C-156/78
ECLI:EU:C:1979:140
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JUDGMENT OF 31. 5. 1979 — CASE 156/78
interpreted to mean that where its similar, the administration is obliged, application is likely to result in a in order to avoid such a result, not to breach of a superior rule of law such apply the weighting fixed for the as the principle of equality among place where the official was last officials whose circumstances are employed.
In Case 156/78
Frederick H. NEWTH, a former official of the Commission of the European Communities, residing at 88 Avenue Leopold Wiener, 1170 Brussels, represented by Marcel Slusny, of the Brussels Bar, with an address for service in Luxembourg c/o Arie Gulden, 9 Rue de la Montagne, Trintange, applicant,
Commission of the European Communities, represented by its Legal Adviser, Alain Van Solinge, acting as Agent, assisted by Daniel Jacob, of the Brussels Bar, 36 Rue de Praetere, 1050 Brussels, with an address for service in Luxem bourg at the office of Mario Cervino, Legal Adviser at the Commission, Jean Monnet Building, Kirchberg, defendant,
APPLICATION for the annulment of the Commission's decision of 20 April 1978 rejecting the complaint submitted by Mr Newth and for the payment in Belgian francs of the allowances due to him,
THE COURT (Second Chamber)
composed of: Lord Mackenzie Stuart, President of Chamber, P. Pescatore and A. Touffait, Judges,
Advocate General: G. Reischl Registrar: A. Van Houtte
gives the following
NEWTH v COMMISSION
JUDGMENT
Facts and Issues
The facts of the case, the procedure, the the Staff Regulations, the purpose of conclusions and the submissions and which was to obtain payment of the arguments of the parties may be allowance in Belgian francs. summarized as follows: That complaint was rejected by the Commission on 20 April 1978. The applicant then lodged the present I — Facts and procedure application, which was received at the Court Registry on 19 July 1978. Mr Newth, who was born at Bromley (Kent), United Kingdom, on 18 March 1923, is a British subject. He was recruited by the Commission, in II — Conclusions of the parties accordance with Article 29 (2) of the Staff Regulations, as a director of the The applicant claims that the Court Joint Research Centre at Ispra in Grade should: A 2. He took up his duties on 1 May 1975. By decision of 28 September 1977, "(1) Declare that the express rejection notified to him on 7 October 1977, Mr of the applicant's complaint by the Newth was retired by the Commission in defendant on 20 April 1978 is null the interests of the service with effect and void; from 1 November 1977. Retirement took (2) Declare and adjudge that the place in accordance with Article 50 of applicant is entitled to the payment the Staff Regulations, which provides that: in Belgian francs of his allowances, both principal and subsidiary; "An official holding a post in Grade A 1 (3) Declare and adjudge that the or A 2 may be retired in the interests of defendant must adjust the the service by decision of the appointing applicant's account, if necessary authority. under the supervision of the Court; Such retirement shall not constitute a (4) Order the defendant to pay the disciplinary measure." arrears due, that is to say, Bfrs The applicant had been recruited in 200 000, subject to the applicant's Belgium and, when he was retired, he right to amend that figure during had expressed the intention of returning the proceedings; to Belgium. He therefore asked the (5) Order the defendant to pay the administrative authority to pay in Belgian costs." francs the allowances to which he was entitled under the third paragraph of The Commission contends that the Court Article 50 of the Staff Regulations. The should: administrative authority refused and he submitted to the Commission a complaint through official channels "— Dismiss the application as within the meaning of Article 90 (2) of unfounded;
JUDGMENT OF 31. 5. 1979 — CASE 156/78
— Subject to due reservations, order Regulations provide, first, that where a the applicant to pay the costs." sum is subject to weighting, payment is, with the exception of pensions, made in The procedure followed the normal the currency of the country whose course. Upon hearing the report of the weighting is applied and. secondly, that Judge-Rapporteur and the views of the where that sum is weighted at a rate Advocate General the Court (Second other than that fixed for Belgium, it is Chamber) decided to open the oral paid at the rate of exchange in force on procedure without holding any 1 January 1965". preparatory inquiry. On the basis of the principles thus laid down the defendant considers that the allowance — which forms the subject of III — Summary of the sub the action — is, in accordance with the missions and arguments of the parties fifth paragraph of Article 50 of the Staff Regulations, to be weighted at the rate fixed for the place where the official was In support of the application the last employed, which means in this applicant has put forward four principal instance at the rate fixed for Italy. submissions but in order to assess them correctly it is first necessary to refer to Furthermore, in the light of the close the rules and general principles link between the weighting and the applicable to the payment of the remun currency of payment, the latter can only eration and allowances provided for by be the currency of the last place of the Staff Regulations, on which the employment, that is, Italian currency. defendant relies in its defence.
The defendant maintains that that Preliminary general and theoretical solution is in accordance with the statement concerning the currency used for principles applied by the Staff Regu the payment of remuneration, pensions and lations and cannot be opposed by allowances reference to the rules relating to The defendant seeks to show that remun pensions. In that connexion the defendant refers to the opinion of Mr eration is paid in the currency of the Advocate General Mayras in the case of official's place of employment and is Fabrizio Gillet v Commission of the subject to weighting at a rate which is fixed for each country of employment. A European Communities [1975] 1 ECR at pensioner, on the other hand, may elect p. 479, in which he stated that: to have his pension paid either in the "It is the scheme of payment of pensions currency of his country of origin or of which should be revised so that every his country of residence or of the pension which is weighted ought country in which he was last employed. compulsorily to be paid in the currency The allowances paid by virtue of Regu lation No 2530/72 of the Council of 4 of the country in respect of which the weighting is calculated." December 1972, Official Journal L 272, and Regulation No 1543/73 of the The applicant considers the Council of 4 June 1973, Official Journal Commission's reasoning to be. a L 155, are paid in the currency of the syllogism "which gives rise to misap Community country where the recipient prehensions", most of which are provides proof of residence. incorrect. In that connexion he refers to From an examination of those examples the various examples quoted in order to the defendant concludes that "the Staff show that the general principle deduced
NEWTH v COMMISSION
is already subject to an exception as where the retired official declares his regards pensions. home to be (Article 82 of the Staff Regu lations) and the same applies as regards the allowances. The defendant therefore The applicant then puts forward his own considers that the general rule which it view, by which he seeks to show that, as has put forward is confirmed. regards remuneration, it is logical for all officials to be paid in the currency of the country where they are employed, First submission relating to the statement having regard to the fact that they are of reasons for the decision to reject the obliged to reside in that country and to the need to avoid the existence of applicant's complaint flagrant disparities, whereas, as regards pensions, an employee regains his The Commission had based its rejection freedom of establishment and may be of Mr Newth's complaint on the fifth paid in the currency of his country of paragraph of Article 50 of the Staff Regu residence subject always to observance of lations, which it interpreted by stating the principle of equality of treatment of that officials.
"the allowance which may be claimed by The applicant considers that that system an official who has been retired in the is more coherent than the Commission's, interests of the service is weighted at the which is based on a rule and exceptions. rate fixed for the place where the official Even the opinion of Mr. Advocate was last employed. Ail the related General Mayras may be explained on the provisions of the Staff Regulations and basis of the principle of equality since, in those adopted in implementation of the case of pensions, it was necessary to those regulations confirm the avoid their being increased as a result of indissoluble link between the weighting the weighting and "since there is no applicable to the amounts fixed and the reason to create situations of privilege". currency in which those amounts are to be paid. The basic reason for that is clearly that the weightings which are at The defendant observes that "although he present applicable are inter alia does not contest the accuracy of its dependent upon the par values in force statement, the applicant contests the at the date referred to in Article 63 of conclusions drawn from it". the Staff Regulations, that is, on 1 January 1965.
The defendant states once again that "Contrary to the statement made by the The result of seeking to pay in a applicant … that system is characterized currency other than Italian currency (for not only by the use of the rates of example, in Belgian francs) an allowance exchange accepted by the International which under the Staff Regulations is Monetary Fund on 1 January 1965 but weighted at the rate fixed for Italy, also by a close link between the currency would be absolutely contrary to the of payment and the weighting". economic significance of that weighting".
Thus, under the rules relating to pensions, the weighting applicable is that The applicant does not accept that fixed for the country of the Communities reasoning, since "no precise arrangement
JUDGMENT OF 31. 5. 1979 — CASE 156/78
for payment it provided for by Article 50 making of advance payments whilst of the Staff Regulations and reference referring the matter to the Community must therefore be made to Article 63 as legislature. Moreover, even if the the allowance is substituted for the re Commission considered that it was muneration". required to take a final decision it could not just refer to the final paragraph of Article 63 and set aside the first two Furthermore, such reasoning would paragraphs. The applicant maintains that, result in penalizing an official who, in fact: being already resident in Belgium before his appointment to Ispra, becomes subject to the rules laid down for Either "the allowance is a form of
officials living in Italy where "the cost of continuing remuneration, in which case living is not particularly high". the applicant, who is residing in Belgium, must be paid in Belgian francs",
The defendant maintains that recourse to the rules laid down in Article 63 "cannot Or it is a sort of pension ("temporary be justified" for two reasons: allowance", "an anticipated pension sub stitute");
— First, that provision provides that Or it is a temporary allowance, like that remuneration shall be paid "in the provided for by Article 41 of the Staff currency of the country in which the Regulations or those referred to by the official performs his duties" and as regulations which provide for the various Mr Newth's duties have ended it is forms of voluntary termination of inapplicable; service;
— Secondly, even assuming that it is In the last two cases payment is made in possible to replace the terms of that the currency of the country of residence. article by "currency of the country Thus, whichever argument is accepted, where the applicant takes up the applicant is entitled to payment in residence after termination of Belgian francs. service" (an unjustified interpretation according to the wording of Article 63) it would follow that the The defendant maintains that "the weighting to be applied would be detailed rules relating to the allowance in that of the country of residence, question, as laid down by Annex IV to which contradicts the clear wording the Staff Regulations, show that it differs of the fifth paragraph of Article 50. radically from remuneration or a pension".
According to the applicant, the problem It considers that even if the allowance in raised by Article 50 is that of the lacuna question were comparable to that in the text, which does not specify the provided for by Article 41 of the Staff currency in which the allowance must be Regulations the latter is weighted "at the paid. The Commission is trying to fill rate fixed for the place where the official that lacuna by reasoning, even though it was last employed" and thus the mode of might have drawn the Council's attention payment is the same as that provided for to its existence and should have found a by the fifth paragraph of Article 50 of provisional solution consisting in the the Staff Regulations.
NEWTH v COMMISSION
As regards the allowances referred to by — The procedure for recruitment the regulations providing for voluntary without competition is justified by termination of service, they involve a the need to select the officials ad system of payment which is peculiar to libitum, having regard to the need for them and which cannot be transposed. the institutions to recruit officials Finally, the defendant points out that the having very high qualifications; fifth paragraph of Article 50 of the Staff Regulations is quite clear in providing expressly that the weighting applicable — The absence of periodic reports is shall be that fixed for the place where justified by the absence of oppor the official was last employed. tunities for promotion and German terminology refers to officials in Grades A1 und A 2 as "politische Second submission relating to the interpre Beamten" [political officials]; tation of the fifth paragraph of Article 50 of the Staff Regulations — The duties of director of the The applicant maintains that as officials Research Centre are, in fact, in Grades A 1 and A 2 do not enjoy the temporary in nature, as a result of same stability of employment as other "the crisis affecting" the Centre. officials, compensation is provided by Moreover "the applicant replaced an means of the provision in question. In official holding a temporary posting this instance in particular the duties of a director of the Research Centre are and was in turn replaced by another such official". It would therefore be "liable to modification or termination on logical for payment of the allowance the adoption of each budget". to be made in Belgian francs by way The defendant contests that interpretation of compensation. and points out that as a counterpart to the absence of stability in their duties officials in Grades A 1 and A 2 benefit The defendant considers that the from conditions of employment which compensatory nature of the conditions of differ greatly from those normally applicable (recruitment without employment of officials in Grades A 1 competition, exemption from the and A2 appears to have been probationary period and from periodic acknowledged by the Court, which reports). Morever, the applicant's duties considers that "The power conferred by were not linked to the research Article 50 must be considered in the light of the fact that under the terms of programmes and thus were not Article 29 (2) of the Staff Regulations dependent upon the carrying out of a particular project. His duties were, such officials may be recruited by a therefore, no more temporary than those procedure other than the competition procedure and that under Article 34 they of any other official and the possibility that his service might be terminated at are not required to serve a probationary period" (judgment of the Court of any time was "largely compensated for by the existence of conditions of Justice of 11 May 1978 in Case 34/77, employment which are more favourable Oslizlok v Commission of the European Communities, [1978] ECR 1099. than those applying to officials in general".
The applicant emphasizes the It disagrees with the allegation that there "anomalous" nature of that "system of has been a succession of directors, dismissal ad nutum" and replies that: stating that the applicant himself was the
JUDGMENT OF 31. 5. 1979 — CASE 156/78
first "director for approved projects" and The applicant emphasizes once again that that after his departure "a vacancy notice the reference to the fifth paragraph of was published, whose aim was to fill that Article 50 is not conclusive, since as post on a permanent basis". The regards the present case, in which the defendant therefore takes the view that official whose post has been terminated the position of officials in Grades A 1 is taking up residence in a country other and A 2 is not so anomalous as to justify than that in which he was employed that payment of the allowance provided for in article does not specify the manner in the case of retirement in Belgian francs which the allowance is to be calculated. with application of the weighting fixed Thus, the application of the weighting for Belgium. alone may raise a problem more from the point of view of equity than from the point of view of the text. However, in the light of the "anomalous" situation in which the applicant finds himself as regards the possibility of being dismissed Third submission relating to discrimi ad nutum, it appears that a combination nation between officials of the weighting with payment in Belgian francs "would not necessarily be iniq uitous" a fortiori since, in this instance, The applicant observes that as a result of "the problem is a false one", as the his recruitment as a director at Ispra he applicant is not asking to have the "receives an allowance which is 40 % weighting applied to him. "Whatever the less than that which he would receive if text applied by analogy, what he is he had not been recruited to the asking for is that he be paid in Belgian Research Centre". francs without conversion and reconversion".
The defendant points out that the fifth paragraph of Article 50 of the Staff Regu lations is clear in its reference to the The defendant observes that the effect of weighting applicable and therefore, in that argument would be to deprive the accordance with the general principle fifth paragraph of Article 50 of the Staff which it has shown to exist, the Regulations of all meaning and that, allowance can only be paid in the furthermore, that paragraph does not currency corresponding to that make any distinction according to weighting. Moreover, the Commission whether or not the applicant resides in considers that the solution recommended the country where he was last employed. by the applicant — payment of the allowance in Belgian francs with application of the weighting fixed for Italy — "would result in awarding the applicant an amount higher than that received by an official in the same grade Fourth submission relating to the inapp who was last employed in Belgium and licability of the fifth paragraph of Article who has continued to reside in that 50 country after being retired." The defendant also observes that in such a case the amount of the allowance in lire would be greater than the amount of the The applicant maintains that the fifth last basic salary. paragraph of Article 50 of the Staff Regu-
NEWTH v COMMISSION
lations conflicts with the principles of Finally, as regards the allowance paid to equality between officials and that, as a those officials who have taken advantage result, it "violates the general principles of voluntary termination of service the of law". aim of that allowance was different, since it compensated those officials whose duties came to an end following In the defendant's view the applicant is either the merger of the executive bodies relying on a principle which is too of the Communities (Regulation No general and does not specify whether it 259/68) or the recruitment of officials who were nationals of the new Member concerns all officials, all former officials, or only officials who have been retired States (Regulations No 2530/72 and from their posts in accordance with 1543/73). Nor does the Commission detect the existence of discrimination in Article 50 of the Staff Regulations. It is, therefore, unable "to refute such a the difference which exists between the submission". position of the applicant and that of the "officials who were employed in Brussels and continue to reside there or even take up residence in Italy". Referring to the The applicant states that his position case-law in the Gillet case the defendant involves discrimination as compared, first, with those officials who are in considers that even if the applicant did suffer damage as compared to the other employment at Brussels, with retired officials and with those who have taken officials to whom reference has just been made, that "could not constitute advantage of voluntary termination of evidence of discrimination", sufficient to service and, secondly, "with officials entail the illegality of the fifth paragraph who were employed in Brussels and of Article 50 of the Staff Regulations. continue to reside there or even take up residence in Italy". The applicant thus relies on a plea of violation of the principles of "equality between officials" Finally, the Commission considers that and rejects in advance the possible the case-law laid down in Gillet is application in the instance of the case-law in the aforementioned Gillet applicable in this instance, since, first, that case concerned an alleged difference case, on the ground that that case of treatment resulting from the concerned acquired rights which application of rates of exchange accepted "derived from successive sets of regu lations". by the International Monetary Fund and, secondly, "a reading of the paragraph in question shows clearly that it is of general application": The defendant considers that there can be no discrimination as between the applicant and officials who are still in employment, having regard to the "Although it is for the Council to adapt difference in nature between the the regulations to economic realities and allowance in question and the remuner thus to seek the means of alleviating any ation of officials. loss suffered by officials residing in a country whose currency has been sub stantially devalued, that cannot mean As regards pensions, "their system of that the existing wording of Article 63 is payment, which is outside ordinary law, illegal or that in consequence it is inap prevents any useful comparison from plicable within the meaning of Article being made". 184 of the EEC Treaty".
JUDGMENT OF 31. 5. 1979 — CASE 156/78
IV — Oral procedure giving a detailed account of the allowance paid to Mr Newth. The parties presented oral argument at the hearing on 15 March 1979, when they gave their replies to questions put to. The Advocate General delivered his them. They produced fresh documents opinion at the hearing on 3 May 1979.
Decision
1 The application lodged on 18 July 1978 seeks to obtain the payment in Belgian francs of the allowance to which the applicant is entitled by virtue of Article 50 of the Staff Regulations.
The facts which led up to the lodging of the application are as follows:
2 On 1 May 1975 the applicant was recruited in Grade A 2 under Article 29 (2) of the Staff Regulations as a director at the Ispra Joint Research Centre.
3 By decision of 28 September 1977, adopted on the basis of the first paragraph of Article 50 of the Staff Regulations, the applicant was retired in the interests of the service with effect from 1 November 1977 and awarded a decreasing allowance calculated in accordance with the terms of Annex IV and weighted in accordance with the fifth paragraph of Article 50 at the rate fixed for the place where he was last employed.
4 As the Commission considers a close link to exist between the weighting and the currency of the country where the official was last employed, it pays that allowance in Italian currency.
5 It is established that on his recruitment the applicant was working and residing in Belgium and that following his dismissal he returned to Belgium and the applicant therefore requests that his allowance be paid to him in
NEWTH v COMMISSION
Belgian francs without conversion into Italian lire, that the Commission adjust his account and that it be ordered to pay the arrears due.
6 In support of his conclusions the applicant relies on three submissions, which will be considered in turn.
7 In a first submission the applicant maintains that as Article 50 does not make any express provision for the currency in which the allowance payable on retirement in the interests of the service is to be remitted that lacuna must be filled by analogy with the rules governing payment of salaries laid down in Article 63 of the Staff Regulations, payment of pensions laid down in Article 82 of the Staff Regulations and payment of the allowances provided for by the regulations concerning premature termination of service following the merger of the executive bodies of the Communities and the accession of the new Member States (Regulation No 259/68 of the Council of 29 February 1968, Official Journal, English Special Edition 1968 (I), p. 30, Regulation No 2530/72 of the Council of 4 December 1972, Official Journal, English Special Edition 1972 (1-8 December), p. 11, and Regulation No 1543/73 of the Council of 4 June 1973, Official Journal L 155 of 11 June 1973, p. 1), since the texts which embody those rules establish a direct link between the place where the persons entitled to the pension or allowance declare their home to be and the weighting applicable (whose aim is to compensate for the national variations in the cost of living) and thus by implication indicate the corresponding currency of payment.
8 However, it does not appear that it is possible for reasoning by analogy to extend the application of those general rules to Article 50, which deals with a very special situation and whose fifth paragraph established a close link between the weighting and the place where the official was last employed, an expression which cannot be interpreted as meaning place of "residence".
9 In a second submission the applicant maintains that the impermanence of the duties performed at that level justifies the existence of special rules for the allowances paid in the case of termination of service.
10 It is, however, of no importance in this instance whether the duties performed were undertaken only provisionally or on a permanent basis, since
JUDGMENT OF 31. 5. 1979 — CASE 156/78
the essential factor is the appointment of the applicant as an official, even if that appointment takes place in a grade in which the person appointed may be retired in the interests of the service at the discretion of the appointing authority and by its decision.
11 It is therefore necessary to consider only the consequences of the premature termination of service under Article 50 and not the causes of that termi nation.
12 In a third submission the applicant maintains that the application of Article 50 as interpreted by the Commission results in discrimination, since he receives an allowance which is considerably less than that which would be received by an official of the same grade who had worked in Brussels. It must be noted that the Commission's calculations show that the applicant in fact receives 30% to 35% less than an official whose last place of employment was in Brussels.
13 It is clear that the existence of such a situation is astonishing, particularly as it may be regarded as normal in the present circumstances for the applicant, who left his place of residence in Brussels to take up his duties at his place of employment, to have returned to his former place of residence as soon as he terminated his service. The Commission is, moreover, very conscious of the injustice of that situation, since it is still considering how to make appro priate provision for an equitable solution to such cases, which, moreover, are not very common. Originally, no weighting was applied to the allowance provided for in Article 50. The present provision was drawn up in 1971 and the Commission has just submitted fresh wording to the Council which would introduce into Article 50 application of the weighting fixed for the place of residence. The applicant therefore suffers discrimination as compared to other officials in a comparable situation, for example, those to whom the regulations relating to premature termination of service were applied following the merger of the executive bodies and the accession of the new Member States, or those whose last place of employment was Brussels and who take up residence in Italy. That situation is caused by the application of a general rule, which, in the applicant's special case, constitutes a breach of the principle of -equality among officials whose
NEWTH v COMMISSION
circumstances are similar. In order to avoid that discrimination and very considerable financial losses an official in the position of the applicant would therefore be obliged to take up residence at the place where he was last employed. The fifth paragraph of Article 50 must therefore be interpreted to mean that where, as in the present case, its application is likely to result in a breach of a superior rule of law, the Commission is obliged, in order to avoid such a result, not to apply the weighting fixed for the place where the official was last employed.
14 By virtue of Article 91 of the Staff Regulations the Court has unlimited jurisdiction in disputes of a financial character and accordingly requests the Commission to determine the rights of the applicant with all due precision.
Costs
15 The Commission has failed in its submissions.
16 Article 69 (2) of the Rules of Procedure, under which the unsuccessful party is to be ordered to pay the costs, is applicable.
On those grounds,
THE COURT (Second Chamber)
hereby:
1. Declares that the applicant is entitled to payment of the allowance referred to in the fifth paragraph of Article 50 of the Staff Regu lations, expressed in Belgian francs, weighted at the rate fixed for Belgium;
OPINION OF MR REISCHL — CASE 156/78
2. Orders the Commission to adjust the applicant's account and pay him the arrears due to him;
3. Orders the Commission to pay the costs.
Mackenzie Stuart Pescatore Touffait
Delivered in open court in Luxembourg on 31 May 1979.
A. Van Houtte A. J. Mackenzie Stuart Registrar President of the Second Chamber
OPINION OF MR ADVOCATE GENERAL REISCHL DELIVERED ON 3 MAY 1979 <apnote>1</apnote>
Mr President, the Staff Regulations, in relation to Members of the Court, which the fifth paragraph of Article 50 provides that: The applicant in the proceedings in which I am about to give my opinion "The allowance and the total remun entered the service of the Communities eration last received as referred to in the on 1 May 1975 in accordance with the preceding paragraph shall be weighted at terms of Article 29 (2) of the Staff Regu the rate fixed for the place where the lations of Officials and was appointed to official was last employed". the Joint Nuclear Research Centre at Following the termination of his Ispra as a director in Grade A 2. By employment the applicant took up decision of 28 September 1977, adopted residence in Brussels, where he had for in accordance with the first paragraph of many years been employed in a private Article 50 of the Staff Regulations, his company and had his place of residence employment was terminated with effect before he entered the service of the from 1 November 1977. That provision Communities. He therefore considers is worded as follows: that the aforementioned allowance must
"An official holding a post in Grade A 1 be paid in Belgian francs and without or A 2 may be retired in the interests of previous conversion into Italian lire on the service by decision of the appointing the basis of the par values in force on authority". 1 January 1965. Since the administrative authority rejected his request he Accordingly, the applicant receives the submitted a complaint through official allowance provided for in the third channels to the appointing authority on paragraph of Article 50 and Annex IV to 17 January 1978. That complaint was
1 — Translated from the German.