C-154/79

JUDGMENT OF THE COURT (FIRST CHAMBER) OF 16 JULY 1981 1

Stephen Biller and Others ν European Parliament

'Officials — Rates of exchange for the calculation of pensions"

Case 154/79

Officials — Applications to the Court — Application directed against a reguhtion — Absence of act adversely affecting the official — Inadmissibility (EEC Treaty, Art. 173; Staff Regulations of Officials, Arts 90 and 91; Council Regu­ lations Nos 3085 and 3086/78 amending the Staff Regulations of Officials)

Regulations Nos 3085 and 3086/78 are lations is not sufficient to create a of general application and hence officials judicial remedy against a measure which may not claim that they constitute is in the nature of a regulation. The decisions which are of direct and procedure provided for in Article 90 (2) individual concern to them in order to applies only where the appointing call their validity in question in authority has taken a decision or has proceedings under Article 173 of the refrained from adopting a measure pre­ Treaty. scribed by the Staff Regulations and The mere submission of a complaint where such conduct constitutes an act pursuant to Article 90 of the Staff Regu­ adversely affecting the official.

assisted by Sir Derek Walker-Smith, Queen's Counsel, with an address for service in Luxembourg at the office of Mr Pasetti-Bombardella, European Parliament,

defendant,

APPLICATION for the annulment of the defendant's decision rejecting the applicants' complaints pursuant to Article 90 (2) of the Staff Regulations concerning the application to them of Council Regulations (Euratom, ECSC, EEC) Nos 3085/78 and 3086/78 of 21 December 1978,

T H E C O U R T (First Chamber)

composed of: T. Koopmans, President of Chamber, A. O'Keeffe and G. Bosco, Judges,

Advocate General: F. Capotorti Registrar: J. A. Pompe, Deputy Registrar

Kingdom at 144.1%. A pensioner Officials' remuneration shall be residing in the United Kingdom with a expressed in Belgian francs. It shall be pension entitlement of A received paid in the currency of the country in A x1.441 Belgian francs. Converted which the official performs his duties. into pounds sterling, at the prevailing rate of exchange this gave a pension (P) of Remuneration paid in a currency other than Belgian francs shall be calculated on the basis of the exchange rates used for A x 1.441 the implementation of the general budget pounds sterling. 60 of the European Communities on 1 July 1978. If, on the other hand, the pensioner decided to have his pension paid in This date shall be changed, at the time of sterling, it would be converted into the annual review of remuneration sterling in accordance with Article 63 (3) provided for in Article 65, by the of the Staff Regulations "on the basis of Council acting by a qualified majority the par accepted by the International upon a proposal from the Commission as Monetary Fund and in force on provided in the first indent of the second 1 January 1965, that is at the rate of 140 subparagraph of Articles 148 (2) of the Belgian francs to the pound", giving the EEC Treaty and of 118 (2) of the pensioner a pension of Euratom Treaty.

United Kingdom: 62.5 III — Submissions and argu­ …” ments of the parties

The applicants allege that the combined effect of these regulations is to reduce by The applicants submit that Regulations more than 50% the pension of a Nos 3085 and 3086/78 are illegal. They beneficiary resident in the United were, it is alleged, adopted in violation Kingdom who has elected to have his of essential procedural requirements. pension paid in Belgian francs. As from 1 April 1979 the pension was calculated as Ρ = A χ 0.625 Belgian francs instead of The Council failed to consult the Ρ = A χ 1.441 Belgian francs. European Parliament as required by the Treaty (Merger Treaty, Article 24 (1)). The written procedure followed the Regulation No 3085/78 refers in its normal course. preamble to the opinion of the Par­ liament published in Official Journal Upon hearing the report of the Judge- 1977, C 183. However, that opinion was Rapporteur and the views of the concerned with a proposal of the Advocate General, the Court (First Commission of 2 March 1977 (Official Chamber) decided to open the oral Journal 1977, C 99) on the introduction procedure without any preparatory of the European unit of account into the inquiry. Staff Regulations. Since Regulation No 3085/78 has nothing to do with the European unit of account, it can be II — Conclusions of the parties concluded that there was no proper consultation of Parliament.

The applicants claim that the Court should: Indeed the Parliament in its resolution notes “the Commission's assurance that (1) Declare Regulations Nos 3085 and its proposal will in no way affect the real 3086/78 inapplicable; value of the payments made to officials in the form of remuneration, pensions (2) Annul the defendant's decision and allowances”. rejecting the applicants' complaints concerning the application to them of those regulations; The applicants point out that the absence of proper consultation with the Par­ (3) Order the defendant to pay the liament on Regulations Nos 3085 and costs. 3086/78 is confirmed by the fact that it was not until after their adoption that The defendant contends that the Court there was any awareness of their effect should: on existing rights.

introduce the European unit of account States in the matter of public service into the Staff Regulations. The pension schemes. applicants conclude that the procedure for consultation required by Article 24 (1) of the Merger Treaty has not been followed and this renders Regulations Consequently vested rights which have Nos 3085 and 3086/78 illegal. accrued in respect of periods of service completed, and rights transferred to the Community pension scheme, must be governed by the provisions in force at The applicants argue that the above- the time when those rights accrued. mentioned regulations offend against Article 190 of the Treaty in so far as they do not state the reasons on which they are based. The applicants draw a distinction between variable factors in pension formulae such as weightings for the cost of living, and provisions which define The applicants further submit that Regu­ these factors. The former can be varied, lations Nos 3085 and 3086/78 constitute the latter cannot since any change a violation of vested rights. They point necessarily affects the basis for the out that it is well established in the determination of pension rights. case-law of the Court that the Council has no power to amend the Staff Regu­ lations in violation of vested or acquired rights (droits acquis). The terms of The defendant submits that the Annex VIII to the Staff Regulations application is inadmissible. The recognize that since pension rights conditions set out in Article 90 (2) which accrue by virtue of years of pensionable must be satisfied in order to found a service they vest not only in those complaint have not been fulfilled. Article already retired and already receiving a 90 (2) requires a decision constituting an pension, but in anyone who has act adversely affecting the applicant to completed a period of service qualifying have been made and a failure to adopt a for a pension. Moreover many officials, measure prescribed by the Staff Regu­ in pursuance of Article 11 (2) of Annex lations, such failure constituting an act VIII, upon entry into the service of the adversely affecting the applicant. Commission, transferred the actuarial equivalent of retirement pension rights acquired in the expectation that they would benefit from the provisions in The defendant, the appointing authority, force at the time they made the transfer. has not taken a decision regarding the applicants. A decision implies a choice. In the instant case there is no choice or discretion and therefore no decision. The The applicants argue that it is a only administrative act required of the fundamental principle of law that defendant is to give effect to the clear legislation may not deprive an individual provisions of a regulation. retroactively of vested rights. Legislation which operates retrospectively in such a way as to deprive either pensioners or those in service of pension entitlements, The applicants, in their complaints, violates this general principle of law and required the appointing authority to is contrary to the practice of Member “take a decision which will provide that

The applicants rely on Article 184 of the Furthermore the case-law of the Court EEC Treaty to challenge Regulations of Justice clearly demonstrates that the Nos 3085/78 and 3086/78. Article 184 procedure laid down in Article 173 is not cannot be used to attack a regulation available to officials in their disputes directly. The Court in Joined Cases 31 with the Community. These are and 33/62 Lütticke ν Commission has governed by Article 179 which held: specifically defines the jurisdiction regarding disputes as being "within the limits and under the conditions laid down in the Staff Regulations or the " I t is clear from the wording and the Conditions of Employment", these, in general scheme of this article that a the instant case being Articles 90 and 91. declaration of the inapplicability of a regulation is only contemplated in proceedings brought before the Court of Justice itself under some other provision The second condition of Article 90 (2) of the Treaty and then only incidentally requires a failure " t o adopt a measure and with limited effect". prescribed by the Staff Regulations". In the present case there has been no such failure on the part of the defendant. On the contrary the defendant fulfilled its The applicants cannot directly attack legal and constitutional duty by giving Regulations Nos 3085/78 and 3086/78 effect to a regulation. unless their application is admissible either under Article 173 or Article 179 of the EEC Treaty. It does not seem possible under Article 173 to attack the In the light of the above considerations above-mentioned regulations which are relating to Article 90 (2) the defendant acts of the Council by lodging an submits that the present case is not application against the European Par­ admissible. liament. Even if it were possible the application does not comply with the second paragraph of Article 173, Turning to Article 90 (1) the defendant according to which proceedings can only finds that even had the applicants be instituted by a retired person in favoured the procedure laid down in that respect of " a decision addressed to that provision the present action would still person" or " a decision which although in be inadmissible. The requests of the the form of a regulation is of direct and applicants having as their only object individual concern to him". The object that the appointing authority should of the present dispute is a regulation, apply a provision laid down in the Staff which is applicable to all officials of the Regulations in such a manner as to Community and thus has legal effect for violate the said provisions both in a category of individuals defined in a wording and substance, cannot be

admissible under Article 90 (1) of the The defendant argues that there was Staff Regulations. The function of sufficient consultation of the Community appeals under Articles 90 and ,91 is the institutions on Regulations Nos 3085/78 review by the Court of acts and and 3086/78. As early as 1972 the omissions by the "appointing authority". Commission proposed to the Council Since the subject-matter of this present that the IMF parities be abandoned. It case is inadmissible under Article 90 (1), was originally envisaged that the a formal appeal to the Court cannot cure currency equivalents to the European that admissibility where none exists in unit of account would be used in calcu­ the regulations. lating pensions and salaries. This proposal was approved by the European Parliament in a resolution which stated The defendant submits, in respect of the that substance of the case, that the facts and applicable law show no valid grounds for complaint. "Whereas following the introduction of the European unit of account, weightings will no longer be required to The applicants allege that the absence of correct exchange parities and will consultation must lead to the illegality of henceforth be used principally to take the measures in dispute. This is a account of increases in the cost of living challenge to the validity of the regu­ as originally intended". lations. Such a challenge can only be made under Article 173. Yet, the application does not refer to Article 173 The preamble referred to the Com­ or rely on it in an attempt to show mission's assurances that its proposal compliance with its provisions, including would in no way affect the real value of the conditions for the time-limit in the payments made to officials. This respect of the institution of proceedings. means, the defendant argues, that payments to officials would be freed from the impact of currency fluctuations The defendant also submits that Treaty and based on the principle of non-dis­ requirements in respect of consultation crimination. were satisfied. Article 24 (1) of the Merger Treaty provides : The Council used its powers under Article 149 of the Treaty and voted unanimously to amend the Commission's " T h e Council shall, acting by a qualified initial proposal. Article 149 does not majority on a proposal from the prescribe any further consultation in the Commission and after consulting the case of an amendment to a Commission other institutions concerned, lay down proposal. the Staff Regulations of Officials of the European Communities and the Conditions of Employment of Other The defendant concludes from an exam­ Servants of those Communities". ination of the process of consultation leading to the adoption of Regulation N o 3085/78 that the Council complied The Treaty, the defendant submits, does with the requirements of consultation. not specify in detail what form this consultation is to take nor does it impose any duty of consultation in respect of With respect to the applicants' arguments amendments to the Staff Regulations. on vested rights and legitimate

The applicants allege that Regulation No 3086/78, in adjusting weightings, was a The defendant rejects the applicants' misuse of power. The defendant doubts allegation as to infringement of their that this is in fact the case. The legitimate expectations. The applicants defendant points out that the objective of are not suffering a loss in that they will the Staff Regulations is to ensure equal not receive less than they were intended treatment for all Community officials to receive under the Staff Regulations: and servants so that they have equal they are simply being deprived of a purchasing power. This objective was windfall profit arising from fluctuations sought to be achieved by Article 82 of in exchange rates as to which there could the Staff Regulations which provides for be no guarantee of continuance. weighting in accordance with Articles 64 and 65 which in turn make weightings dependent upon “living conditions in the various places of employment” (Article 64) and the cost of living (Article 65). The defendant argues that there the The divergence of actual exchange rates applicants cannot complain that they and IMF rates at 1 January 1965 have been retroactively deprived of combined with the unexpected operation vested rights. The prohibition on of the option provisions contained in retrospective operation of legislation is Article 45 of Annex VIII resulted in the not an absolute principle but is system defeating instead of realizing the dependent upon the wording of the clear objective of the Staff Regulations. legislation and on its content and Pensioners in weak currency Member subject-matter. If the language or States who opted to have their pensions dominant intention of a piece of paid in the currency of the country in legislation demands that it be given which the employing institution was retrospective effect, then the act in situated, that is normally in Belgian question must be construed accordingly. francs, could more than double their Conversely, if the enactment is expressed pension and in some cases receive more in language which is ambiguous and than their last basic salary. This resulted could be construed as either requiring in discrimination between pensioners, retrospective or prospective effect then it exactly what the provisions of the Staff ought to be construed as taking effect Regulations intended to avoid. prospectively.

As to the substance of the case, the applicants do not accept that the The Parliament, the applicants point out, defendant has a duty to give effect to has made decisions in the past restricting regulations without having regard to or varying regulations concerning the their consequences. The defendant must remuneration of Community officials. act as a fair employer. For example, the Parliament in 1979 decided unilaterally not to apply current regulations relating to the remuneration and allowances of staff attending The applicants refute the defendant's sessions of the Parliament in Strasbourg contention that the Treaty requirements and committee and other meetings in in respect of consultation were complied Brussels. Having taken such a decision with, pointing out that even where Par­ with respect to remuneration it cannot liament has been consulted on a proposal now argue that it has no power to take a from the Commission, further consul­ similar decision on pensions. tation may be necessary in the case of amendment. Citing the Jozeau-Marigné Report to the Legal Committee of the European Parliament (European Par- The applicants accept that they cannot liament Doc. 110, 1967/68, paragraph challenge the regulations under Article 21) they contend that consultation with 184 unless their application is admissible the European Parliament must cover all under Article 173. In their estimation the essential issues of the provisions application is admissible under Article proposed by the Commission or accepted 179. by the Council.

JUDGMENT OF 16. 7. 1981 — CASE 154/79

The applicants point out that the appro- The defendant states that there was priate remedy in respect of windfall cases adequate consultation of the European is legislation having prospective effect Parliament since the material effects of which will not deprive individuals of the regulations and the draft proposed their vested rights. presented to the European Parliament would be the same. The defendant's submissions on the question of interpretation of legislation are, the applicants say, irrelevant since The defendant submits that there is in the issue in the present cause is not on Community law no general principle, the interpretation, but the legality of the express or otherwise, guaranteeing regulations. rights. The parities and weightings applicable before the enactment of the regulations in dispute do not represent The applicants conclude their reply to an acquired right. Since action to alter the defence by stating that they maintain them represents the correction of an the submissions set out in their anomaly, such action cannot be a misuse application. of power. There is, the defendant argues, no element of retroactivity in that the The defendant in the rejoinder states that operation of the regulations takes effect the application is inadmissible since it from a date later than that of their does not comply with the requirements enactment. prescribed in Articles 90 and 91 of the Staff Regulations. The regulations in question apply to the applicants as they The defendant respectfully asks the apply to all officials because they have Court to dismiss the application as been adopted by the Council and not inadmissible or alternatively to reject it because the appointing authority has as unfounded in substance. rejected the applicants' complaints as inadmissible. Therefore if there is an act adversely affecting the applicants, it is the legal act promulgated by the Council IV — O r a l p r o c e d u r e when adopting the regulations and not the decision of the appointing authority to reject their complaints. Since the The parties presented oral argument at Council regulations in question cannot the sittings on 19 and 20 February 1981. be the subject of a complaint within Article 90 (2) because they are not acts adversely affecting the applicants within The Advocate General delivered his the definition of Article 90 (2), it follows opinion at the sitting on 14 May 1981.

4 The third paragraph of Article 45 of Annex VIII (Pension scheme) provides that: "Beneficiaries may elect to have their pensions paid in the currency either of their country of origin or of their country of residence or of the country where the institution to which the official belonged has its seat: their choice shall remain operative for at least two years".

JUDGMENT OF 16. 7. 1981 — CASE 154/79

5 On 21 December 1978 the Council adopted Regulation (Euratom, ECSC, EEC) No 3085/78 (Official Journal 1978, L 369, p. 6), Article 1 of which states that Article 63 of the Staff Regulations is replaced by the following:

"Officials' remuneration shall be expressed in Belgian francs. It shall be paid in the currency of the country in which the official performs his duties.

Remuneration paid in a currency other than Belgian francs shall be calculated on the basis of the exchange rates used for the implementation of the general budget of the European Communities on 1 July 1978.

This date shall be changed, at the time of the annual review of remuneration provided for in Article 65, by the Council acting by a qualified majority upon a proposal from the Commission as provided in the first indent of the second subparagraph of Articles 148 (2) of the EEC Treaty and of 118 (2) of the Euratom Treaty.

8 In March 1979 the applicants (except for Mr Curtis), who are officials in the employment of the Parliament, submitted to the Parliament complaints pursuant to Article 90 (2) of the Staff Regulations of Officials which were directed against Council Regulation N o 3086/78. The applicants maintained that the alteration which that regulation made to the weighting brought about a reduction in the amount of the pension which they would have received if, on retirement, they had chosen to reside in the United Kingdom and they requested that the appointing authority decide that the amount of their pension would be calculated in accordance with the provisions of Article 45 of Annex VIII to the Staff Regulations and employing the weightings applicable before their amendment by Regulation N o 3086/78. On 30 June 1979 Mr Curtis, a former member of the temporary staff of the Parliament who is now retired and resident in the United Kingdom, submitted a similar complaint to the Parliament.

9 In July 1979 the Parliament informed the applicants, apart from Mr Curtis, that their complaints were not admissible inasmuch as they were directed against a Council regulation the application or non-application of which could not be regarded as falling within the discretionary powers of the Par­ liament.

10 In the action which they brought following that decision the applicants contend that Regulations N o 3086/78 and N o 3085/78 are unlawful on a series of grounds, namely infringement of an essential procedural requirement, violation of vested rights, infringement of the principle of the protection of legitimate expectation, lack of competence, infringement of the Staff Regulations and misuse of powers.

15 The applicants submit that the decision requested of the Parliament does not constitute a general decision not to apply the regulations but a decision not to apply them to a limited group of persons. The applicants maintain that, pursuant to Article 179 of the Treaty, they are entitled to bring before the Court the question whether or not the regulations, on a proper construction, are applicable to them and to rely on Article 184 of the Treaty in those proceedings.

16 The argument advanced by the Parliament must be upheld. The regulations in question are of general application and the applicants may not claim that they constitute decisions which are of direct and individual concern to them in order to call their validity in question in proceedings under Article 173 of the Treaty. The mere submission of a complaint pursuant to Article 90 of the Staff Regulations of Officials is not sufficient to create a judicial remedy

BILLER ν PARLIAMENT

against a measure which is in the nature of a regulation. Moreover, the procedure provided for in Article 90 (2) applies only where the appointing authority has taken a decision or has refrained from adopting a measure prescribed by the Staff Regulations and where such conduct by the appointing authority constitutes an act adversely affecting the official. That has not occurred in the present case. Consequently it was not possible for the applicants’ complaints to be based on Article 90 (2) of the Staff-Regulations. The action is therefore inadmissible and must be dismissed without its being necessary to consider the substance.

2. Orders the parties to bear their own costs.

Koopmans O'Keeffe Bosco

Delivered in open court in Luxembourg on 16 July 1981.

A. Van Houtte T. Koopmans Registrar President of the First Chamber