C-110/75

2. Officials — Disputes with the European Investment Bank — Nature of the relationship between employer and employee

3. Officials — Disputes with the European Investment Bank — Contract of employment — Termination — Material and non-material damage.

4. Officials — Disputes with the European Investment Bank — Contract of employment — Termination — Limitation

1. By its use of the words 'any dispute contract or of the Staff Regulations of between the Community and its the European Investment Bank which servants' Article 179 is not restricted are deemed to be an integral part exclusively to the institutions of the thereof the party having illegally Community and their staff but also terminated the contract must be includes the Bank as a Community ordered to compensate the other party institution established and with legal for the material and non-material personality conferred by the Treaty. damage occasioned to the latter by Under this article the Court thus has such illegality. jurisdiction in any dispute between the Bank and its servants. 4. Both the provisions of the contract 2. The system adopted for the relations and the general principles of the law between the Bank and its employees of master and servant impose limits is contractual. The contract may be on the intention of the parties. repudiated and terminated by either Termination of a contract which of the parties on the conditions laid exceeds those limits may be void and down both in the Regulations and in it will be for the court having the contract itself. jurisdiction, in this case the Court of 3. If the contract is terminated contrary Justice, to make a declaration to that to the provisions of the individual effect

EUROPEAN INVESTMENT BANK, represented by the Director of its Directorate for Legal Affairs, J. Nicolaas van den Houten, acting as Agent, having been appointed for that purpose by the President of the European Investment Bank, and assisted by Alex Bonn, Advocate of the Luxembourg Bar, with an address for service in Luxembourg at the Chambers of Mr Bonn, 22 Cote d'Eich,

defendant,

Application for the annulment of the decision, contained in the letter of 29 July 1975, to terminate the employment of the applicant at the European Investment Bank,

THE COURT

composed of: R. Lecourt, President, H. Kutscher and A. O'Keeffe, Presidents of Chambers, A. M. Donner, J. Mertens de Wilmars, P. Pescatore, M. Sørensen, Lord Mackenzie Stuart and F. Capotorti, Judges,

Advocate-General: J. P. Warner Registrar: A. Van Houtte

When the probationary period expired By an order of the First Chamber of the on 31 December 1973 the applicant was Court of 19 February 1976, the case was remitted to the full Court. appointed from 1 January 1974 for an indefinite period. Upon hearing the report of the By a letter of 29 July 1975 the Bank Judge-Rapporteur and the views of the informed the applicant that for reasons Advocate-General, the Court decided to pertaining to its internal organization his open the oral procedure without a contract of employment would be preparatory inquiry. terminated in accordance with Articles 16 and 17 of the Staff Regulations of the The parties were requested to restrict Bank on 31 October 1975. For the their submissions to: period from 1 August to 31 October 1. The jurisdiction of the Court in the 1975 he was to receive under Article 16 present case; of the Staff Regulations of the Bank a 2. The admissibility of the claim that the compensatory payment of an amount measure should be annulled. equal to that of his remuneration in the course of that period together with the severance grant provided for in Article 34. It was added that the applicant would II — Conclusions of the parties be entitled to a resettlement allowance if he changed his residence, to the costs of The applicant claims that the Court removal to one of the countries of the should: common market and to travel expenses. — annul the decision of 29 July 1975 In addition the Bank declared that it was whereby his employment was prepared, if it received before 15 August terminated as from 31 October and

The defendant contends that the Court The defendant points out that the should: authors of the Staff Regulations of the — declare that it has jurisdiction; Bank intended to exclude from the — take formal note that the defendant jurisdiction of national courts any does not intend to impugn the disputes which might arise between the admissibility of the application as to Bank and its staff. form; — rule that the main conclusions of the The Staff Regulations of the Bank, it is application are inadmissible as to stated, established an independent system substance or alternatively that they separated from the national framework of are unfounded; the Member States, in accordance — further rule that the alternative furthermore with Article 15 of the conclusions of the application are Protocol on the Privileges and unfounded; Immunities of the European — take formal note that so far as Communities which also applies to the necessary the defendant disputes the staff of the Bank (Article 22 of the amounts claimed; Protocol). — dismiss the application; — make an order as to costs in The Staff Regulations of the Bank were accordance with the relevant adopted in accordance with Article 29 of provisions. the Rules of Procedure of the Bank and Article 9 (3) (h) of the Protocol on the In the rejoinder it contends that the Statute of the European Investment Bank Court should: the latter of which forms an integral part — Reject the submissions and of the EEC Treaty (EEC Treaty, Article explanations contained in the reply; 239). — more particularly dismiss the various It is in accordance with what was requests for the' production of documents; intended in the Statute and is also logical — Dismiss the claim that Mr Bearne that Article 41 of the Staff Regulations of and Mr Butler be heard as witnesses; the Bank provides that disputes between the Bank and members of its staff should — Rule that the conclusions as set out in the reply are inadmissible or be brought before the Court of Justice as otherwise unfounded; by their nature they come within the — Grant the defendant the benefit of Community sphere. the conclusions set out in its defence. Since the Bank is not one of the institutions listed in Article 4 of the EEC Treaty, Article 179 of the Treaty III — Submissions and argu­ conferring jurisdiction on the Court in ments of the parties disputes between the Community and its servants is not literally applicable to it. A — Jurisdiction of the Court of Nevertheless, since the Bank and its Justice servants have the same interest as the Community in protection by the courts, The applicant refers to the first this lacuna may be filled by a wide paragraph of Article 41 of the Staff interpretation of Article 179 or by its Regulations of the European Investment application by analogy. Article 180 of the Bank which provides 'Disputes, of any EEC Treaty governing the jurisdiction of nature, between the Bank and individual the Court in certain matters relating to members of staff, shall be brought before the Bank does not militate against such the Court of Justice of the European an interpretation since the list cannot be Communities'. considered as exhaustive.

According to the defendant the an indefinite period may be terminated jurisdiction of the Court is furthermore by either party on condition that the based on Article 12 (a) of the Protocol on agreed period of notice is observed. the Privileges and Immunities of the Either party may thus exercise his European Communities in accordance contractual right to terminate the with which officials of the Community contract since the other party is obliged are immune from legal proceedings in to recognize this. Any dispute can only respect of acts performed by them in relate to the lawfulness of the their official capacity subject to the termination of the contract so that any application of the provisions on the claims the parties may have are satisfied jurisdiction of the Court of Justice by compensation. Consequently a party referred to above. This reservation can cannot be heard to request a court to only be given full effect if the annul the measure terminating the jurisdiction of the Court is also contract and a fortiori an applicant recognized with regard to the officials of cannot be heard to request a court to the Bank. reinstate him in a post which he no

The reinstatement of the applicant in his post B — Admissibility is justified both as the logical and natural result of the annulment of the decision In its defence the defendant disputes the and as the normal method of admissibility of the substance of the compensating the injury occasioned to main conclusions of the application. the applicant. Even if the legal relationship between the Bank and its It recalls that its staff is engaged under staff is one of private law the Court of contract of which the Staff Regulations of Justice can by applying the 'general the Bank constitute an integral part. The principles' concerning private master and Bank intentionally opted for contracts servant relationship at least suggest the and more specifically for contracts of reinstatement of the applicant even if it employment under private law (see is unable to require it. Annex 4 to the defence). In the rejoinder the defendant sustains Any disputes which might arise would its argument and adds that even if the occur and must be considered in the applicant's argument as to the 'statutory' context of private law, in particular with nature of the appointment is conceded regard to the appraisal of the conditions the claim for annulment and of dismissal. This is how the reference in reinstatement are equally inadmissible. Article 44 of the Staff Regulations of the In fact in that case the 'statutory' Bank to the general principles common appointment could, in accordance with to the laws of the Member States should the provisions governing it, be

JUDGMENT OF 15. 6. 1976 — CASE 110/75

being given. This would therefore be a 3. When a document urgently required 'statutory' relationship which was to be translated during the weekend of essentially temporary and not permanent. 5 and 6 April 1975 Mr Thiebaut The Court cannot annul a decision to deliberately withheld it from the terminate that relationship in accordance applicant on the ground that his with the relevant provisions and collaboration would have been

MILLS v INVESTMENT BANK

He concluded that article refers to the general in his report that there was principles common to the laws of the insufficient evidence to maintain that Member States, in particular with regard the applicant had not done the to dismissal, and also because of the lack translation himself. The defendant or inaccuracy of the statement of reasons took no formal note of the accusation and because the action taken is ultra in question and took no action as a vires. The decision is purportedly result of it. justified by the need for internal 3. If the third allegation is correct the reorganization and in fact it consists of incident relating to the weekend in the dismissal of a single employee with question merely confirms the family responsibilities and with more unfavourable appraisal previously seniority than others of his colleagues issued. carrying out the same duties. The defendant states that the applicant's He claims that it is generally recognized behaviour at work caused difficulties.

The output per person per day fell from 2-56 pages Facts during the last nine months of 1973 to a mere 1-52 pages during the first ten The defendant submits the following month of 1975, that is a drop of 41 %. observations with regard to the points of fact relied upon: Since one post in this section was 1. The problem reported by the superfluous the Bank decided to dispense applicant received the attention of the with the services of the applicant on two Secretary-General. The unfavourable grounds: on the one hand in accordance appraisal of the applicant's work was with the appraisals of his work he was

The defendant maintains that its actions It is true that since the Management Committee understood the anxiety of have been entirely lawful and that its decision cannot be criticized. applicants for posts and of members of staff of British nationality arising from First submission uncertainty relating to the Referendum it decided that such persons might follow a normal career at the Bank if the United The defendant disputes that the dismissal Kingdom withdrew from the EEC and of the applicant constitutes a disciplinary measure. It availed itself of its contractual from the Bank. (Decision recorded in minutes CD 40 — PE 9/1975 of 19 right to terminate the contract and March 1975). This decision was Article 38 et seq. of the Staff Regulations communicated to the British subjects was thus inapplicable. and in no way referred to the applicant in particular. In the present case the Bank solved the abovementioned problem of internal organization on the basis of the Appointment at the European Invest­ information in its possession and to the ment Bank best of its judgment. The appraisals made in this connexion must be regarded as An appointment at the European final and are not subject to review by the Investment Bank is made by letters Court. expressly stating that the Staff Regulations of the Bank constitute an The complaint of misuse of procedure integral part of the contract of and of powers must be rejected as employment. Before entering the service completely lacking in justification and in candidates are requested, at the same evidence since the reasons relied upon in time as they sign the copy of their letter the contested letter constitute the real of appointment, to acquaint themselves ground of dismissal. with the Staff Regulations and sign a copy of them also, appending above their With regard to observing the rights of signature the holograph declaration: the defence the defendant refers to its 'Read and approved'. statement above on the points of fact.

With regard to the 'restrictions relating requests that there be communicated the to both the economic and the social reports drawn up with regard to the other aspects' the defendant considers it members of the English translation difficult to subscribe to the existence of section together with any other such a principle. In the legal systems of documents which were used in drawing Member States which recognize improper up the comparison of the qualifications, services and merits which, in the dismissal on the grounds that it is unlawful or economically or socially defendant's view, justified the dismissal. indefensible the improper dismissal In addition the applicant requests the nevertheless stands and can only give rise Court to order the production of the to compensation. questionnaires relating to the definition of duties completed by the members of Even on the supposition that the the section, the report drawn up on the applicant may properly rely on concepts basis of those questionnaires" by the Head of administrative law the defendant of the Organization and Methods Section disputes that any of its actions may be together with all documents constituting considered to have been ultra vires. the decision taken regarding this report by the responsible officers of the Bank. With regard to the complaint concerning the lack or inaccuracy of a statement of The applicant maintains that it does not reasons the defendant maintains that in follow from any document that Mr this respect the contested decision Thiebaut and Mr Davison were the entirely fulfils any possible obligation immediate superiors of the other since it expressly gives the ground for the members of the section or that they were dismissal. capable of appraising the work of the latter. If such documents exist it is for The argument of the applicant that the the defendant to produce them and to dismissal of a single employee does not prove that they were brought to the constitute a measure of internal notice of the 'lower ranks'. reorganization is unfounded in fact: the ground relied upon was the internal The legal relationship between the organization of a section containing too Bank and its staff many employees. In its reference to the provisions of the With regard to the social aspect the EEC Treaty (Articles 129, 130, 180 and defendant states that no national legal 239) and to the Protocol on the Privileges system compels employers to give and Immunities of the European

Communities (Article 22) the applicant this connexion he requests the Court to claims that the Bank indisputably has hear the evidence of Mr Bearne and Mr legal personality in public international Butler, members of the staff. The law. According to Article 29 of the Rules applicant does not dispute that the of Procedure of the Bank the staff come volume of work may have diminished as under a 'statutory' system, the provisions a result of various circumstances but he of which are adopted and amended by remarks that in the past the Bank has the unilateral decision of the Board of never used dismissal for the purpose of Directors. The legal relationship between the internal reorganization of the service. the Bank and its staff is of an essentially Furthermore the measure taken 'statutory' nature since all the factors concerning him constitutes a direct which determine this relationship may contradiction of the assurances given by be amended at any time in the interests the Management Committee to the of the service. Accordingly the reference British members of the staff. to the concept of an individual contract is inadequate if not altogether With regard to the violation of the superfluous. In any case if there is a principles and rules relied upon contract it can only be under public law. Even if the measure complained of were The substance of the legal relationship between the Bank and the members of justified for reasons relating to internal its staff is related to the substance organization, which the defendant has failed to establish, the decision to dismiss accorded to such relationships in the the applicant was taken because public service, both national and international. unfavourable appraisals were made of his mode of work and of his conduct. Since In the present case the relevant this measure is thus a disciplinary one it provisions of the Staff Regulations of the adversely affected the applicant and the Bank must be supplemented by the defendant was obliged to respect his general principles common to the laws of rights of defence. Nevertheless the the Member States with regard to the contested decision was adopted in public service, in particular by the reliance solely on judgments made on following principles: the applicant by two colleagues. By doing — the duty of the authority to provide this the defendant has failed to observe an accurate statement of reasons for the right of the applicant to have a full decisions adversely affecting inquiry into his case and has infringed employees; the right of the latter to be heard in the — respect for the rights of the defence proceedings. including in particular the right of an official to a full inquiry into his case Since the applicant was never acquainted and for the right of both sides to with the report in question he did not present full arguments in the have an opportunity of furnishing proceedings; appropriate explanations. — the right of an employee to protection against threats from third Likewise the authority neither exhausted parties including threats made by his all the means of inquiry nor for example superiors; did it question all members of the — the rules of good administration and relevant section or arrange for the parties fair procedure. concerned to meet face to face.

the service. In any case the legal relationship between the Bank and its staff is purely a Rejoinder contractual one and in this respect it is irrelevant that the employer is a person Regarding the legal relationship under public law whose tasks and between the Bank and its staff activities are determined by Community law. In the legal systems of the Member The defendant considers that the States it is also accepted that officials or arguments of the applicant regarding the servants of public authorities do not legal relationship between the Bank and necessarily come under a 'statutory' its servants are irrelevant: whether that system (examples page 11). relationship is a 'statutory' or a contractual one and in the latter case As regards the principles applicable in whether the contract is one under public the present case law or under private law, the fact remains that the appointment of the applicant Since the relevant contracts are under was for an indefinite period and could be private law the two parties enjoy the terminated. contractual right of terminating the appointment by due notice given. The The argument expounded in the reply sole point open to discussion is whether should be rejected on the following the exercise of the right can be grounds: influenced by the effect of the general principles common to the laws of the The fact that the Bank is a person under Member States (Article 44). Indeed the public law within the context of the wording of Article 44, which again Community in no way implies that all employs the words 'individual contract', contracts to which it is a party are makes it clear that the principles referred contracts under public law (vide the to there are the principles of the law examples on pages 4 and 5). relating to master and servant, that is to say the principles governing similar legal measures in the national legal systems. With particular regard to the staff of the The note of 15 March 1960 previously Bank the defendant refers to the note of referred to confirms this conclusion. 15 March 1960 (Annex 4 to the defence) in which the Management Committee Examination of this subject makes it explained why it proposed a contractual clear that most of the legal systems of the system for its servants and employees as Member States appear to concede that a whole. In accordance with these ideas employers may not carry out improper the Staff Regulations of the Bank provide dismissals. According to Luxembourg law for appointments by contracts under dismissal is improper if 'it is carried out private law (Articles 13, 15 and 16). for unlawful reasons or if it constitutes a

Of the principles upon which the The request to take the evidence of applicant relies the only one which can witnesses must be rejected since such be found in private law is the duty to problems and questions are not a fit state the reasons for the decision of subject for inquiry. Furthermore it would dismissal at the request of the employee. scarcely be advisable to conduct an This duty was fulfilled in the present inquiry in which members of the same case. service were encouraged to denigrate one another and perhaps to side with or Furthermore the defendant maintains its against a former colleague or a superior. arguments set out in the defence in particular its explanation of the reasons Furthermore the defendant disputes the for the dismissal in dispute. accuracy of the facts relied upon in the reply (page 17 paragraph 2) as well as the With regard to the request for the relevance in law of the line of argument. production of the reports relating to the applicant the defendant refers to the Alternatively, if the principles relied personal file lodged at the Court of upon by the applicant are applicable to Justice. It emphasizes that the procedure the present case, the defendant points selected by the Bank with regard to staff out that all duties have been fulfilled and reports does not include communicating that the rights of the defence have been those reports to the members of staff respected. There never were any threats concerned for their counter-signature. from third parties and in any event the defendant did not accept any complaints It is impossible to accede to the request made against the applicant without for the production of reports drawn up carefully checking them. on the other members of the section. Such reports cannot be produced in a As a further alternative point if the Court dispute which does not relate to those of Justice declares that the dismissal of persons. Furthermore reports which have the applicant was improper or unlawful the defendant considers the main neither been submitted nor com­ municated to the persons concerned conclusions as inadmissible (see under themselves cannot be communicated to 'Admissibility') or as unfounded. third parties. With regard to the alternative The defendant has no objections to conclusions the defendant disputes the transmitting to the Court the sum claimed as unfounded and in any questionnaire completed by the applicant case excessive. but those of the other members of the section should remain strictly confidential. Furthermore the report IV — Oral procedure drawn up on the basis of those questionnaires had no effect on the The parties presented oral argument on disputed decision of dismissal. 1 April 1976.

4 It is thus necessary first to consider the jurisdiction of the Court and then the admissibility of the application for annulment.

The jurisdiction of the Court

5 According to Article 179 of the Treaty establishing the European Economic Community: The Court of Justice shall have jurisdiction in any dispute between the Community and its servants within the limits and under the conditions laid down in the Staff Regulations or the Conditions of Employment'.

6 It is accordingly necessary to ascertain whether the defendant must for the purposes of this article be considered as forming part of the Community.

7 Title IV of Part Three of the Treaty on the policy of the Community is devoted to the European Investment Bank.

JUDGMENT OF 15. 6. 1976 — CASE 110/75

14 It must thus be concluded that by the words 'any dispute between the Community and its servants' Article 179 is not restricted exclusively to the institutions of the Community and their staff but also includes the Bank as a Community institution established and with a legal personality conferred by the Treaty.

15 This conclusion is not invalidated by the fact that Article 180 of the Treaty contains a special provision relating to certain disputes of the Bank.

16 This provision merely confers upon the Board of Directors of the Bank powers analogous to those conferred upon the Commission by Article 169 and renders measures adopted by the Board of Governors and those adopted

MILLS v INVESTMENT BANK

by the Board of Directors subject to the same jurisdiction of the Court of Justice as that conferred by Article 173 with regard to the measures of the Council and of the Commission.

17 This complementary nature of Article 180 thus confirms the conclusion that when in Article 179 mention is made of the Community this does not exclude the Bank.

22 The system adopted for the relations between the Bank and its employees is thus contractual and is accordingly founded on the principle that individual contracts concluded between the Bank and each of its employees constitute the outcome of an agreement resting on mutual consent.

JUDGMENT OF 15. 6. 1976 — CASE 110/75

23 It follows from this that the contract may be repudiated and terminated by either of the parties on the conditions laid down both in the regulations and in the contract itself.

24 If the contract is terminated contrary to the provisions of the "individual contract or of the regulations which are deemed to be an integral part thereof the party having illegally terminated the contract must accordingly be ordered to compensate the other party for the material and non-material damage occasioned to the latter by such illegality.

25 Nevertheless although the continuation of the contract depends above all on the mutual consent of the parties which constitutes the basic condition for the existence of the contract, this does not prevent both the provisions of the contract and the general principles of the law of master and servant, to which the last article of the Staff Regulations of the Bank refers, from imposing limits to this intention of the parties.

26 A termination of a contract which exceeds those limits may be void and it will be for the court having jurisdiction, in this case the Court of Justice, to make a declaration to that effect.

questions considered above might be decided.

31 Since the Court has settled those questions the case must thus be remitted to the First Chamber in order that it may consider the substance of the case and arrive at a decision thereon.

Costs

32 The costs must be reserved.

On those grounds,

THE COURT,

Pescatore Sørensen Mackenzie Stuart Capotorti

Delivered in open court in Luxembourg on 15. June 1976.

A. Van Houtte R. Lecourt

Registrar President