C-114/77

1. Although any adjustment of re­ terms of Article 65 (1) were to lead, muneration by the adjustment of the as regards those pecuniary rights, to basic salaries in the table contained results different from those flowing in Article 66 would appear to be from an increase in the amounts more consistent with the procedure shown in the table in Article 66 of laid down in Articles 64 and 65, the the Staff Regulations. Council is nevertheless at liberty to raise the level of remuneration by 2. The basic salary as referred to in applying a weighting to the amounts Article 66 of the Staff Regulations in the table in Article 66, providing comprises the amounts included in always that as regards the pecuniary the table contained in that article, rights of officials such method does not lead to results which are subject, where appropriate, to the incompatible with those intended by weighting adopted for the pro­ the procedure laid down in Article visional seats by the Council 65. This would be the case if the following the annual review provided application of weightings under the for in Article 65 (1).

In Case 114/77

Claude JACQUEMART, a former official of the Commision of the European Communities, residing at 7 Place Pinel, Paris 75013, assisted and represented by Ernest Arendt, Avocat-Avoué, residing at 34b Rue Philippe II, Luxembourg, with an address for service in Luxembourg at the Chambers of the said Ernest Arendt, applicant,

1 — Language of the case: French.

JUDGMENT OF 13. 7. 1978 — CASE 114/77

v

gives the following

JUDGMENT

Facts and Issues

The facts and the arguments developed to accept his resignation,-which was by the parties during the written done with effect from 1 September procedure may be summarized as 1976. Since he was under 60 years of follows: age and had less than ten years' service, the applicant was not entitled to a retirement pension within the meaning I — Facts and procedure of Article 77 of the Staff Regulations but had a right to the severance grant After joining the Commission on 7 provided for in Article 12 (c) of Annex November 1966 as an official in Grade VIII to the said Regulations "calculated A 3 and subsequently being promoted to on the basis of one and a half months Grade A 2, the applicant, by letter dated for each year of service of the last basic 25 March 1976, asked the Commission salary before deductions".

JACQUEMART v COMMISSION

that: "When the annual pay review for 1 (2) and provided for a second the reference period from 1 July 1975 to increase, which in the present case 30 June 1976 is held, the current brought the amount of the basic weighting for Belgium and Luxembourg monthly salary of officials in Grade A 2, shall be incorporated into the salary step 3 to Bfrs 182 735, and Article 5 (2) scales in accordance with the procedure provieded that from that date the set out in Section II (6) (c), the

A statement That decision was implemented by on this basis was forwarded to the Council Regulation No 3177/76 of 21 applicant on 27 January 1977. The December 1976 (Official Journal L 359, applicant took the view that by not p. 1), one of the recitals of the preamble applying the weighting the decision to which states that "the Council, in its adversely affected him and on 22 decision of 29 June 1976, fixed the February 1977 submitted a complaint method of calculation to be used in the within the meaning of Article 90 of the periodical reviews of the remuneration Staff Regulations to which he received of officials and other servants of the no reply within the period of four Communities". months. Not until 12 July 1977 was a letter sent to the applicant refusing his The said regulation effected the

grade). Under Article 5 of the said regu- Commission that Article 12 of Annex

Substance II — Conclusions of the parties A — The application The applicant claims that the Court The applicant states that the Council should: has on several occasions and in

(1) —Declare that this application is particular in July 1976 infringed Article admissible; 65 of the Staff Regulations.

(2) As to its substance: Instead of reviewing and where necessary adjusting the scale of basic (a) rule that the applicant is entitled salaries contained in the table in Article to the difference between the 66 of the Staff Regulations each year, as severance grant paid and such a required by Article 65 of the Staff Regu­ grant based on calculations lations, the Council, in order to make taking into account the the adjustments considered necessary, weighting of 157.8, by has confined itself to applying to such application of that weighting salaries the weightings provided for in either to the remuneration Article 64 of the Staff Regulations. This forming the basis of the calcu­ procedure does not meet the lations or to the severance grant requirements of the Staff Regulations itself; because the weightings are not pan of

JACQUEMART v COMMISSION

On 29 June 1976 the infringed. If this were not so Council decided to abandon its previous officials who voluntarily left the incorrect practice and in future to apply Commission before 1 January 1977 Article 65 correctly, but it disregarded would of necessity be at a serious its own decision when on adopting disadvantage in relation to those Regulation No 3177/76 it omitted to leaving after that date, although the include the weighting in the basic salary date of the termination of for the second half of 1976.

application accordingly appears salary which in turn is the basis for the unfounded. calculation of the severance gram as at 1 September 1976 and that in any event First submission he is entitled to allege in support of his claim that the said regulation is The applicant's claims regarding the unlawful on the ground of the alleged way in which the Council has applied omission. In support of his claim he Article 65 of the Staff Regulations are makes two submissions of substance: based in the first place on a mistaken conception of remuneration as referred (a) Infringement (first head) both by to therein. A basic salary to which a the contested decision and by Regu weighting applies must, contrary to

There is no by the Council in Regulation No textual authority for the applicant's 3177/76 and consequently contention to the contrary and the

Community legislature has a wide matically on 1 July, according to the discretion in this respect. No doubt by procedure provided for by letter (d) of its decision of 29 June 1976 the Council that section. The review period on restricted its freedom of choice with which the incorporation was to be based regard to the methods which might be did not end until December 1976 and it used but Regulation No 3177/76 in no was accordingly "quite proper" for the way conflicts with that decision, for the Council to decide that the incorporation decision involves two different of the weighting 157.8 would not take operations which it is necessary to effect until 1 January 1977. distinguish one from the other and this It is these two different operations the applicant has failed to do. which are contained in the tables Section II provides, by way of a first making up respectively Article 1 (1) and operation of a general nature, that in Article 1 (2) of Regulation No 3177/76. future a net rate of adjustment of remun­ erations will be made which must be There is thus no infringement of the decision of 29 June 1976 and the incorporated into the salary scales contained in Article 66 of the Staff applicant, to whom the provisions with Regulations, with the result (fifth reference to the transitional period from paragraph of Section II (c)) that the 1 July to 31 December 1976 are weighting for Belgium and Luxembourg applicable, cannot complain that his is fixed at 100% and the weightings for rights have been disregarded or his the other countries of employment are legitimate expectations frustrated. adjusted so as to reflect the ratio Second submission between the cost of living indices in the various places and that of Brussels. In the defendant's view, consideration Section II (d) provides that the of the wording alone shows that the adjustment is to take effect on 1 July of Council in adopting the Staff Regu­ the year in which the end of the lations deliberately intended not to reference period used for the pay review include the weightings in the severance falls. grant. According to Article 64 of the In the second operation described in Staff Regulations weightings are applied Section IV of the same decision under to remuneration alone and it would

express provision by the "legislature" On the basis of that definition, the first pecuniary rights other than remun and second paragraphs of Article 64 eration cannot be increased by means of provide that the remuneration shall be a weighting. Finally, the Commission weighted at a rate "depending on living adds that the regulation in question conditions in the various places of cannot be regarded as being contrary to employment". There would have been natural justice. no reason for that provision if all officials had the same place of The claim for default interest employment. The Commission's view

In this respect the Commission maintains that it has biguous and precise rules but only, to the extent necessary, in assessing certain committed no wrongful act or omission matters of fan determining the in not complying immediately with the adjustment of salaries. applicant's claims. In the event of its being judged that the Commission's As regards the first submission, the view in regard to the pecuniary rights of applicant rejects the argument that the Transitional and Final Provisions of the the applicant is not sound, it would follow at most that the Commission has decision of 29 June 1976 were precisely committed an error in the interpretation designed to avoid re-incorporating the of the Staff Regulations and it has often weighting in the basic salaries applicable been ruled (judgments of 9 July 1970 in in Brussels and Luxembourg with effect Case 23/69 Anneliese Fiehn v from 1 July 1976.

related only to the factors involved in In the applicant's view there is no assessing the net rate of increase listed ambiguity in Articles 62 to 66 of the in Section II of the decision. If it had Staff Regulations: had the objective indicated by the Commission it would have been — Remuneration comprises only "basic unlawful as being incompatible with the salary, family allowances and other clear wording of Article 65 of the Staff allowances" (Article 62, second Regulations.

JUDGMENT OF 13. 7. 1978 — CASE 114/77

default interest. wording of Section IV shows that the whole of Section II applies to Section D — Rejoinder IV without its being necessary to specify this. The first submission The reason for that transitional provision is clear. The date on which To justify the Council's right to adapt the Council decision took effect was, by remuneration annually by means of reason of Article 65 of the Staff Regu weightings, the Commission takes up lations, related to a reference period. It again the argument that the said was necessary to specify that reference weightings are part of remuneration, period clearly because it might have and adds that the concept of remuner been possible to think that the decision ation is to be derived from a reading of adopted on 29 June 1976 and the new Articles 62 and 64 of the Staff Regu system which it established would not lations together.

1969. the remuneration. It is accordingly Finally, he submits an additional logical that the same should be true argument. When the Staff Regulations when the annual adjustment is made by were adopted in 1962 there was a means of the weighting. As for the logical connexion and a recognized additional argument to the effect that proportion between the basic salary when the Staff Regulations were scales established on a weighting of adopted in 1962 the basic salaries were 100% for Brussels and Luxembourg and established at 100% for Brussels and

Luxembourg in relation to the other (5),1 of the Council decision following places of employment and that that the said review of remuneration". The relationship must be maintained, the final version adopted by the Council did Commission observes that the fact that not include that last sentence and that the weighting was fixed at 100% on omission shows that the Council did not 1 January 1962 in no way implies that intend to require the immediate in future it must regularly be brought to application (on 1 July 1976) of the that value once a year. Moreover, the weightings to the basic salaries. different places of employment referred to in Article 65 (2) include Brussels and The second submission Luxembourg. The Commission reconsiders the various precedents which it has cited in support The Commission does not accept the of the alleged rule that express provision by the Council is required in order to applicant's analysis of Section IV of the decision of 29 June 1976. The reference extend the application of the weightings therein to Section II (6) (c) and not to pecuniary rights for which those Section II (6) (d) shows that the weightings are not provided in the Council did not intend that the current general rule contained in Article 64. weighting (157.8) should be in­ Since the severance grant is related to corporated in accordance with the the basic salary and not to remuneration procedure provided for in Section II (6) it cannot be affected by the weighting. (d). It is therefore wrong to state that Default interest the whole of Section II applies to Section IV. The Council's deliberate As for the claim for default interest, the intention not to incorporate "the Commission maintains its previous current weighting" (157.8) with effect conclusions and refers in particular to from 1 July 1976 is apparent from a the judgment of the Court of Justice of comparison of the wording of Section 13 October 1977 (Case 106/76 Deboeck IV of the decision of 29 June 1976 with v Commission [1977] ECR 1623). the "Report of the Working Party on The oapplicant, represented by E. Staff Regulations to the Committee of Arendt, and the Commission of the Permanent Representatives" of 29 September 1975, annexed to the European Communities, represented by rejoinder. That draft contained, in its Agent, J. Griesmar, presented oral addition to the actual wording of observations at the hearing on 1 June 1978. Section IV, the following sentence: "The scales and weightings so The Advocate General delivered his determined shall be the basis for the opinion at the hearing on 29 June 1978. application, in accordance with the 1 — This became II (6) in the final version published in the procedure provided for in paragraph 1 Staff Courier.

4 According to Article 66 of the Staff Regulations basic monthly salaries are determined for each grade and step as provided in the table contained in that article, and for Grade A 2, step 3 the relevant figure appearing in the table applicable on 1 September 1976 was Bfrs 107 412.

5 That amount was taken as the basis for calculating the applicant's severance grant.

6 The applicant challenges this method of calculation, claiming that in order to satisfy the requirements of Article 65 of the Staff Regulations concerning the adjustment of remuneration for which provision is made in the said article the amounts in the above-mentioned table had been subject to a weighting of 157.8% in respect of the salaries of officials employed at the provisional seats of the Community and that the amounts resulting from such weighting should have been incorporated into the monthly basic salary in calculating the severance grant.

7 The Commission claims, on the other hand, that according to the express wording of Article 12 of Annex VIII to the Suff Regulations the severance

JACQUEMART v COMMISSION

grant is calculated on the basis of the last basic salary and that that concept refers clearly to the amounts shown in the table contained in Article 66 of the Staff Regulations.

14 The weightings do not constitute an additional element of remuneration but are a means of calculating the amounts of the various elements making up that remuneration.

JUDGMENT OF 13. 7. 1978 — CASE 114/77

15 It follows that Article 64 does not govern the level of remuneration but rather its geographical weighting depending on living conditions in the various places of employment by providing that in relation to the remuneration of officials of the Communities employed at the provisional seats, the remuneration in other places shall be adjusted by the application of a weighting bringing the remuneration, as appropriate, to a figure above, below or equal to that applicable to officials employed at the provisional seats.

16 Article 65, on the other hand, relates to the level of remuneration and lays down in paragraph (1) the procedure for the annual review as at 1 July each year of that level and, where appropriate, for its adjustment.

17 Article 65 (2) provides that in the event of a substantial change in the cost of living during the year, the Council shall decide, within a maximum period of two months, what adjustments should be made to the weightings and if appropriate to apply them retrospectively.

18 Article 65 leaves to the Council the choice of the most appropriate means and forms for the implementation of a policy with regard to remuneration which is in accordance with the criteria laid down by that article.

23 It is accordingly not possible to interpret Article 12 (c) of Annex VIII to the Staff Regulations as expressing the Council's intention to calculate the severance grant on a basis different from that of the monthly basic salary as intended and established by the Council pursuant to the methods for the adjustment of the level of remuneration referred to in Article 65.

24 Any other interpretation would lead to the conclusion that Article 12 (c) of Annex VIII to the Staff Regulations is unlawful as being incompatible with the principle of the equality of officials in that two different concepts of basic salary would be applied, in Article 66 of the Staff Regulations and Article 12 of Annex VIII respectively, without there being any objective consideration to justify such a difference.

25 Accordingly, in determining the severance grant as on 1 September 1976 the Commission was required to calculate it on the basis of the monthly salary shown in the table contained in Article 66 of the Staff Regulations, subject to the weighting of 157.8%.

26 It is therefore appropriate to order the Commission to pay the difference between the amount actually paid and the amount of a severance grant calculated as on 1 September 1976 by the application of the aforementioned weighting of 157.8%, increased by default interest of 6% from 22 February 1977, the date of the complaint sent by the applicant to the Commission.

JUDGMENT OF 13. 7. 1978 — CASE 114/77

Costs

2. Orders the Commission to pay the costs.

Bosco Mertens de Wilmars O'Keeffe

Delivered in open court in Luxembourg on 13 July 1978.

A. Van Houtte G. Bosco

Registrar President of the First Chamber