, with the exception of Commission to comply with his request: those who before 1 January 1962 held — ultra vires acts by reason of Grade A1 or A2 posts under the Staff inequality of treatment, Regulations of the European Coal and Steel Community, to whom the measures — ultra vires acts by reason of provided for in Article 4 (1) [sic] are infringement of contractual agree­ applied, may request that their ments.

The applicant emphasizes the excep A1 or Grade A2 posts on 1 December tional nature, within the framework of the 1962, but, according to him, Article 99 rules concerning compulsory retirement must not be read independently of in the interests of the service, of the Article 92. scheme in Regulation No 2530/72. By making express reference to officials Although substantial equality between in Grades A1 or A2 on 31 December the situations of officials in Grades A1 to 1961, Article 99 cannot affect the A5 is expressly confirmed in Regulation contractual rights of those who later No 2530/72, in that in Article 2 it makes became A1 or A2 officials, otherwise provision for uniform treatment for all Article 99 would be illegal. A1 to A5 officials, Article 5 provides two different schemes for officials coming The judgment of the Court in the from the ECSC: one scheme is provided Pasetti-Bombardella case (Rec. 1969, p. for those who were engaged under the 235) denied the existence of a right for former scheme of the Staff Regulations officials who held Grade A3 posts under of the ECSC, whilst there is another, the scheme of the former Staff much more favourable, scheme for those Regulations to benefit from payment in who entered Grades A1 or A2 before 1 accordance with the provisions of Article January 1962. 42 which also included officials in Grade A3 among those who could be subject to It is precisely this differentation of which compulsory retirement, but that

The applicant does not deny that, The applicant maintains that, since he interpreted according to the letter, held a Grade A1 post on termination of Article 99 may militate against him, but his service, he should have had the right in that case the provision is open to the to request the application of Article 42 complaint of being ultra vires for of the former Staff Regulations of the inequality of treatment, on the one hand ECSC. because without any reason it The provisions of the former Staff discriminates between officials in Grades Regulations of the ECSC taken as a A3/A5 and those in Grades A1/A2 by whole cannot be unilaterally amended acknowledging without reservation in once they are included in a contract of respect of the former the vested right to employment. the benefits laid down by Article 34 and Once it is accepted that he was subject by refusing the corresponding benefit of to the rules of the Staff Regulations of Article 42 to officials in Grades A1 and 1956, it is no longer possible to exclude A2 who did not hold those grades on 31 him from the benefit of the application December 1961 and, on the other hand, of Article 42, on the basis of the because without any reason it arbitrary consideration that on 31 discriminates between officials of the December 1961 he held neither a Grade same grade appointed subsequently by A1 nor a Grade A2 post. causing different pension systems to

follow from the same measure — visions have in any event been properly compulsory retirement in the interests of applied to him. the service. Officials may not rely upon vested rights The illegality of Article 99 may be except when the event giving rise to the avoided by interpreting that article as right occurred within the framework of maintaining the more favourable a particular set of staff regulations, prior treatment provided for them by the Staff to the amendment decided upon by the Regulations of 1956. Community authority: opinions of Mr Advocate-General Mayras in Reinarz v The Commission, on its side, puts Commission (Joined Cases 177/73 and

ECSC. The inequality of treatment The applicant maintains that to apply to practised between the officials in Grades him the 1965 parities now would lead to A1 and A2 subject to the Staff unjustified enrichment of the Commis Regulations of the ECSC of 1956 and sion. the other officials of the ECSC is based upon Article 99 of the transitional According to the applicant, the provisions. weighting may not be regarded as compensating for the difference in The ratio juris of that provision of the parities. Its purpose is, on the contrary, Staff Regulations is to provide more or to make compensation for differences in less preferential treatment according to the cost of living. The condition for the the greater or lesser risk of loss of proper application of the weighting is

GILLET v COMMISSION

States whose currencies have been account increases in the cost of living revalued — without taking into account owing to national factors, but also other the merits of each. To follow the factors such as devaluation or Commission would lead to making it revaluation of the various currencies more advantageous for certain officials which influence the level of salaries. to have their salaries or allowances paid In order to give an example of the in Germany in order to obtain marks at weighting machinery, the Commission the 1965 rate and to change them later explains that the increase in the price of at the 1974 rate which is almost double, macaroni, spaghetti and similar products into, for example, lire or pounds in Italy was due, inter alia, to the sterling. increase in the price of the imported raw It is clear that unintentional salary material, in particular because of the disparities would thus be created depreciation in value of the Italian lira, between officials. which means that the devaluation of the

JUDGMENT OF 19. 3. 1975 — CASE 28/74

Oral procedure argument at the hearing on 5 December 1974.

The applicant, represented by Filippo The Advocate-General delivered his Satta, and the Commission, represented opinion at the hearing on 25 February by Giorgio Pincherle, presented oral 1975.

Law

1 By an application made on 3 May 1974, the applicant brought an action before the Court for annulment of the memorandum of the Commission of 7 February 1974 rejecting his request that the allowance to which he is entitled under Regulation No 2530/72 (OJ L 272, p. 1) should be paid on the basis of Article 42 of the Staff Regulations of the ECSC of 1956 and converted into Italian lire at the official rate in force at the time of the payment of the allowance.

The first head of the application

7 Although Regulation No 2530/72 made provision for different financial schemes for officials terminating their service in such circumstances, that was because its authors took into account the fact that certain of such officials benefited from the application of particular provisions of the regulations, established first of all by Article 99 of the Transitional Provisions of the Staff Regulations of Officials of the ECSC of 1962 and subsequently by the second paragraph of Article 2 of Regulation (EEC, Euratom, ECSC) No 259/68 (OJ L 56 of 4 March 1968).

8 The benefits reserved by Article 5 of Regulation No 2530/72 for officials who held Grade A1 or A2 under the scheme of the Staff Regulations of the ECSC of 1956 are a mere transposition from the Staff Regulations of 1962 and cannot consequently be regarded as discriminatory.

9 Consequently the first head of the application must be rejected.

The second head of the application

to The applicant maintains that the provision of Article 63 of the Staff Regulations, according to which remuneration paid in a currency other than Belgian francs is to be calculated on the basis of the parities accepted by the International Monetary Fund which were in force on 1 January 1965 is inapplicable to the payment of his allowance.

11 To apply these provisions now for the payment of an allowance due in Italian lire whilst that currency has been substantially devalued since the date mentioned above would, according to the applicant, infringe the principle of equality of treatment of officials and, consequently, would be illegal.

17 The second head of the application must consequently be rejected.

Costs

18 The applicant has failed in his application.

19 Under the terms of Article 69 (2) of the Rules for Procedure, the unsuccessful party shall be ordered to pay the costs.

20 However, under Article 70 of the Rules of Procedure, in proceedings commenced by servants of the Communities, institutions shall bear their own costs.

On those grounds,

Delivered in open court in Luxembourg on 19 March 1975.

A. Van Houtte A. J. Mackenzie Stuart Registrar President of the Second Chamber

OPINION OF MR ADVOCATE-GENERAL MAYRAS

DELIVERED ON 25 FEBRUARY 1975 1

Mr President, adopted on a temporary basis' to Members of the Court, encourage the recruitment of nationals of those States to Community Mr Fabrizio Gillet, who was engaged by institutions. Correspondingly it took the the High Authority of the Coal and Steel necessary measures for reducing Community in 1962, had a brilliant numbers in the higher grades in order to although relatively short career. He free certain posts. commenced his duties on 15 January Thus Article 2 of the regulation provides 1962 as a probationer at a senior level, that: as he belonged to Category A and held 'Until 30 June 1973, the Institutions ... Grade 4, Step 2. He was established on are authorized, in the interests of the the following 15 July, and finally service and in order to meet reached Grade Al with the duties of a requirements resulting from the director in the Commission. accession to the ... Communities of On the eve of the accession of the three new Member States, to adopt for their new Member States of the Communities officials in Grades Al to A5 inclusive on 1 January 1973, the Council decided measures terminating the service of by Regulation No 2530 of 4 December officials, as provided for in Article 47 of 1972 that 'special measures ... should be the Staff Regulations ...'.

1 — Translated from the French.