C-147/79

JUDGMENT OF 16. 10. 1980 — CASE 147/79

ation allowance Article 4 (2) of Annex uniform, objective and directly related VII to the Staff Regulation (inserted to the purpose of the rules. by Article 21 (2) of Regulation No 912/78) does not offend against the Although in border-line cases fortu- general principle of equality. As the itous problems must arise from the in- foreign residence allowance is troduction of any general and abstract intended to compensate for the disad- system of rules, there are no grounds vantages which officials undergo as a for taking exception to the fact that result of their status as aliens, the the legislature has resorted to catego- Community legislature was entitled, rization, provided that it is not in in applying: its discretionary judgment essence discriminatory having regard to that situation, to rely on the single to the objective which it pursues. criterion of nationality, which is

In Case 147/79

RENÉ HOCHSTRASS, an official of the Court of Justice of the European Communities, residing in Senningerberg, represented by G. Vandersanden of the Brussels Bar, and with an address for service in Luxembourg at the Chambers of E. Arendt, Rue Philippe-II, Boîte postale 39, Luxembourg, applicant, v

COURT OF JUSTICE OF THE EUROPEAN COMMUNITIES, represented by the Registrar of the Court of Justice, Albert Van Houtte, with an address for service in Luxembourg at the Court, Plateau du Kirchberg,

defendant,

APPLICATION for a declaration that Article 4 (2) of Annex VII to the Staff Regulations, as amended by Article 21 (2) of Council Regulation No 912/78 of 2 May 1978 (Official Journal L 119, p. 1), on the rules for granting the foreign residence allowance is void and, accordingly, for the annulment of the decision of the President of the Court dated 22 June 1979 rejecting the applicant's complaint,

T H E COURT (Second Chamber)

composed of: A. Touffait, President of Chamber, T. Koopmans and O. Due, Judges,

Advocate General: H. Mayras Registrar: H. A. Rühi, Principal Administrator

gives the following

JUDGMENT

On the basis of that provision the — Consequently, annul the decision of Personnel Branch of the Court decided the Court dated 22 June 1979 on 16 May 1978 which officials were rejecting the applicant's complaint; entitled to that foreign residence — Order the Court to pay the costs." allowance and the Finance Branch paid it to those concerned as from 4 May 1978. The defendant contends that the Court René Hochstrass, born on 17 December should: 1927 in Athus (Belgium) has and has always had Luxembourg nationality. He "— Declare the application inadmis- entered the employment of the Court of sible; Justice of the ECSC on 4 December — Otherwise, reject the application as 1952 and is at present an established being unfounded in law; official at the Court of Justice in Grade — Order the applicant to pay the costs B 4, Step 8. of the action which he has himself On finding that the foreign residence incurred." allowance was not paid to him, Mr Hochstrass submitted a request under The Council, intervening on behalf of the Article 90 (1) of the Staff Regulation Court, contends that the Court should: that he be granted that allowance. The "— Declare the application inadmis- request was rejected by a memorandum sible; from the Registrar of the Court of Justice of 16 January 1979 which was — Otherwise, reject the application as communicated to the applicant on unfounded." 7 March 1979. The Commission, intervening on behalf On 11 May 1979 the applicant made a of the Court, contends that the Court complaint against that rejection under should : Article 90 (2) of the Staff Regulations, which was rejected by the President of "— Reject the application as the Court by a decision of 22 June 1979, inadmissible, and ' in any event as and the applicant then lodged this unfounded; application against that rejection of his — Order the applicant to pay the complaint. The application was received costs". at the Court Registry on 21 September 1979. Upon hearing the report of the Judge- III — Summary of the sub- Rapporteur and the views of the missions and arguments of Advocate General the Court (Second the parties Chamber) decided to open the oral procedure without any preparatory A — Admissibility inquiry. The defendant maintains that the applicant has no legal interest in taking proceedings. That concept of "interest", II — Conclusions of the parties which has been defined by the Court of Justice, implies the presence of three The applicant claims that the Court conditions: should: (1) The individual interests of the "— Declare the application admissible; official must be affected (Joined — Declare that the provision in Point 2 Cases 44, 46 and 49/74 Acton and of Article 21 (2) of Council Regu- Others v Commission [1975] ECR lation No 912/78 is unlawful; 383 at p. 394).

(2) Those individual interests must be (1) Either the Council will abolish the actual or potential, but in any case allowance, in which case the certain (Case 90/74 Deboeck v applicant has a non-material and Commission [1975] ECR 1123 at direct interest in bringing p. 1133). proceedings because that will bring to an end a situation which is unjust and which is discriminatory as (3) Such individual interests cannot be against him; or purely abstract (Case 15/67 Bauer v Commission [1967] ECR 397 at p. 402, and Case 37/72 Marcato v (2) The Council will amend the Commission [1973] ECR 361 at provision in question so that either p. 368). the applicant will be able to benefit from its provisions or the injustice will be brought to an end. In the first However, the defendant contends that case the applicant's interest is the applicant has no real or even certain, while the second case falls potential personal interest in bringing under the first possibility. this action because, even if he obtains a declaration that the disputed provision is void, he will not be entitled to receive The applicant adds that in any case it is the foreign residence allowance. The clear the the admissibility is closely only consequence of such a declaration connected with an examination of the would be that the foreign residence substance of the application, so that, in allowance would be abolished and, thus, his opinion, it is permissible to withdrawn from all those who receive it commence an examination of the at present. substance of the case, for only judgment of that matter will determine whether or not the applicant has an interest in The applicant claims that officials have bringing an application before the Court the right to challenge by way of an of Justice. objection of illegality "the validity of measures adopted under the regulations concerning the conditions of In support of the defendant the employment of public servants provided Commission considers that for there to that their unlawfulness, if confirmed, is be an interest in bringing proceedings the of at least potential benefit to the official reasonably foreseeable consequence of a concerned". declaration of invalidity must be that the appointing authority grants the applicant the allowance he seeks: a non-material The applicant points out that an official interest is not sufficient, for that would has an interest in the annulment of a open the way to mass applications. regulation concerning staff of which he is a member if that regulation disqualifies him from its advantages; he thus satisfies As to the hypotheses contemplated by the requirement of a direct connexion the applicant, the Commission is of the between the act challenged and its effect opinion that his chances of being able to on his individual position. obtain the foreign residence allowance "are not even purely hypothetical, but simply non-existent; the applicant will If the disputed provision is declared void, never, owing to the nature of that two possibilities arise: allowance, be entitled to receive it".

In it reply the defendant contends that an The applicant first recalls that the ex- application based on a direct non- patriation allowance depends on both a material interest is inadmissible because nationality criterion and a residence "it invokes the collective interest of a criterion. The Court of Justice has held category of officials for the sole purpose that in deciding whether to grant that of obtaining a declaration that the regu- allowance the residence criterion is the lation in question is illegal". paramount consideration whereas the reference to nationality is only a sub- sidiary consideration (Case 21/74 Airola v Commission, [1975] ECR 221 at p. 228; However, many of the higher courts of Case 31/74 Van Den Broeck v the Member States (the French Conseil Commission, [1975] ECR 235 at p. 244). d'État, the Belgian Conseil d'État, the Thus the foreign residence allowance, House of Lords) consider that "all those which is a sub-species of expatriation who are part of a group may act ut allowance, should follow the same legal singuli on grounds of their individual requirements as the latter.

HOCHSTRASS v COURT OF JUSTICE

They applicant observes in his reply that As a result the Council has failed to in examining the substance of the observe the general principle of equality arguments put forward by the defendant between officials who are placed in three questions should be considered in comparable situations (judgment of turn. 31 May 1979 in Case 156/78, Newth v Commission [1979] ECR 1941).

First question: Is the situation of the officials who draw the foreign residence The defendant states, first, that in allowance objectively different from that refusing the applicant the foreign of those who are excluded from it?

JUDGMENT OF 16. 10. 1980 — CASE 147/79

Second question: Is nationality an objective and uniform criterion enabling If it were found necessary to extend the two situations to be distinguished so as expatriation allowance the additional to apply different rules to them? allowance could not be other than a residence allowance — an allowance which does in fact exist in the European Communities, in particular for members The applicant repeats that by basing the of the Court — irrespective of foreign residence allowance exclusively nationality and, what is more, in keeping on the criterion of nationality the with the actual concept of removal Council has made it quite simply an inherent in taking up residence abroad or allowance for having a different returning to the home country. The nationality, which is sufficient in itself to foreign residence allowance based on show the illegality of the measure. The nationality is scarcely in keeping with applicant even wonders whether it is European aims: the single market, not to possible, in applying the EEC Treaty, to mention European citizenship. rely exclusively on nationality to justify the difference in treatment to be applied between two situations: he considers that at least in the field of the common agri- cultural policy, no such possibility exists. Intervening in support of the defendant, In the Staff Regulations the principle of the Council considers, first, that an non-discrimination on the grounds of appearance of discrimination in form nationality is an expression of the may correspond to an absence of general principle of equality as regards discrimination in substance, and that taxation. Therefore although nationality discrimination in substance consists in

After reviewing the provisions in Article Second question: Nationality as an 4 of Annex VII to the Staff Regulations objective and uniform criterion. the Council argues that the purpose of the foreign residence allowance is to grant an allowance to certain officials According to the Council the purpose of who do not have and have never had the the foreign residence allowance is to nationality of the country in which they ensure equal treatment for non-national are employed. It points out that those officials residing in the country in which who draw the expatriation allowance, they are employed in order to which is four times the amount, are compensate for the disadvantages to excluded, such persons being those, with which they are subject and to which or without the nationality of the country, officials who have or have had the who fulfil the requisite conditions. nationality of the country of employment are not subject. The Council considers that the applicant "appears to have difficulty in Whilst there are differences of treatment distinguishing the underlying object of between nationals and non-nationals in the expatriation allowance from that the Member States, nationality, as a link which is served by the foreign residence between the State and the individual,

JUDGMENT OF 16. 10. 1980 — CASE 147/79

constitutes an objective criterion. The cipally on the basis of the criterion of objective nature of that criterion is not residence, is inaccurate and that no such open to question where the provisions assumption may be made because the governing the official's situation are question to be settled is precisely concerned. whether, in certain conditions, nationality might not provide grounds in law for different treatment.

HOCHSTRASS v COURT OF JUSTICE

patriation allowance. The former is discrimination, but that criterion may intended to compensate for the disad- none the less be applied to elements of vantages — which the Commission his remuneration (judgment of analyses in the same way as the Council 14 December 1979 in Case 257/78 — brought about by the obligation Devred, née Kenny-Levick). imposed on officials who have never had the nationality of the State in which they are employed to live in that State, where their status is that of foreigners. In his reply to the interveners the applicant takes the view that if there is justification for a foreign residence allowance it is not on the basis of nationality but on that of an effective According to the Commission the connexion with a situation which places criterion of nationality is also appro- certain officials in less favourable priate inasmuch as "it has a direct and circumstances than others and which, as immediate relationship with the objective a result, justifies a compensatory and the purpose of Article 4 (2) of payment even if it is expressed at a flat Annex VII to the Staff Regulations". rate. Analysing the disadvantages — as The Commission recalls that this foreign described by the Council and the residence allowance is a new allowance Commission — experienced by a non- created to compensate for the disad- national living in the country in which he vantages inherent in having the status of is employed, the applicant maintains in a foreigner: the criterion for differen- the first place that the non-national can tiation based on nationality is the only easily exercise his voting rights in his one capable of serving that purpose, embassy and that there is nothing which particularly as it already constitutes in prevents him from pursuing a political itself an element of expatriation. career in his country of origin; he Doubtless it is possible to envisage other maintains likewise that the non-national types of allowance, as the applicant has does not have to undergo the registration done, but here the question is one of formalities for aliens and that, moreover, expediency which is for the Community nothing prevents him from participating legislature to decide. in the cultural and social life in the country in which he is working.

Even if such

a return were desired the Staff Regu- In its rejoinder the defendant concurs in lations provide for education allowances the interveners' conclusions and limits up to the age of 26, thereby mitigating itself to replying to the arguments put that disadvantage. Hence, the applicant forward by the applicant. The defendant says, the disadvantages are non-existent maintains that the general principle of or insignificant and they are, above all, non-discrimination and Article 7 of the amply compensated for by the system of EEC Treaty do not always prevent a allowances guaranteed by the Staff Community regulation from referring

It is country such as Luxembourg compared therefore imposed by factual circum- with the inflation to be found in certain stances. There is no discrimination either other countries. on the ground that that regulation "is based on actual differences between officials who do not have the nationality of the place in which they are employed As to the criterion of nationality the and officials who are nationals of the applicant emphasizes that the foreign host State and not on nationality per se". residence allowance is nothing other than a sub-category of the expatriation The defendant also maintains that allowance, as the Council has recognized different treatment is not arbitrary if it is itself in drawing a parallel between the based on an objective and uniform

Luxembourg nationals. Taken to the particular nationality; extreme it must be stated that in such conditions a person may very well feel — uniform because it is designed to himself an expatriate in his own country, apply in an identical manner and that consequently such feelings whatever the place of employment of should be compensated for by an the official; allowance". He concludes by repeating that nationality is not an objective criterion, as has always been recognized — directly related to the purpose of the • in the case-law of the Court. rules because it neutralizes the actual

1 By an application lodged at the Court Registry on 21 September 1979 the applicant brought an action for a declaration that Article 4 (2) of Annex VII to the Staff Regulations, as amended by Article 21 (2) of Council Regulation No 912/78 of 2 May 1978 (Official Journal L 119, p. 1), is invalid. The provision in question is worded as follows: "An official who is not and never has been a national of the State in whose territory he is employed and who does not fulfil the conditions laid down in paragraph (1) shall be entitled to a foreign residence allowance equal to one quarter of the expatriation allowance". According to Article 4 (1) to which the above provision refers, the expatriation allowance is to be paid to officials, as referred to above, who "during the five years ending six months before they entered the service did not habitually reside or carry on their main occupation within the European territory of that State. For the purposes of this provision, circumstances arising from work done for another State or for an international organiz- ation shall not be taken into account". The applicant further asks the Court to annul the decision of the administration of the Court of Justice dated 22 June 1979 rejecting the applicant's complaint relating to the memorandum from the Registrar of the Court of 16 January 1979 refusing to pay him the foreign residence allowance referred to in the above-mentioned provision.

Admissibility

2 The defendant and the parties which have intervened in support of it, the Council and the Commission, have raised an objection of inadmissibility based on the applicant's lack of interest in taking proceedings and on his failure to submit the complaint through official channels provided for in

5 As regards the lack of any interest in taking proceedings, the intimate connexion between the arguments as to the substance of the case relied upon by the applicant, which challenge directly the validity of the disputed provision, and the objection of inadmissibility raised by the defendant and the interveners on its behalf makes it necessary to examine the substance of the case directly.

Substance

6 The applicant maintains that the provision in question, which refers solely and exclusively to the criterion of nationality for granting or refusing the foreign residence allowance, is a breach of the general prohibition on discrimination on grounds of nationality which is derived from the Community legal order and which finds expression, in particular, in Article 7 of the EEC Treaty and in the provisions of the Staff Regulations. The criterion which has been adopted for granting the foreign residence

HOCHSTRASS v COURT OF JUSTICE

allowance, it is alleged, is not an objective one from two aspects: on the one hand, nationality does not constitute an objective basis for differentiation directly related to the purpose of the rules in question, and on the other hand the situation of recipients of the said allowance is not objectively different from those who do not receive it. That argument shows that the alleged discrimination does not lie in the unequal treatment of recipients of the expatriation allowance and recipients of the foreign residence allowance, but in the inequality between the latter category of officials and the category of those who do not receive either of the two allowances.

JUDGMENT OF 16. 10. 1980 — CASE 147/79

those additional constraints and to restore a measure of equality between all the officials in the same place of employment irrespective of their nationality.

1 1 The applicant counters that argument by claiming that the disadvantages connected with nationality as such are, as far as officials of the Community are concerned, non-existent or insignificant, being largely compensated for by the system of allowances and grants already guaranteed by the Staff Regulations and in particular by the expatriation allowance, and even if such disadvantages were to be present to a small degree the applicant maintains that that situation does not justify the grant of an additional compensatory allowance and considers that it would be better to increase the amount of the existing allowances to compensate for those disadvantages.

HOCHSTRASS v COURT OF JUSTICE

1 4 Although in border-line cases fortuitous problems must arise from the intro- duction of any general and abstract system of rules, there are no grounds for taking exception to the fact that the legislature has resorted to categori- zation, provided that it is not in essence discriminatory having regard to the objective which it pursues.

15 It follows from all those considerations that no factor has been disclosed of such a kind as to affect the validity of the provision in Point 2 of Article 21 (2) of Council Regulation No 912/78; consequently there is no ground for annulling the decision of the administration of the Court of Justice of the European Communities rejecting the applicant's complaint. In the circum- stances it is not necessary to examine the objection of inadmissibility on the ground of lack of interest in taking proceedings.

Costs

16 Under Article 70 of the Rules of Procedure the institutions shall bear their own costs in the case of actions brought by officials and other servants of the Communities.

On those grounds

The Registrar by order H. A. Rühl A. Touffait Principal Administrator President of the Second Chamber