C-35/81

JUDGMENT OF T H E COURT (FIRST CHAMBER) 3 DECEMBER 1981 1

Henri Etienne v Commission of the European Communities

(Officials — Reference period for calculating pension)

Case 35/81

Officials — Pensions — Pension rights acquired before entry into the service of the Communities — Transfer to the Community scheme — Detailed rules — Grade or establishment to be taken into account — Official engaged before the entry into force of the Staff Regulations (EEC Treaty, Art. 246 (3); Staff Regulations, Art. 102 and Annex VIII, Arts 11 (2) and 48)

It follows from the provisions of Article to have become established before the 246 (3) of the EEC Treaty, the Staff Regulations entered into force. provisions of Article 102 of the Staff That is true, in particular, for the Regulations of Officials and Article 48 of purposes of the application of Article 11 Annex VIII thereto that an official who (2) of Annex VIII to the Staff Regu- took up his duties on the basis of a lations which relates to the transfer of contract concluded prior to the adoption pension rights. of the Staff Regulations may not claim

T H E COURT (First Chamber)

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

Advocate General: F. Capotorti Registrar: H. A. Rühl, Principal Administrator

gives the following

JUDGMENT

Facts and Issues

By letter of 3 December 1958, the By note of 23 April 1980, the applicant applicant was informed that the lodged, pursuant to Anicie 90 (2) of the Commission had placed him in Grade Staff Regulations, a complaint against A 6, Step 3. However, his attention was the decision contained in the note of the drawn "to the fact that at the present Personnel Directorate of 17 April 1980 stage of the organization of the to take 1 January 1962 as the date of his Community, this engagement can be establishment for the purpose of applying only provisional in nature." The letter Article 11 (2) of Annex VIII to the Staff added: "This situation will be terminated Regulations. as soon as possible by the conclusion of contracts of limited duration. It must be understood, however, that this letter is That provision lays down that: without prejudice to the grant of such contracts". "An official who enters the service of the Communities after leaving the service of a government administration or of a At its 101st meeting on 12 April I960, national or international organization or the Commission appointed the applicant of an undertaking shall have the right, as Deputy Chef de Cabinet to Mr on becoming established with that Schaus, a Member of the Commission, in Community, to pay to it either: Grade A 3 , Step 1, with effect from 1 May of that year. At its 170th meeting on 18 December 1961, it decided to — The actuarial equivalent of retirement transfer him to the Commission's Sec- pension rights acquired by him in the retariat and to appoint him head of the government administration, national Liaison with the Community Institutions or international organization or and European Assemblies Division, undertaking: or leaving him in Grade A 3 whilst auth- orizing him to take up his duties on a provisional basis in the cabinet of Mr Schaus until his replacement (which — The sums repaid to him from the occurred only on 17 December 1962). pension fund of the government administration, organization or under- taking at the date of his leaving its service. Pursuant to Articles 1, 2, 3, 7 and 102 of the Staff Regulations of Officials of the European Communities, which entered In such case the institution in which the into force on 1 January 1962, the official serves shall, taking into account applicant was appointed, by decision of his grade on establishment, determine the Commission of 14 December 1962, the number of years of pensionable as from 1 January 1962, an official of the service with which he shall be credited European Communities and established under its own pension scheme in respect in Grade A 3 , Step 1. In view of the of the former period of service, on the rights under the Staff Regulations with basis of the amount of the actuarial that appointment conferred upon him, he equivalent or sums repaid as aforesaid". waived, by signing an acknowledgment of receipt dated 21 December 1962 and in accordance with Article 104 of the The applicant, a Luxembourg national, Staff Regulations, the benefit of the worked in Luxembourg from June 1954 provisions of his previous contract. to October 1958 before entering the

service of the Commission. He paid the Court decided to open the oral contributions to the Luxembourg Caisse procedure without any preparatory de Pension des Employés Privés [Pension inquiry. Fund for Private Employees] (hereinafter referred to as "the Luxembourg Fund"). Following lengthy negotiations, it II — C o n c l u s i o n s of t h e p a r t i e s became possible at the beginning of 1980 to transfer pension rights acquired under The applicant claims that the Court a contributory pension scheme in the should: Grand Duchy of Luxembourg. The applicant submitted a request, within the — Declare the application admissible prescribed period, to have his rights and well-founded inasmuch as the transferred. By a preliminary decision of contested decision refuses to recog- 5 June 1980, the Luxembourg Fund nize for the purpose of calculating informed the applicant that the contri- the actuarial equivalent provided for butions with which he had been credited, by Article 11 (1) [sic] of Annex VII amounting to LFR 129 757, including [sic] to the Staff Regulations the date interest, had been transferred to the on which the applicant actually took Community scheme. up his duties as an official of the Commission; In support of his complaint of 23 April 1980, the applicant contended primarily — Order the defendant to pay the costs. that the term "establishment", to which The Commission contends that the Court the provision cited above refers, means "permanent engagement" and that such should: engagement should take place before the — Declare the application unfounded; date of the entry into force of the Staff Regulations, that is to say, in his case, — Make an appropriate order as to in October 1958. According to Mr costs. Étienne's interpretation, it is the date of engagement which must be taken as the reference date for the purpose of calcu- III — Submissions and argu- lating the increases in seniority to which m e n t s relied u p o n by t h e a right is acquired by a transfer such as' parties that provided for by Article 11 (2) of Annex VIII to the Staff Regulations. 1. In his action, the applicant contends first of all that the application of the That complaint was rejected by the Staff Regulations has in no way affected Commission's decision of 18 November the dates on which the pension rights of 1980, notified to the applicant by letter officials established pursuant to Article of 2 December 1980 and countersigned 102 of the Staff Regulations took effect by him on 4 December. (in his case,, as from 1 October 1958). Furthermore, he was engaged as "an This application, which was brought official" in a post included in the against that decision, was received at the detailed list of posts and not as "a Court Registry on 17 February 1981. member of the auxiliary staff", "a The written procedure followed the member of the temporary staff" or "a normal course. servant". The conditions governing his engagement and his employment Upon hearing the report of the Judge- displayed features typical of the national Rapporteur and the views of the or international public service, namely Advocate General, the First Chamber of the official's full-time service in the

2. In its defence, the Commission The applicant ceased to be affiliated to emphasizes that although in the notice the Luxembourg Fund's scheme when he concerning the applicant's taking up of joined the Communities' pension scheme his duties he is described as an official (October 1958, the date adopted by the that in no way affects the essentially Luxembourg Fund for the purpose of his insecure nature of his engagement before establishment). It would be arbitrary to the Staff Regulations entered into force. take as the reference period for the Far from being a formal clause, the purpose of calculating the actuarial reminder contained in the letter of 3 equivalent a career level attained by the December 1958 on the right to terminate applicant more than three years after he unilaterally contracts of employment for discontinued his affiliation to the Luxem- an indefinite period corresponds to the bourg Fund and joined the scheme of the intention of the parties not to create as Communities, quite apart from the fact between themselves any definitive legal that it would result in unjustified discrimi- relationship before the institution of the nation between officials who become Staff Regulations and the Conditions of subject to the Staff Regulations by virtue Employment referred to in Article 212 of of Article 102 thereof and officials newly the Treaty (cf. judgments of 15 July recruited. 1960, Joined Cases 43, 45 and 48/59

JUDGMENT OF 3. 12. 1981 — CASE 35/81

force. Moreover, that is immediately Thus the applicant must undoubtedly be apparent from the wording of Article credited with the period from 26 102 of the Staff Regulations. The October 1958 to 31 December 1961 for establishment to which this article relates the purpose of calculating his pension. is an expression of the transition from one legal situation to another. A servant previously recruited under a contractual relationship on a provisional basis, obtains as a result and at the time of his establishment, the benefit of the Staff Regulations and the resulting security of Establishment as an official, which

As the Court observed in its on a permanent basis, it is possible to judgment of 4 April 1973 in Case 31/72 enter the service of the Communities in Angelini [1973] ECR 410, such a waiver different capacities, either on a contrac- might properly relate to the rights arising tual basis or as a probationary official. under the earlier contract, including There is no reason to attribute to the acquired rights, and is moreover en- terms "official" and "establishment", as tailed, except where there is a provision used in Article 11 (2) of Annex VIII to to the contrary, by the transition from a the Staff Regulations, any meaning other contractual relationship to one governed than that which they have everywhere

ÉTIENNE v COMMISSION

official who subsequently becomes established, the number of additional years of pensionable service granted in respect of the period preceding his entry into the service of the Communities is calculated in exactly the same manner as it is for servants to whom Article 102 is applied. In both cases, the amount transferred is converted into a notional Alternatively, the defendant objects that pension and then into years of the mention, on the form entitled pensionable service under the Staff Regu- "Application for the repayment of lations on the basis of the annual basic pension rights", of 1 October 1958 as salary corresponding to the grade on the date of the applicant's establishment

service. The position of a member of the since the form was returned by the local staff or of the auxiliary staff who administration to the sender, the becomes a probationary official and Luxembourg Fund. Furthermore, the subsequently an established official, is purpose of that form was not to convey a virtually indistinguishable. Although, in Commission decision, but merely to both cases, the number of years of obtain certain information to assist the pensionable service under the Staff Regu- Luxembourg Fund.

JUDGMENT OF 3. 12. 1981 — CASE 35/81

ETIENNE v COMMISSION

Since the able insurance system (Regulations Nos adoption of the Staff Regulations, the 3 and 4, now repealed) or to establish a only time which may be taken into system for the repayment or transfer or account is the date of a person's pension rights. The applicant's intention engagement as an established official. In to join the European institutions' system the case of officials engaged before the of social security is all the more evident Staff Regulations entered into force, and from the fact that he failed to exercise in the absence of specific provisions the option of remaining affiliated to his governing the probationary period, the original insurance scheme by paying the date of commencement can only be that appropriate contributions deducted from on which they took up their duties in a those payable under the provisional permanent post in the service.

The affiliation to the Luxembourg Fund text of 7 May is binding on the ceased when he entered the service of institution in that it bears the signature the Communities as an official, it follows of the competent official, authenticated necessarily, according to the Commission by the official stamp of the institution. itself, that the actuarial equivalent must However, there cannot be the slightest be calculated by reference to the time doubt concerning the scope of the when he took up his duties. question raised, namely the date of establishment, in view of the fact that the latter constituted the very subject-matter It would be wrong to assimilate the of the "complaint" of 23 April 1980. probationary period provided for by the Finally, the form was attached to the Staff Regulations to the period preceding "complaint" of 23 April 1980 but with

an explanation to the effect that the 4. In its rejoinder, the Commission applicant had carefully refrained from considers that the applicant exaggerates completing that part of the questionnaire unduly the significance of the term leaving it entirely to the Commission to "official" in the notice concerning the provide, with a full knowledge of all the taking up of his duties. To begin with, circumstances, a comprehensive answer that word is not used either in the letter to the question raised. of engagement of 25 October 1958 or in that of 3 December 1958 laying down the conditions governing his engagement. In addition, it should not be forgotten that at the time it was standard practice to refer to the terminology of the Staff Regulations of the European Coal and Steel Community according to which servants recruited on a temporary basis under contracts for an initial duration of one year renewable for a further year were described as "temporary officials". Last, and most important, there is the established case-law of the Court which has already been cited. In the defendant's opinion, there is no doubt that the applicant was engaged under contract on a provisional basis. It is common ground It follows from the foregoing that the that the entry into force of the Staff appointing authority's decision of 18 Regulations transformed the legal December 1980 reverses a favourable position of servants previously employed decision in response to a request and by one of the Community institutions. therefore abolishes a vested right. The Only since that date has it been possible applicant takes the view that he was for servants under contract occupying a entitled to believe at the time that his permanent post in one of the Community right had been recognized. Even institutions on 1 January 1962 to become assuming that his note of 23 April 1980 established and thus acquire the status of constituted a "complaint" he could not an official. However, establishment does reasonably be expected to interpret the administration's silence for four months not have the effect of retroactively as a rejection. It therefore came as a conferring the status of an official on the complete surprise to the applicant when persons concerned. If that had been the he was notified of the appointing auth- case, Article 102 of the Staff Regulations ority's decision expressly rejecting his would have been drafted in different complaint six months and 25 days later, terms and "confirmation" would have that is to say five days before the final been used instead of "establishment." date for lodging an appeal against an The fact that a servant employed on a implied rejection. The fact that the contractual basis by an administrative Commission waited until then before authority has, before being appointed as replying shows that it had no intention an official by the latter, performed tasks of giving a clear-cut answer by inter- which may be considered as satisfying a preting the Staff Regulations reliably and permanent need of the service and has de unequivocally but that after considerable facto enjoyed security of employment is hesitation it reversed its position in not capable of conferring upon him ab extremis.

initio the status of an official, still less pensionable service is determined having that of an established official. regard to the grade on establishment. Thus it is the concept of establishment which is decisive in this context. No specific provision is recognized by the Staff Regulations in favour of established officials who, on becoming established, exercise their new option to pay to the Servants occupying a permanent post in Community the actuarial equivalent of one of the Community institutions before the retirement pension rights previously the entry into force of the Staff Regu- acquired in the private or public sector lations had no vested right to be or the sums repaid, whereupon the appointed as officials. The favourable institution credits them with an treatment constituted by establishing additional number of years of them was effected, case by case, by an pensionable service. The additional years express decision of the appointing of pensionable service with which they authority. The only servants who could are thus cedited are determined having benefit from this treatment were those regard to their grade on establishment. who fulfilled all the conditions laid down and in particular that of not being the subject of an unfavourable report by the Establishment Board. Although it is true that it has thus been possible to establish the majority of servants occupying permanent posts, none the less, in a large The Commission's statement, in number of cases, the Establishment connection with another case, of the Board made an unfavourable report and importance of Article 11 of Annex VIII the contracts of the servants concerned to the Staff Regulations in that its were terminated. purpose is to guarantee officials a pension scheme which takes account of all the service completed in the course of their career does not impose an obligation on the Commission to determine the additional number of years The indications to which the applicant of pensionable service otherwise than by attributes such great importance, set out reference to the grade on establishment. at the foot of his written waiver, were In this case, the Commission takes added pursuant to two special provisions account of all the periods of service of the Staff Regulations, Articles 103 and completed by the applicant in the course 104 (both repealed). Seniority is not of his career including both those spent relevant in connection with the in the service of the Commission prior to application of Article 11 of Annex VIII his "establishment" and those performed to the Staff Regulations. If a number of earlier. Therefore there is no hiatus in additional years of pensionable service in the applicant's career. respect of services rendered in the private or public sector before an official's entry into the service of one of the Community institutions is to be taken into account under its own pension scheme by the institution, the official is required to It is wrong to claim that the effect of the submit an application at the time of his defendant's reasoning is to deprive its establishment and the number of years of servants of part of the benefit which

5. In reply to a question put by the With regard to the argument put Court, the Commission stated that it had forward by him in the alternative, the dealt with approximately 50 cases similar applicant cannot be unaware that under to that of the applicant. In each case, it Article 90 (2) of the Staff Regulations, had taken 1 January 1962 as the date of only the appointing authority is establishment for the purpose of applying competent to take a decision on a Article 11 (2) of Annex VIII to the Staff complaint and that if an express decision Regulations. So far, the applicant was is taken, it must be notified to the the only official to have criticized the complainant together with a statement of Commission's modus operandi. the reasons on which it is based. Accordingly he cannot claim that the pre-printed certificate of establishment and application to transfer his contri- butions, completed on 7 May 1980 by the competent official, is a decision of IV — Oral procedure the appointing authority, particularly since that official informed the applicant repeatedly that in his own opinion the At the sitting on 8 October 1981, oral applicant's argument was totally mis- argument was presented by the parties. conceived. The defendant considers it useful to add that the form in question is one drawn up in advance by the Luxem- The Advocate General delivered his bourg Fund in which the term opinion at the sitting on 29 October "establishment" does not have the same 1981.

ETIENNE v COMMISSION

Decision

1 By application received at the Court Registry on 17 February 1981, Mr Étineean official of the Commission of the European Communities, brought an action, pursuant to Article 179 of the EEC Treaty, for the annulment of the Commission's decision of 18 November 1980 rejecting his complaint of 23 April 1980 concerning the interpretation of the term "grade on establishment" which appears in Article 11 (2) of Annex VIII to the Staff Regulations of Officials.

6 Before he entered the service of the Commission, the applicant was affiliated to the contributory pension scheme of the Grand Duchy of Luxembourg. The transfer of pension rights acquired under that scheme became possible only at the beginning of 1980.

7 In June 1980, the Luxembourg Caisse de Pension des Employés Privés [Pension Fund for Private Employees] (hereinafter referred to as "the Luxembourg Fund") agreed to transfer to the Commission the sum of LFR 129 757 representing the contributions paid by the applicant in respect of the period from June 1954 to October 1958, together with interest.

8 Having regard to the applicant's grade on the date of his establishment and of the amount transferred by the Luxembourg Fund, the Commission calculated in April 1980 that the period of pensionable service with which he was to be credited amounted to 10 months and 29 days.

9 By letter of 23 April 1980 addressed to the Commission's Directorate of Personnel, the applicant challenged the Commission's interpretation of the expression "grade on establishment" used in Article 11 (2) of Annex VIII to the Staff Regulations. He contended primarily that the concept of "grade on establishment", within the meaning of Article 34 of the Staff Regulations, had not formally come into existence at the time of his engagement as an

ETIENNE v COMMISSION

official, that is to say, in October 1958, and deduced from this that since the intention behind Article 34 of the Staff Regulations was that reference should be made to the commencement of the career, it was necessary to take the date of his engagement and not that on which he became subject to the Staff Regulations, adopted in 1962, for the purpose of calculating his rights.

JUDGMENT OF 3. 12. 1981 — CASE 35/81

public official with effect from 1 October 1958 and has been covered by the pension scheme for international public officials since 1 October 1958."

1 3 In the alternative, the applicant argues that the Commission was precluded from rejecting the complaint on 18 November 1980 after the applicant's request of 23 April 1980 had evoked a favourable response, namely the issue of the aforesaid certificate of establishment.

ÉTIENNE v COMMISSION

16 With regard to the alleged discrimination in relation to a newly recruited official, it must be observed that the two situations are not comparable. An official who begins a probationary period may not be established in a grade corresponding to a career bracket which is higher than that in which he was recruited when he began his probationary period. Accordingly, it cannot be said that an official recruited under the system embodied in the Staff Regu- lations benefits from a situation comparable to that of the applicant who, following his establishment in Grade A 3, claims to rely, for certain purposes, on Grade A 6 in which he was placed more than three years prior to his establishment.

17 The applicant deduces his final argument from the fact that a Commission , official, after receiving the applicant's letter of 23 April 1980, drew up the certificate of establishment addressed to the Luxembourg Fund and that the certificate specifies 1 October 1958 as the "date of establishment." Consequently, the Commission accepted by implication the argument put forward by the applicant and is thus no longer in a position to challenge its validity.

21 However, under Article 70 of the Rules of Procedure, the costs incurred by the institutions in actions by employees of the Communities are to be borne by those institutions.

On those grounds,

T H E COURT (First Chamber)

hereby:

1. Dismisses the application as unfounded;

2. Orders the parties to bear their own costs.