C-50/74

Commission of the European COMMUNITIES, represented by its Legal Adviser, Giorgio Pincherle, acting as Agent, with an address for service in Luxembourg at the offices of its Legal Adviser, Pierre Lamoureux, 4 Boulevard Royal,

and

Council of the European COMMUNITIES, represented by Daniel Vignes, Adviser in the Legal Department, acting as Agent, assisted by Antonio Sacchettini, Adviser in the Legal Department, acting as Co-agent, with an address for service in Luxembourg at the offices of J. N. Van den Houten, Director of the Legal Department of the European Investment Bank, 2 Place de Metz,

defendants,

Application for the annulment of the decision of the Commission of 1 April 1974, rejecting a complaint of the applicants against the granting of a sum of 600 000 units of account solely in favour of local staff and establishment staff at Ispra, and an application for damages,

ASMUSSEN v COMMISSION AND COUNCIL

The facts of the case, the procedure, the The measures put forward by . the conclusions and the submissions and Commission to achieve these objectives arguments of the parties may be were examined by the Committee of summarized as follows: Permanent Representatives at its meeting on 31 January 1973.

I — Facts At its 226th meeting, held in Brussels on 5 February 1973, the Council, with At its 204th meeting, held in Brussels on regard to the allocation of the amount of 20 July 1972, the Council of the Euro­ 600 000 units of account as between local pean Communities, with regard to the staff and establishment staff at Ispra to be future rules relating to staff of Categories granted in the form of differential C and D paid from the appropriations allowances, gave its approval, without for research and investment, approved discussion, to the measures put forward the granting to the Commission of an by the Commission and set down the overall budgetary provision of 600 000 following basic figures: units of account to enable it, first, to (a) Financial measures to benefit a improve the financial situation of local certain number of local staff at Ispra staff at Ispra, while leaving unchanged (approximately 120), carrying out their legal status. Moreover, it was agreed duties of a level identical to those of that the Commission would examine, the two highest grades of establish­ with the Committee of Permanent ment staff: 150 000 u.a., Representatives, whether, within the In this connexion also some limit of this 600 000 units of account, instances of establishment staff who improvements should also be made for were undergraded (approximately 10) certain establishment staff at Ispra on could be regularized as well: 20 000 condition that serious divergences of u.a.;

(c) Financial measures allowing a salary The written procedure followed the increase (averaging 7 to 8 %) for all normal course. local staff and establishment staff at the Ispra centre: 388 000 u.a. (307 On hearing the views of the Advocate- local staff, 421 establishment staff). General the Court (Second Chamber) decided to open the oral proceedings In accordance with Article 90 (1) of the without any preparatory inquiry. Staff Regulations the applicants on 3 April 1973 lodged a request with the Commission that the increase in salary III — Conclusions of the parties granted to establishment staff at Ispra should be extended to all establishment The applicants claim that the Court staff. should: — annul the decision of the Com­ This request was rejected by the mission dated 1 April 1974; Commission on 8 August 1973. — rule that the Council should pay Pursuant to Article 90 (2) of the Staff them an allowance equal to the Regulations, the applicants by a memor­ increase in salary granted to the andum of 29 October 1973, registered establishment staff at Ispra in the on 30 October, brought before the same position under the Staff Commission a complaint against its Regulations as themselves, refusal to grant their request of 3 April — order the defendants to pay the costs. 1973. The Commission contends that the Court This complaint was rejected by the Com­ should: mission which informed the applicants — rule that the application is inad­ accordingly by letters of 1 April 1974, missible or unfounded; which reached them between 18 April — order the applicants to pay the costs. and 24 May. The Council contends that the Court In the letters the Commission confirms should: in full the terms of its reply of 8 August — reject the application on all its 1973 to the effect that in its decision of arguments; 20 July 1972, the Council expressly — order the applicants to pay the costs. specified amongst which staff the appropriation of 600 000 units of account made available to the Commission was to IV — Submissions and arguments be distributed; the Commission was only of the parties during the able to implement this decision without written procedure varying it in any way. In addition, the Commission assured the applicants that A — Admissibility some time before it had already brought before the Council proposals particularly The Commission argues that by its aimed at eliminating disparity in the decisions of 20 July 1972 and 5 February conditions of employment of different 1973 the Council had fixed the allo­ categories of staff. cation of the 600 000 units of account and that the Commission itself had no option to vary this allocation or to desist II — Written procedure from implementing these decisions; the purely executory measures which it had The joint application of the 59 applicants to take could not have affected the was deposited at the Court Registry on applicants adversely. Therefore the 10 July 1974. Commission took no decision which

caused them any harm and it cannot be decision annulled and obtaining damages found guilty of any conduct contrary to commensurate with his loss. the rights which the staff possess under the rules applicable to them. An annulment order would have the effect of rendering inapplicable not the In addition, the position of the appli decision to determine the amount of the cants is so ambiguous that their appli remuneration of the establishment staff cations are void for want of a sufficient but the separable decision to allocate the interest The applicants in fact claim that ascertained sums only between the the Commission misused its powers in establishment staff at Ispra; thus the granting to the establishment staff at decision can only be implemented by an Ispra an increase in salary without any allocation for the benefit of all the justification based on local circumstances establishment staff thereby re-estab but seek to have granted to them an lishing the balance on a secondary level. allowance equal to these very financial

practice. The existence or absence of circumstances which can affect only B — Substance persons working at Ispra can therefore produce no effect on the rights of 1. The application for annulment establishment staff working in Karlsruhe; therefore the latter cannot prove a The . applicants maintain that the sufficient legal interest in taking decision of the Commission of 1 April proceedings in a case which does not 1974 infringes Article 94 of the concern them. Conditions of Employment of Other Servants and is void for misuse of powers. The applicants believe that the restrictive interpretation of a legal interest in taking (a) On 20 July 1972 the Council proceedings relied on by the Com authorized the Commission to allocate mission does not conform to the usual an overall budgetary provision of 600 000 interpretation of this concept adopted by units of account in order, in the first

JUDGMENT OF 30. 9. 1975 - CASE 50/74

undertake not only a readjustment of the staff. For this latter operation, the salaries of the local staff but also various Commission did not need special other operations including in particular a permission from the Council since it had general increase in salaries for all local received the necessary appropriation at staff and establishment staff at Ispra. the time of the decision of 20 July 1972 and the appropriate powers were The Commission thereby went beyond conferred on it by Article 79 of the the powers conferred upon it by the Conditions of Employment of Other Council and moreover created discrimi­ Servants. The intention to avoid further nation between the establishment staff at discrimination between local staff and different places of employment. establishment staff at Ispra caused the Commission to ask the Council that the (b) Even if the Commission acted establishment staff might receive the within the scope of the powers conferred same increase; because of the particular by the Council, Article 94 of the situation of the Ispra establishment, the Conditions of Employment of Other remuneration of the two categories of Servants of the Community placed it staff has always been calculated on the under an obligation to take into account same criteria.

ASMUSSEN v COMMISSION AND COUNCIL

of Article 94 of the Conditions of Employment of Other Servants relies on The applicants adduce not the slightest excessive regard for formalities. The proof of the existence of discrimination Council attaches more weight to the fact against them either with regard to their that the remuneration shall be deter right to receive the same increases or the mined 'at each place of employment' same remuneration as the establishment than to the fact that it must 'take into staff at Ispra or as to their lagging behind account local practice'; in addition this the latter. expression refers rather to certain details of the remuneration (monthly basis, In their reply, the applicants take note of weekly payment, existence of a salary the declaration of the Council that its scale etc.).

Italy. Other factors also had to be Article 94 of the Conditions of Em considered. Nevertheless the Council has ployment of Other Servants gives the not found any substantive rule to be Council the right to determine different followed in this respect either in Article conditions of remuneration for each 94 of the Conditions of Employment of place of employment but places it under Other Servants (for establishment staff) or an obligation to do this within the limits in Article 79 (for local staff). Therefore of local practice; these conditions the decisions of the Council of 20 July comprise essentially the methods of 1972 and of 5 February 1973 infringe no calculation and the amount of legal provision. remuneration and not merely subsidiary

JUDGMENT OF 30. 9. 1975 - CASE 50/74

. .' that the text referred to precludes any automatic conversion of The extremely restrictive interpretation local practice into a legal provision. relied on by the applicants of the notion Furthermore, the extent of the concept of of 'local practice, which the Council local practice can only be assessed after must 'take into account' in particular for taking into account what is the object of determining the conditions of the rules in each case. In particular it remuneration, conflicts with the actual would appear difficult to accept that the wording of Article 94 of the Conditions remuneration of establishment staff at of Employment of Other Servants. The Ispra can only vary according to factors Community authorities have already exclusively limited to the situation of this applied a different interpretation by establishment to the complete exclusion working, for the remuneration of the staff of other points of comparison, such as at Ispra, on the basis of the the purchasing power of salaries in the 'metalmeccanici' agreement which is a region in question and the movement of national collective agreement; the same salaries on a general level in the country interpretation has been retained with where the establishment is situated. regard to the salary increases in question.

Permanent Representatives, in the Doubtless, Article 94 of the Conditions presence of the Commission, within the of Employment of Other Servants does framework of faithful implementation of not provide for the mathematical the mandate conferred and by a equality of remuneration at the differ procedure which was not challenged and ent establishments while permitting which could not be challenged. The inequality at a primary level because of mandate was carried out and not the differences in local conditions; exceeded. however this inequality at a primary level is counterbalanced by an implied With regard to the complaint of requirement of equality at a secondary infringement of Article 94 of the level under the general principle of Conditions of Employment of Other equality of treatment. This equality at a

secondary level implies that identical With regard to the alleged responsibility criteria for determining remuneration of the Commission for having shall be applied to different situations; disappointed the legitimate expectations the principle was breached once the of the applicants it should be noted that Council ceased to work on the basis of the applicants have given no evidence of changes in the remuneration of the any misconduct on the part of the 'metalmeccanici'. Commission or even suggested it. The Council maintains that it cannot be In addition, the Commission bears the accused of misuse of powers in this case; responsibility for having disappointed, furthermore it has not been guilty of any albeit involuntarily, the ligitimate breach of the principle of non- expectations of the applicants, in giving discrimination or of upsetting a balance as its grounds for its refusal to grant their at any level. application merely the statement, which has been contested by the Council, that The Staff Regulations of Officials and the the distribution of the overall budgetary Conditions of Employment of Other provision conforms to the decision of the Servants ensure a prohibition on Council of 20 July 1972, without any discrimination but also provide reference to the decision of 5 February exceptions for certain categories of 1973, which is claimed to modify the servants because of the special nature of former decision. the conditions to be observed when they are appointed; this applies to Article 94 The Commission states that the first part of the Conditions of Employment of of the request for compensation does not Other Servants. Since they are provisions concern it directly. So far as the point is derogating from the general rule relevant, however, it observes that the according to the different places of difference in the salaries paid to the employment, any automatic and establishment staff at Karlsruhe and at simultaneous adaptation of the remuneration of servants at different Ispra arises from the rules to which these establishments is inconceivable; it would officials are subject because of their place of employment The proof is that only be possible from a highly the establishment staff at Ispra did not improbable coincidence of the various demand to be granted the more elements of local practice which the Council must take into account. substantial increases which their counterparts at Karlsruhe have received from 1971 to the present day. V — Oral procedure In this case therefore there is no The parties submitted their oral obser­ discrimination; moreover the applicants vations at the hearing on 29 May 1975. have shown no objective proof of the discriminatory treatment which they The Advocate-General delivered his claim to have suffered. opinion at the hearing on 26 June 1975.

3 It is therefore necessary in the first place to establish what is the subject- matter of this action.

4 On 20 July 1972 the Council consented to make available to the Commission an overall budgetary provision of 600 000 units of account in order to improve the financial situation of local staff and of certain establishment staff at Ispra.

5 Following an exchange of views between the Commission and the Committee of Permanent Representatives, and acting on a proposal of the Commission, the Council on 5 February 1973, set out in detail the distribution of this overall budgetary provision specifiying on the one hand the staff who were to benefit and on the other hand the amounts to be granted to each of the categories of staff thus defined.

6 On 3 April 1973 the applicants brought before the Commission a request that the benefit of the increase in salaries granted to the establishment staff at Ispra should also be granted to establishment staff at other establishments of the Joint Research Centre.

7 Since this request was rejected by the Commission on 8 August 1973, the applicants, by a memorandum of 29 October 1973, registered on 30 October, brought a complaint before the Commission against its refusal to accede to their request.

ASMUSSEN v COMMISSION AND COUNCIL

14 For its part, the Council has raised no objection as to admissibility.

15 While substantial doubts may arise with regard to the admissibility of the application, particularly with regard to the failure to specify the subject-matter thereof, nevertheless it should be taken into consideration that this ambiguity arises principally from the methods adopted in coming to the decision in this case; these were such that the measure in question took shape gradually with two institutions, the Council and the Commission, being involved and with the Committee of Permanent Representatives acting as intermediary.

16 In these circumstances it was particularly difficult for the applicants, ill informed of the progress of the decision concerning them, to know to which

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institution they should apply and to decide at what moment action on their part could affect a measure which might seem to them not to be open to challenge.

17 For this reason there cannot be held against them the fact that they acted simultaneously against the Council and the Commission, that they addressed their initial complaint to the Commission alone, which is their direct employer, and that they chose as the subject-matter of their application, preparatory measures which gave rise to implementing decisions only after the application had been brought.

ASMUSSEN v COMMISSION AND COUNCIL

23 It appears from this sequence of events that the decision of 20 July 1972 was, on the part of the Council, only in the nature of a preparatory decision on principle so that the decision of 5 February 1973 must, for the appreciation of the situation submitted to the Court, be regarded as expressing the final will of the Council.

24 This submission must therefore be rejected.

25 Secondly, the applicants maintain in support both of the action for annulment and of the action for compensation, that the Council and the Commission went beyond the scope of the measures permitted by Article 94 of the Conditions of Employment of Other Servants of the Communities with regard to remuneration, in favour of the establishment staff at Ispra.

26 More precisely they argue that this provision places the institutions under an obligation to determine the salary scales taking into consideration 'local practice'.

27 For the establishments other than that at Ispra, this local practice had been defined by reference to the remuneration of comparable staff employed in national research centres whereas in the absence of such a centre in Italy, they had been determined by reference to the collective agreement of workers in the metal and engineering sector (metalmeccanici).

(b) the allowances, insurances, social security benefits and other similar benefits of whatever kind to which they shall be entitled.'

32 It is clear from this article, in the first place, that the conditions relating to remuneration are determined specifically 'at each place of employment'.

33 Secondly, it appears that the taking into consideration of 'local practice' need amount to no more than a motivation, that is to say, a simple guide-line which in no way excludes the taking into consideration of other factors.

34 Thus, Article 94 confers on the competent institutions a wide discretionary power to adapt the conditions relating to remuneration of the local staff and of the establishment staff to the particular local circumstances of each of the establishments in question, taking into account the requirements which arise both from the internal working conditions of these establishments and from the considerations resulting from the economic and social situation within which the staff are placed.

35 Criticism may be levelled against the provisions adopted to this end in the light of a comparison with the conditions relating to remuneration of staff employed in the establishments within other Member States, only if it is established that there is, to the detriment of such staff, a misuse of powers committed by the Council and by the Commission in exercising the discretion granted to them by Article 94.

36 However, the applicants have adduced no proof showing that the competent institutions decided on the basis of factors apart from those which Article 94 allows or committed such a misuse of powers.

On those grounds,

THE COURT (Second Chamber)

hereby:

1. Dismisses the application;

2. Orders each of the parties to bear its own costs.

Mackenzie Stuart Pescatore Kutscher