C-737/79

JUDGMENT OF IS. 12. 1982 — CASE 737/79

In Case 737/79 DINO BATTAGLIA, an official of the Commission of the European Communities at the Joint Research Centre, Ispra, Varese (Italy), represented and assisted by Marcel Slusny of the Brussels Bar, with an address for service in Luxembourg at the Chambers of Victor Biel, Advocate, 18a Rue des Glacis, applicant, v

COMMISSION OF THE EUROPEAN COMMUNITIES, represented by its Legal Adviser Joseph Griesmar, acting as Agent, assisted by Daniel Jacob of the Brussels Bar, with an address for service in Luxembourg at the office of Oreste Montalto, a member of its Legal Department, Jean Monnet Building, Kirchberg, defendant,

APPLICATION in the terms set out in the applicant's conclusions,

THE COURT (First Chamber) composed of: A. O'Keeffe, President of Chamber, G. Bosco and T. Koopmans, Judges,

Advocate General: F. Capotorti Registrar: P. Heim

Council and the Commission have, since Servants of the European Communities 1967, used the following procedure for employed or having a home in Italy comparing the level of prices between (Official Journal No L 369 p. 10) Brussels and the various other places of provides that: employment. The Statistical Office of the European Communities, in conjunction with the competent national offices, carries out regular price surveys in "With effect from 1 January 1978, the respect of goods and services considered weighting applicable to the remuneration as representing typical items of household expenditure for officials in the of officials employed in Italy shall be various places of employment. In respect 146.4." of each item the relationship is calculated between the price in Brussels and the price prevailing in the town which is used as the point of reference for the That regulation was adopted in the place where the official performs his following circumstances: duties. By the use of this weighting it is possible to calculate the relative pur- chasing power of currencies in the countries where the officials of the Community perform their duties. For The fall in the value of the Italian lira example, the index calculated using the which depreciated rapidly at the end of "Fisher" method expresses in a single 1975 and the beginning of 1976 and the figure the relationship of prices in monetary measures taken by the Italian Brussels to those in Rome and vice vena. Government as a result brought about That figure is used for calculating the strong inflationary pressure. It led the weightings within the Community staff representatives in Ispra to submit a because, it expresses the relationship of number of pay demands based on their prices from one town to another in a claims that the weighting for Italy no reversible manner and because it is longer reflected the widening gap therefore possible to make not only between the cost of living in Brussels and bilateral but also multilateral price Ispra and that the weighting calculated comparisons. According to this method, according to the "Fischer" method led in the weighting is obtained by dividing the particular to a large gap between the par "Fisher" index calculated as described value of the lira in relation to the Belgian above, by the corresponding rate of franc on the currency markets and the exchange used to convert the remuner- equivalent value in lire of the remuner- ation of officials into the respective ation paid to officials at Ispra and national currencies in accordance with considerably reduced the external pur- Article 63 of the Staff Regulations. In chasing power of the remuneration. October and November 1975 a comparative nudy of prices was carried out in all the capitals of the Community.

istical data were available. The Council May 1976. The staff representatives did not accept that proposal and on 29 |uestioned the statistical method used to June 1976 (Regulation No 1592/76) fixed the weighting at 176.6 for Italy as ?ix the weighting and sought to have it amended. They considered the large gap from 1 January 1976, as against 157.8 between the purchasing power parities for Belgium. and the monetary parities of remuner- ation paid in lire to be incompatible with the principle of the equal treatment of officials. That was the result in particular of the fact that prices of imported goods react much more quickly to the appreci- The statistical inquiries to which the ation of a currency on the currency Commission referred were conducted by markets than the general price level. the Statistical Office in May 1976 in the Equality of treatment in regard to pay Province of Varese. An inquiry into rent can be attained only by reference to a levels was then taken into account. The common European "basket" of goods ensuing report found that there was a and services which are qualitatively and difference of 8.5% between the quantitatively identical. The Commission weighting for Italy, calculated for Varese representatives rejected that basis of by the Statistical Office to be 121.5 to reference but they did agree that the the base 100 for Brussels and the purchasing power parities used to weighting for Italy adopted by the calculate the weighting might present Council (112.04 to the base 100 for some distortion. By a telex message of Belgium). Of that 8.5%, 6.7% was 12 December 1977 the staff repres- attributed to the widening gap between entatives asked the Member of the the cost of living index in Italy and that Commission reponsible for administrative in Belgium from December 1975 to June matters, Mr Tugendhat, to make repres- 1976. According to the Statistical Office entations to the Council in order to have approximately 2% might be attributed to the weighting for 1977 acknowledged to the difference in price levels between the be provisional. Varese and Rome regions.

its report of 26 July 1978 that party 1 January 1978 to 30 June 1978. At the recommended the Commission to submit same time there were paid the arrears to the Council a proposal based on these due in respect of the period from 1 July points: 1978 to 31 December 1978 under Council Regulation No 3084/78 of 21 December 1978 adjusting the remuner- The 1967 list of consumer goods to be ation and pensions of Officials and brought into line with that used for the Other Servants of the European 1975 inquiry; Communities and the weightings applied thereto (Official Journal L 369, p. 1), which fixed the weighting for Italy at The price adopted in 1975 to be adopted 146.8 with effect from 1 July 1978. and extrapolated to 1978 using common indices (namely for Rome and Brussels) ; 2. By two complaints dated 26 March and 6 April 1979, formulated in the same Justification of the use of those prices by terms as some 40 other complaints the need to introduce a system enabling lodged at the same time, the applicant, weightings to be regularly adjusted. without challenging the calculation made on the basis of Regulation No 3084/78, contested the calculation made in The Commission representatives stated pursuance of Regulation No 3087/78 on that the method proposed should apply the ground that it was not retroactive to to the weighting as from 1 January 1978 1 January 1976. while the staff representatives believed there was justification for applying it from an earlier date and reserved their freedom of action before the Council on On 12 July 1979 the Commission this point. They also pointed out that rejected the complaints. some disparity still remained owing in particular to the differences in prices between Rome and Varese. This application was brought on 17 October 1979 at the same time as the other similar applications (Cases 736 and 738 to 780/79). The working party's recommendations were incorporated in the Commission's proposal to the Council of 10 November 1978 to increase the weighting by 6.4% On 10 January 1980 the Commission as from 1 January 1978 (Doc. COM(78) raised an objection of inadmissibility 591). During the discussions at Council pursuant to Article 91 of the Rules of level the staff representatives refused to Procedure. accept 1 January 1978 as the date for the entry into force of the amended weighting. It was subsequently decided that this case should become a test case.

procedure on ihat objection without any Varese; and that the Commission preparatory inquiry. should be required to calculate that amount of salary and to pay it, At the sitting on 19 February 1981, the subject to the right to apply to the parties presented oral argument on the Court if the parties should fail to admissibility of the application. reach agreement; The Advocate General delivered his 4. Declare and adjudge that the normal opinion on the admissibility of the legal rate of interest in Italy should be application at the sitting on 14 May added to the sums to be paid; 1981. 5. In the alternative, declare that the By order of 30 June 1981, the Court defendant has committed the (First Chamber) decided to reserve its wrongful acts or omissions indicated decision on the objection for the final in the application; judgment. Order it therefore to pay by way of Upon hearing the report of the Judge- damages the amounts set out under Rapporteur and the views of the 3., together with the interest set out Advocate General, the Court (First under 4; Chamber) decided to open the oral 6. In the further alternative declare that procedure on the substance of the case the conditions set out in Article 65 (2) without any preparatory inquiry. of the Staff Regulations of Officials have been met since 1 January 1976 and that it is therefore for the Council, II — Conclusions of the parties of Ministers to adopt measures appro- priate to ensure that the salary of The applicant claims that the Court officials and other servants is calculated in conformity with the should: principles laid down in Articles 64 and 1. Declare null and void the defendant's 65 of the Staff Regulations of decision settling the arrears owing to Officials and that there is no discrimi- the applicant by limiting them to 1 nation between them, whatever may January 1978 without taking into be the place of performance of their account the cost of living peculiar to duties; the Province of Varese; 7. Order the defendant to pay the costs. 2. Declare inapplicable Regulation No 3087/78 of the Council of Ministers The Commission contends that the Court and in particular Article 1(1) thereof should: inasmuch as the latter restricts retro- activity to 1 January 1978 under Dismiss the application as inadmissible Article 184 of the EEC Treaty, Article and in any event as unfounded; 156 of the EAEC Treaty and the third Order the applicant to pay the costs. paragraph of Article 36 of the ECSC Treaty; In his reply the applicant claims that the Court should: 3. Making use of its unlimited jurisdiction, declare and adjudge that Appoint an expert or a college of experts there is due to the applicant for the with the task of determining the cost of period from 1 January 1976 to 1 living in Italy and in the Province of January 1978 an additional amount of Varese as from 1 January 1976 until the salary regard being had to the cost of date referred to in Regulation No living peculiar to the Province of 3087/78;

Determine the weightings applicable to the weighting, the Council has failed to Varese as from 1 January 1976 until the fulfil its obligations under Article 65 (2) date fixed in Regulation No 3087/78. of the Staff Regulations. That provision lays down a mandatory rule to be applied within a given period, namely two months at the most. The concept of a substantial change in the cost of living is objective in nature and the Court is able to appraise it as it does in a similar III — Submissions and argu- way when applying Articles 85 and 86 of ments of the parties the Treaty. The applicant requests the Court to declare null and void the application made by the Commission of Article 1 (l)'.of Regulation No 3087/78 and at the same time to declare the contested provision inapplicable under In his application the applicant first raises Article 156 of the EAEC Treaty. the question whether the Commission's reply of 12 July 1979, which was intended as an express rejection, is not open to serious criticisms on formal and substantive grounds and whether its validity must not therefore be called in The Court is requested in the second question. That reply is collettive in submission to make use of its power of nature and it is impossible to determine unlimited jurisdiction under Article 91 precisely who are the addressees, (1) of the Staff Regulations to uphold whether they are adversely affected by the personal right of the applicant to his that reply and, if so, as at what date. The salary, provided for by Article 62 of the reply is all-embracing and relates not Staff Regulations, by ordering the only to the complaint in question but defendant to pay to him the additional also to complaints made on the basis of amount of salary which he would have Council Regulations Nos 3085 and received with effe« from 1 January 1976 3086/78. Article 25 of the Staff Regu- if the weighting had been made retro- lations provides that any decision active to that date and if account had adversely affecting an official must be been taken of the specific level of the accompanied by a statement of the cost of living in Varese. reasons on which it is based. However, the Commission's reply contains no reasons explaining why the retroactivity of the application of the weighting of 6.4% is restricted to 1 January 1978. Only the confirmatory memorandum of 27 August 1979 is therefore capable of The applicant's third submission is to the being regarded as an express rejection in effect that the manner in which the due form. Commission applied Regulation No 3087/78 not only conflicts with the wording of Articles 64 and 65 of the Staff Regulations but is a breach of the general principle of non-discrimination The applicant claims in his first between officials and other servants, submission that, by limiting to 1 January wherever they perform their duties. The 1978 the retroactivity of the raising of Commission's liability for disregarding

the principle of non-discrimination which been substantially devalued". The Court it was required to observe as regards its might perhaps not restria itself to noting own officials is all the more striking the obligations stemming as regards the since the defendant itself has reaffirmed, Council from Articles 64 and 65 of the as if reaffirmation were needed, its Staff Regulations. It might appraise to attachment to the principle of non- what extent and as from what date there discrimination between officials per- was a substantial change in the cost of forming their duties at different places of living, thus exercising powers analogous

The measure correct had been applied with effect adversely affecting the applicant is said from 1 January 1976. to be the Commission's decision to pay to the applicant arrears of salary with retroactive effen limited to 1 January The fourth submission is to the effen 1978, without taking account of the cost that the repudiation of the applicant's of living peculiar to the Province of right to his salary (a personal right Varese. In January 1979 arrears of salary conferred by Article 62 of the Staff were paid to the applicant in Regulations) likewise constitutes a failure implementation, on the one hand, of by the Commission to fulfil its general Regulation No 3087/78 and, on the duty of assistance embodied with regard other, of Regulation No 3084/78 to special cases in Article 24 of the Staff altering with effect from 1 July 1978 the

The calcu- In the alternative the applicant claims lation of salary arrears for the period that in any event, in accordance with the subsequent to 1 July 1978 is therefore principle which it laid down in its not at issue, since it must be regarded as judgment in Case 28/74 Gillet [1975] having become definitive. ECR 463, the Court might point out to the Council that "it is for the Council to The Commission takes the view that the adapt the regulations to economic claim for arrears of salary for a period realities and thus to seek the means of prior to 1 January 1978 is inadmissible alleviating any loss suffered by officials since it is tantamount to a challenge, residing in a country whose currency has made outside the time-limits, to the

various successive measures of the Court has already had the opportunity of administrative authority which at the declaring that the inadmissibility of a material time calculated the applicant's claim for annulment entails the monthly remuneration. To challenge the inadmissibility of a claim for damages 'decision relating to the salary arrears which is closely connected to the claim amounts to challenging successive calcu- for annulment (cf. Case 4/67 Collignon- lations of remuneration from January Mttller [1967] ECR 470).

made during that period. As such it can 1 January 1978 and not from 1 January found no right of action, regard being 1976. The Commission therefore had to well-settled authority to the effect requests the Court to affirm its pre- that a confirmatory measure is not a viously-mentioned case-law in Kortner measure capable of adversely affecting since the present case is strikingly similar an official. On the other hand, none of to that case. the administrative decisions calculating the monthly instalments of salary paid to the applicant from January 1976 to December 1977 was ever the subject of a complaint, still less was any legal action The application is also inadmissible to brought in respect of them. The Court is the extent to which it is brought as an therefore faced with a situation similar to application for a declaration since the that which came before it in the 81 Court has jurisdiction in contentious Joined Cases 15/73 etc. Kontier and staff matters pursuant to Article 179 of Others c Commission, Council end Par- the Treaty "within the limits and under liament [1974] ECR 177. the conditions laid down in the Staff Regulations".

annulment. In Case 32/68, Grasselli, The Commission considers that the head already referred to, the Court already of claim seeking damages for alleged had the opportunity of declining wrongful acts or omissions by the jurisdiction. As far as its judgment in defendant is, like the foregoing heads of Case 28/74, Gillet, also previously cited, claim, manifestly inadmissible. In fact the is concerned, which the applicant relies

2. In his observations on the The Court has already acknowledged in Commission's objection of inad- a number of other types of cases (though missibility, the applicant claims, as the general principles laid down by it are regards the alleged inadmissibility oí the of general application) that a sufficiently application in so far as it is brought as material new fact causes the periods for an application for annulment, that in bringing an action to surt to run again. relation to the weighting mentioned in The applicant does not doubt that in the Article 65 (2) of the Staff Regulauons it present case the publication of Regu- is not a question of a personal right lation No 3087/78 amounts to a material relating to a given amount or an amount new fatt in relation to the previous easily determinable. That provision situation and forms part of the confers no direct and immediate right of "political" negotiations begun in the the official but creates a duty for the beginning of 1976. Apparently for Council and not for the institution by financial reasons the Council on this which the official is employed, a duty occasion fixed the retroactivity at one which is political in nature and which the year. official cannot enforce by means of the procedure open to him, contained in Articles 90 and 91 of the Staff Regu- lations. The applicant was therefore not entitled to submit a claim or a complaint to the Council, still less could he have These proceedings are in reality to do brought an application before the Court. with the frustration by the Commission He had to await the outcome of the of the legitimate expectations of officials. "political" negotiations between the local That constitutes a wrongful act or Staff Committee and the staff represen- omission by the Commission, which was tative bodies — negotiations which led wrong not to ensure that the problem of to the regulation which is specifically updating the weighting was settled with challenged by the applicant on the the shortest possible delay and could not ground that t the retroactivity provided in any event be heard now to plead the for therein does not correspond to the lateness of the complaints. This principle objeaive nature of the problem. If each is to be found in the Anglo-Saxon payment of salary since 1 January 1976 doctrine of estoppel. Under that principle

the Commission, which itself is had not been drawn up and that order responsible for the delay, cannot prevent was made even though he failed on a officials from lodging complaints now principal head of claim for the which it could not have claimed were out annulment of a decision taken to re- of time if the Commission itself had not assign him. brought about a situation from which the alleged lateness arises. To the extent to which the application is brought as an application for a The applicant does not dispute that the declaration the applicant observes that the Court might express its views on the Court's power of unlimited jurisdiction, substance even though it upholds which would enable it to order the submissions of inadmissibility or lack of Commission to pay arrears of salary, can jurisdiction. apply only if the Court had jurisdiction to annul, which would not be the case if for example the application were out of time. 3. In its' defence, the Commission replies that it would have been sufficient for the applicant to bring a single The applicant is amazed that the complaint against the salary statement Commission states that this case is relating to January 1976 to enable the "strikingly similar" to the Kortner case. Court, by means of an application That case was quite different; it brought following the rejection of that concerned female officials who complaint, to be validly seised of the considered that they were entitled to an whole problem of the absence of retro- allowance like some of their colleagues activity between January 1976 and who, having obtained it by bringing an December 1977. application at the appropriate time, considered that a fresh decision by the Court definitively constituted a new fact. In these proceedings the new material It puts forward a further submission of fact is not a fresh decision but a Council inadmissibility affecting the application regulation. Here, neither the claim nor to the extent to which it relates to the the allegation on which this case is failure to take into consideration in the founded is indissolubly connected with contested decision the cost of living the claim for annulment or for the peculiar to the Province of Varese. In payment of supplementary remuneration. fact that question was not made the Nor is it sufficient that the damages are subject of a complaint. It is clear from calculated on the basis of that sup- the case-law of the Court that legal plementary remuneration for it to be proceedings must be preceded by a claimed that there is such a link (and complaint and that, in any event, heads how could it be otherwise?) To assert of claim put forward at the stage of the that such a link exists would be to deny application may alter neither the basis that the Court may order an institution nor the subject-matter of the complaint. to pay damages to an official for a wrongful act or omission independently of any annulment of a measure. In Case 61/76 Gei« [1977] ECR 1419 the Court It draws justification for its argument ordered the Commission to pay damages from the Opinion of Mr Advocate to an official because his periodic repons General Capotorti of 14 May 1981 in

4. In the reply the applicant claims that, in a situation characterized by problems of great technical complexity, he relied 5. In its rejoinder the Commission upon the staff representatives and was stresses that, if the applicant's argument not concerned to worry himself to the effect that the absence of any personally about his individual situation personal right in his eyes excuses him which could be gleaned from a perusal from not having made any complaint — though difficult and uncertain — of concerning the amount of his salary the salary statements. The administration calculated during 1976 and 1977 were did not reply clearly to each official or well founded, the question might arise other servant. It drafted a reply dated 11 how he suddenly obtained a personal July 1979 which was rather a kind of right as from 1 January 1978 whereas circular confusing the various complaints that was not the case in 1976 and 1977. directed against the different regulations In any event it is certainly not in Regu­ and which certainly did not constitute an lation No 3087/78 that such a right express rejection of the complaints made might find its basis for the period 1976 by each of the parties concerned and 1977 since that regulation, raised the including the applicant himself. It follows rate of the weighting in question only that the complaints made cannot be with effect from 1 January 1978. treated as normal steps preceding an application to the Court, such as those which are taken where an official is faced with a problem peculiar to him. The applicant deliberately chose not to make any complaint in 1976 and 1977, no doubt hoping to obtain satisfaction as the indirect result of a regulation which The Court has consistently held that an would come into force with retroactive applicant may introduce additional heads effect to 1 January 1976. of claim provided that they are contained by implication in the heads of claim originally formulated. The applicant concludes from private procedural law The reply to the applicant's complaints, (the objection obsatń libelli) that the dated U July 1979, even if it appeared in head of claim seeking a decision by the the form of a circular, was addressed Court on the supplementary salary due personally to the applicant. Moreover, in as a result of the difference in the level the absence of an express rejection of a of the cost of living in the Province of complaint, an implied decision of Varese in comparison with that in Rome rejection is deemed to occur four months does not amount to a new factor from after the making of the complaint, by the defendant's point of view. In any virtue of Article 90 (1) of the Staff Regu­ event if the defendant wished to raise lations. In any event, this action was that objection it ought to have done so brought before the Court within the at the outset of the proceedings. Finally, proper period following the notification the applicant maintains in the alternative of the express rejection of the

complaints. On the other hand, no direct the judgment which it gives and in which action was brought before the Court in it decides on admissibility and possibly either 1976 or 1977 concerning the level whether the application is well founded. of the Italian weightings applicable In that connection it is quite unnecessary during that period. to make a separate claim which would be a superfluous addition to the conclusions seeking annulment and compensation. It is impossible to have recourse to the concept of obscuri libelli in an attempt to escape the sanction of inadmissibility since the wording of the complaints is B — The substance entirely clear and contains no reference

The proposal to the Council is a measure price surveys themselves were carried out capable of being challenged, the in October and November 1975; applicant ought to have made a however, by the use of the index of complaint within a period of three prices in Rome and Brussels established months following the date on which he in December 1977 those prices were acquired knowledge of it and that to extrapolated in such a way that the claim that the Commission is liable weighting finally adopted is based on the likewise presupposes the existence of cost of living in Brussels and Rome in damage and a connection between that December 1977.

JUDGMENT OF IS. 12. 1982 — CASE 737/79

discretion. Also, the staff representatives of prices carried out in the Province ot several times stated that they Varese in May 1976 affecting 230 items acknowledged that the retroactivity of and services, whilst the price surveys the new weighting should go back only carried out in Brussels and Rome as far as 1 July 1977, or even 1 January concerned 700 items and services. Fur- 1978, thus acknowledging that on an thermore, that result was obtained by the objective view retroactivity was not use of a weighting scheme drawn up necessary at all. following a survey dating back to 1967, which, admittedly, had been brought up to date, and recourse was not had to a fresh survey in view of the opposition, mentioned above, from the unions and staff associations.

BATTAGLIA v COMMISSION

in Italy. Supposing even that in its proposal for a regulation submitted to the Council the Commission ought to have stated 1 January as its date of entry into force, it is already beyond question The applicant considers that the words that that date would not have been "if appropriate" appearing in Article 65 accepted by the Council, as stated pre- of the Staff Regulations should not be viously; therefore, even if it had to be understood as enabling the Council, in conceded that by not proposing a date to its discretion, to determine retroactivity the Council, the Commission committed but that retroactivity must be given to a wrongful omission, it is clearly the measures which it adopts if the established that such omission has no circumstances warrant it and the oppor- causal connection with the damage tunity presents itself. Moreover, the pleaded by the applicant. wording of Article 65 (2) itself gives to the Council a maximum period of two months within which to take the

question of retroactivity. In the present case, there is no dispute as to the 2. In his reply, the applicant derives determination of the weighting, there support for his argument from the being no problem over the increase of document of the Statistical Office of the 6.4%. It is over the period of retro- Communities annexed to the proposal activity that the parties are divided and, for a regulation submitted by the in that respect, it appears that the Commission to the Council on 10 Council took a decision inspired by the

JUDGMENT OF 15. 12. 1982 — CASE 737/79

In any event, the applicant considers that the parties will have to reply to the questions which the Court may think fit In reply to the Commission's assertion to ask them or that the Court will have that the claim relating to the cost of to ask one or more experts to enlighten living peculiar to Varese is not founded it. on any submission, the applicant states that an application is a single entity and that the submissions must supplement one another; as regards this head of As regards the third submission, the claim the third submission is perfectly applicant states that he did plead the explicit; it relates both to Articles 64 and inapplicability of the regulation which is 65 of the Staff Regulations and to the the second head of claim appearing in principle of non-discrimination. As his conclusions.

merely the Member States but also Switzerland, the United States, Israel and so forth. Finally, there are places As far as the fourth submission is and places. Even if it were necessary to concerned, the Bode case is quite fix a standard figure for places different from this one: there the employing only a few officials and other applicants asked that the institution in servants it could not be the same for the question protect them from the

consequences of a monetary measure by 1.3% from the weighting calculated adopted by their State of origin. by the office for Varese. Therefore, if the applicant considers that the rates at which the Italian weightings were fixed in 1976 and 1977 are vitiated by illegality it would be appropriate to seek not the retroactive application to 1 January 1976 of the rate which came into force on 1 January 1978 but he should request that four new rates be fixed, to be calculated on the basis of four price surveys respectively carried out on the basis of information as at 1 January and 1 July 3. In its rejoinder the Commission 1976 and 1977. It would also be recalls that the weighting, which entered necessary, whilst adhering to principles, into force on 1 January 1978, was fixed to lay down four weighting schemes, by reference to factors updated in based on the results of four surveys of relation to those used when the officials' family budgets conducted on weightings for the preceding periods the basis of the information available at were drawn up. That reform therefore the aforementioned dates. The weighting represents some progress, which does not adopted by the Council in Regulations however mean to say that the weightings Nos 3084 and 3087/78 is the result of a fixed at various rates between 1 January compromise including both the rate of 1976 and 31 December 1977 must be increase applied and the date of entry regarded as conflicting with Article 65 into force. (2). On the contrary, it should be remembered that in May 1976, the Stati- stical Office carried out, at the Commission's request, an inquiry into prices in the Province of Varese. It is clear from the Office's report that, of the difference of 8.5% existing between the weighting for Italy as calculated for Varese (121.5 as against 100 for Brussels) and the weighting for Italy adopted by the Council (112.04 as against 100 for Belgium), 6.7% was attributable to the widening gap between As to the second submission, by giving the cost of living indices in Italy and for the first time in his reply a legal Belgium from December 1975 to June footing to the claim to have\he cost of 1976. On 30 December 1976 the Council living peculiar to Varese taken into adopted Regulation No 3077/76 account, the applicant is disregarding the (Official Journal L 359, p. 1) by which terms of Article 42 (2) of the Rules of the weighting for Italy was increased, Procedure which forbids the raising qi with effect from 1 July 1976, to 189.3 for fresh issues in the course of proceedings)- Italy as against 157.8 for Belgium. With In the alternative, therefore, the effect from 1 January 1977 the weighting Commission replies that the figures was fixed at 120.1 for Brussels. The produced by the applicant are hardly weighting fixed by the Council with explicit. As regards the price indices for effect from 1 July 1976 at 189.3 or Rome and Varese, those figures relate to 119.16 as against the basic weighting of 1966, 1970 and 1976 without any 100 for Brussels therefore differed only indication as to whether what is referred to is the index relating to the year stated

or the average index of the period Commission, on adopting a new regu- preceding thai year. For its part, the lation in compliance with the judgment Commission refers to the tables drawn to pay to the applicant the arrears of up by the Statistical Office on 1 June of salary corresponding to the application each year of the respective costs of living of the new weighting between 1 January for the period 1970 to 1981 in each of 1976 and 31 December 1977. Or else the Brussels, Rome and Varese. It may be first submission may be declared seen from those tables that, having been unfounded and the lawfulness of Regu- slightly greater in Varese in 1971, the lation No 3087/78 would be affirmed, in increase in the cost of living was greater which case it is self-evident that to apply in Rome in 1972 and 1973, then lower a regulation recognized as valid or to than that in Varese between 1974 and have proposed the adoption of such a 1979. Since 1979, the increase in the cost regulation to the Council cannot of living has again been greater in Rome. constitute a wrongful act on the part of If the whole of the period in question is the Commission. In reality, no causal considered, the cumulative increase in connection between the alleged wrongful the cost of living was greater by 3.71% act and the damage alleged has been in Varese than in Rome, that is to say established since the staff representatives on average 0.33% per annum. The accepted that the new Italian weighting difference is so slight that it is sufficient would come into force only with effect if the trend observed over the last two from 1 June 1977 and the President years, namely a rate of increase greater of the Permanent Representatives by 1.8 % per annum in the cost or living Committee let it be known that in his in Rome, continues until June 1983 for view an amended proposal fixing the arithmetical equality to be achieved in date of entry into effect as 1 July 1977 living costs as between Rome and Ispra had no chance of success. Finally, it is in the period from June 1970 to June clearly not for the Commission to bring 1983. Generally, the Commission an application against the Council on the considers that the discretionary power ground of the illegality of Regulation No conferred on the Council, when it is 3087/78. Moreover, it would be faced with a complex economic situation, inconceivable for the Commission to allows it to take the view that a change bring an application challenging the in the cost of living of the order of that legality of a regulation which is in found in the present case does not conformity with the original proposal constitute a "substantial" change within which preceded it. the meaning of Article 65 (2) of the Staff Regulations.

2 Until the end of 1978 the Suff Regulations provided that an official's remuneration was to be expressed in Belgian francs and weighted at a rate above, below or equal to 100%, depending on living conditions in the various places of employment.

3 From 1975 officials employed at the Joint Research Centre in Ispra complained to the Commission that the cost of living in Italy had considerably increased and accordingly requested that the weighting for Italy be revised. They complained in particular that in their opinion the cost of living in the Province of Varese was higher than in Rome and they urged the Commission to take account of that difference when fixing the weighting applicable to their remuneration.

JUDGMENT OF 15. 12. 1982 — CASE 737/79

4 In 1976, 1977 and 1978 consultations on technical matters took place between representatives of the staff and those of the Commission and Council but no agreement was reached on the alteration of the weighting or on the date to which the new weighting should have retroactive effect. In the meantime by a series of regulations the Council had increased the weighting for Italy as from 1 January 1976 to 176.6 as against 157.8 for Belgium, as from 1 July 1976 to 189.3 as against 157.8 for Belgium, as from 1 January 1977 to 120 as against 100 for Belgium, as from 1 January 1977 to 132.1 as against 104.5 for Belgium, and as from 1 July 1977 to 130.2 as against 100 for Belgium. In most cases those regulations had a retroactive effect of about six months.

s On 26 June 1978 the Council adopted Regulation No 1461/78 (Official Journal L 176, p. 1) by which the weighting for Italy was fixed at 137.6 as against 102.3 for Belgium. The recitals in the preamble to that regulation state that "a decision on the Commission proposal for the correction of the weightings for three countries of employment will be taken only in the light of a study to be carried out by the Commission".

11 The applicant then brought this application in which he seeks the annulment of the Commission's decision settling the applicant's arrears of remuneration by limiting them to 1 January 1978 without taking into account the cost of living peculiar to the Province of Varese; a declaration that Regulation No 3087/78 is not applicable to him in so far as it limits its retroactivity to 1 January 1978; and an order to the Commission to pay the applicant by way of compensation an amount calculated as if the weighting at present agreed had been applied as from 1 January 1976 together with interest.

Admissibility

12 The Commission claims that the application is inadmissible because the calcu- lation of arrears carried out in January 1979 was in the nature of a confirm- ation of the monthly calculations of salary made during 1976 and 1977 and such payment of arrears does not therefore constitute a measure capable of founding an independent right of action, particularly since no complaint was made at that time against the calculations of salary for the years in question.

1 3 Regard being had to the circumstances of the case, the Commission's objection cannot be accepted. In fact, although it is important to safeguard the application of the rule contained in the Staff Regulations which provides for a prior complaint through official channels within a relatively short period consideration must be given to the fact that, as negotiations had been going on for many months between the Council, the Commission and staff representative bodies, the applicant was legitimately entitled to await the

17 As regards the weighting applied to officials employed in Ispra, the applicant is pursuing two objectives. First he seeks to obtain a revision of the amount of the weighting which, in his view, ought to be calculated on the basis of the cost of living at the official's exact place of employment, in this case in the Province of Varese, and not automatically in the capital of the country in question. In this case, the applicant maintains that the cost of living in the

BATTAGLIA v COMMISSION

Province of Varese was, during the years 1976 to 1978, substantially higher than in Rome. Secondly the applicant requests that the weighting for Italy, fixed at 146.4 by Regulation No 3087/78, be applied retroactively to 1 January 1976.

18 The applicant challenges the arrears of salary, calculated on the basis of Regulation No 3087/78, which, in his view, are in breach of Articles 64 and 65 of the Staff Regulations relating to the weighting, Article 24 of the Staff Regulations relating to the Commission's duty of assistance towards its officials and the principle of non-discrimination and the rules which require respect for essential procedural requirements.

19 The applicant thus first puts forward the argument that Regulation No 3087/78 infringes Article 64 of the Staff Regulations inasmuch as the surveys of the Statistical Office of the Communities for determining the weighting were carried out with reference to living conditions in the capital and not at the place of employment situated in the Province of Varese.

20 It should be noted that in the past the Council has interpreted Article 64 of the Staff Regulations as pointing not necessarily to the capital of the country of employment as the place of employment but, according to the circum- stances of the case, the precise place of employment. Thus Regulation No 1/67/ECSC, 988/67/EEC and 9/67/EAEC of the Council of 12 December 1967 provided two weightings both for France (130.5% for Pans and for certain departments and 122.5% for the rest of the country) and for Italy (114% for Ispra and 114.5% for the rest of the country). It was only later that the Council decided to use a single weighting for each Member Sute.

Varese in May 1976 taking into consideration 230 items of expenditure (excluding rent, heating and electricity which were the subject of a later investigation) that the cost of living in that province was 7.66% higher than in Rome. After the result of the investigation carried out in Varese on the level of rents had been taken into account, the difference was reduced to 2.76°/o which still represented a substantial difference within the meaning of Article 65 (2) of the Staff Regulations. Moreover it is clear from the reasons accompanying the Commission's proposal which led to Regulation No 3087/78 that the Commission itself entertained doubts as to whether sole reference to the cost of living in Rome was well founded since it stated that: "The use of a single weighting for each country of employment, worked out for the capital, places staff working in Ispra at a slight disadvantage. The statistics available show that the cost of living in Rome has risen less rapidly than in the Varese area, from which it may reasonably be assumed that prices in Rome are now lower than in Varese. This existence of lower prices in the capital than elsewhere is the exception rather than the rule in the Nine. In view of the number of staff employed in Ispra a special local price survey would appear justified. However, the Commission feels that it would be wiser not to innovate in this direction and to abide by the Council Decision of 1968, which provides specifically for the use of the price indexes relating to the capitals."

23 Under those conditions, in order that the rule contained in Article 64 of the Staff Regulations to the effect that account must be taken of living conditions in the various "places of employment" may be observed, that expression must be understood as meaning not only the capitals of the Member States but the exact places where the duties of a sufficiently large number of officials and other employees of the Communities are performed.

29 That submission is therefore well founded.

30 Consequently it is not necessary to examine the other submissions put forward by the applicant which were put only in the alternative.

JUDGMENT OF 15. 12. 1982 — CASE 737/79

j, T h e applicant's salary statement for the month of January 1979 must therefore be annulled, in so far as it is restricted to giving effe« to Council Regulation N o 3087/78, both as t o the amount of the adjustment ot the weighting and as to the retroactive effect of that adjustment, together-wxxh the decisions rejecting the applicant's complaints. Regulation N o 3087/78 is not applicable to the applicant in s o far as it takes no account of the cost ot living in Varese and limits the retroactive effect of the adjustment ot the weighting to 1 January 1978.

32 Since it may be expected that the competent institutions will take the measures necessary to comply with this judgment, examination of the claim for compensation for the pecuniary damage suffered by the applicant is deferred to a date to be fixed later if necessary.

33 Before 15 July 1983 the Commission shall report to the Court on the measures taken to compensate the applicant; the applicant will be given an opportunity to reply.

3. Defers examination of the claim for compensation for the pecuniary damage suffered by the applicant to a date to be fixed later if necessary;

4. Reserves the costs.

O'Keeffe Bosco Koopmans

Delivered in open court in Luxembourg on 15 December 1982.

J. A. Pompe A. O'Keeffe Deputy Registrar President of the First Chamber

OPINION OF MR ADVOCATE GENERAL CAPOTORTC