C-432/98

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(This version was repealed by the Treaty of 5. Article 184 of the EC Treaty (now Amsterdam and replaced by identical pro- Article 241 EC) states: visions in Article 9(3) of the Treaty of Amsterdam (first subparagraph) and Arti- cle 283 EC (second subparagraph).)

'Notwithstanding the expiry of the period laid down in the fifth paragraph of Arti- 3. The second sentence of the second cle 173, any party may, in proceedings in paragraph of Article 10 of the Staff Reg- which a regulation adopted jointly by the ulations of Officials of the European Com- European Parliament and the Council, or a munities ('the Staff Regulations') states: regulation of the Council, of the Commis- sion, or of the ECB is at issue, plead the grounds specified in the second paragraph of Article 173 in order to invoke before the Court of Justice the inapplicability of that regulation' (Article 173 of the EC Treaty is 'The [Staff Regulations] Committee shall now, following amendment, Article 230 be consulted by the Commission on any EC). proposal for the revision of the Staff Regulations ...'.

4. Article 90 of the Staff Regulations reads as follows: III — Facts

6. The Commission, having on 21 June '1. Any person to whom these Staff Reg- 1995 obtained a favourable opinion from ulations apply may submit to the appoint- the Staff Regulations Committee pursuant ing authority a request that it take a to the second paragraph of Article 10 of the decision relating to him. ... Staff Regulations, presented a proposal on 7 July 1995 for a 'Council Regulation (EC) introducing special measures to terminate the service of officials of the European Communities as a result of the accession of Austria, Finland and Sweden'3 ('the initial 2. Any person to whom these Staff Regula- proposal'). tions apply may submit to the appointing authority a complaint against an act adversely affecting him ...'. 3 — COM(95) 327 final, OJ 1995 C 246, p. 23.

8. Article 3 of the initial proposal states that the officials affected by these measures for their release — also called a 'golden 11. The initial proposal was submitted to handshake' — are to be selected by the the Community institutions concerned for Community institution, in the interests of their opinion, pursuant to Article 24 of the its service in connection with enlargement, Merger Treaty. 4The Parliament, the Court after it has given staff the opportunity to of Justice and the Court of Auditors gave a express their interest and consulted the favourable opinion on 25 September, Joint Committee. In so doing, it must take 12 October and 26 October 1995 respec- into consideration the age, ability, effi- tively. ciency, conduct in the service and family situation of the officials, as well as their seniority which must be a minimum of 10 years. Under no circumstances may mea- sures for the release of officials be applied without the consent of the official con- cerned. 12. During the legislative process the Com- mission declared that, in order to facilitate decision-making within the Council, it was willing to split the initial proposal and to accept that the Council would accord priority to dealing with measures for the release of Parliament officials only. 5 9. Under Article 4 of the initial proposal, a released official is entitled to a monthly allowance equal to 70% of the basic salary 4 — For the wording thereof, see point 2 above. for the grade and step held at the time of 5 — Council document No 11098/95 of 31 October 1995, reproduced in Annex III(d) to the Council's statement in departure. Entitlement to this allowance intervention at first instance.

6 — Cited in point 1 above. 7 — Cited in footnote 1.

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pating in another procedure or by any other that decision and, more broadly, the valid- means, and inasmuch as the institution ity of any provision of a regulation which concerned had not, after the decision may in the circumstances be relevant to the rejecting the requests, taken any final adoption of that decision. decision which those officials could chal- lenge.

21. The objection of illegality provided for in Article 184 of the EC Treaty gives expression to a general principle conferring 24. Finally, the argument that the appoint- upon any party to proceedings the right to ing authority had no choice but to apply challenge incidentally, with a view to the Regulation and therefore to reject the obtaining the annulment of a decision requests could not be accepted. The fact addressed to him, the validity of the that the appointing authority was legally regulation forming the direct legal basis of bound to apply the Regulation did not

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prevent the applicants from exercising their in a manner which was arbitrary or, at the right under Article 184 of the EC Treaty to very least, manifestly inappropriate. bring before the Community judicature a claim for a declaration that the Regulation was inapplicable.

— Infringement of essential procedural requirements

(b) The objection of illegality (substance)

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officials. Moreover, it expressly asked to be 3. Outcome reconsulted in the event of any substantial amendment. Accordingly, the Parliament 31. The Court of First Instance therefore should have been consulted again before held as follows in the operative part of the the Council adopted the amended version judgment in Chvatal and Others: of the initial proposal. 'The Court hereby:

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— on 28 February 1996 to Kaj Øster- 3. Orders the Kingdom of the Nether- gaard, lands and the Council of the European Union to bear their own costs.'

— on 28 February 1996 to Maureen Russell, 32. The operative part of the judgment in Losch reads:

— on 11 March 1996 to Ulrike Sinter,

'The Court hereby:

V — Procedure and forms of order sought — set aside the judgment of the Court of First Instance of 30 September 1998 in Case T-13/97 between Antoinette Losch and the Court of Justice sup- ported by the Council of the European 33. The Council brought appeals against Union and the Kingdom of the Nether- those judgments on 1 December 1998. It lands; claims that the actions were inadmissible if only because a request within the meaning of the Staff Regulations requires a legal basis, which is absent in the present case. A mere finding of the absence of a legal basis cannot adversely affect an official. By •— in its discretion, make an appropriate nevertheless annulling the decision of the order as to the costs of the proceedings Registrar, the Court of First Instance failed before the Court of Justice. to observe the institutional balance enshrined in Article 4 of the EC Treaty (now Article 7 EC). Moreover, the Court should not have upheld the objection under Article 184 of the EC Treaty that the 35. In the view of the applicants, the appeal Regulation is invalid, but should have is inadmissible since the judgment of the referred the applicants to the possibility of Court of First Instance of 30 September a direct action. As regards the substance of 1998 in Case T-164/97, 8pronounced in a the judgments, the Council pleads that the parallel case on identical grounds, has principle of equal treatment and the prin- become definitive and thus the illegality of ciples governing consultation of the Parlia- the Regulation has been definitively estab- ment and the Staff Regulations Committee lished. In the alternative, the applicants were misapplied. contest the arguments which the Council puts forward in its appeal.

1. The admissibility of the appeal — in the alternative, declare the appeal unfounded and order the Council to bear all the costs.

38. The applicants submit that the appeal is inadmissible. At least the appeal lodged by the Council against the judgment of the Court of First Instance in Busacca, 9which 37. The applicant in Losch contends that was pronounced in a parallel case on the Court should: identical grounds, is inadmissible under the third paragraph of Article 49 of the EC Statute of the Court of Justice because the Council did not intervene in that case. Thus, the illegality of the Regulation has been definitively established. The appli- — declare inadmissible the appeal lodged cants conclude that there is accordingly by the Council against the judgment of no legitimate interest in bringing the pre- the Court of First Instance (Fifth sent appeals. Chamber) of 30 September 1998 in Case T-13/97 between Antoinette Losch and the Court of Justice sup- ported by the Council of the European Union and the Kingdom of the Nether- lands; 39. In that respect it should be noted that the effect of a finding, on an indirect challenge, that a regulation is inapplicable on the grounds set out in the second

— accordingly, dismiss the appeal and 9— Case T-164/97, cited in footnote 8; set' the Opinion or today's date in Case C-434/98 V Council v Busacca ami order the Council to bear all the costs; Others, pending before the Court.

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(a) The admissibility of the original action 42. Furthermore, the Court of First Instance erred in declaring that the objec- tion of illegality raised pursuant to Arti- cle 184 of the EC Treaty against the Council's regulation was admissible. In Submissions of the parties order for an objection of illegality to be admissible, the application for annulment must itself be founded on a substantial cause of action, the objection of illegality constituting one of the pleas put forward in 40. The Council takes the view that the support of that application. In the present assessment of the Court of First Instance case, the application was in reality aimed concerning the admissibility of the action is solely at contesting the Regulation. incorrect in law. Any persons to whom the Staff Regulations apply have an unrest- ricted right to submit requests falling within the scope of those regulations. However, the right to submit requests 43. The Kingdom of Spain concurs with the cannot in law be exercised on any account Council's view in all respects. Spain in the absence of a legal basis. observes that in the present case there was no decision adversely affecting an official since the letters of rejection expressly 10 — Joined Cases 31/62 and 33/62 Wöhrmann v Commission contemplated regard being had to the [1962] ECR 501, at p. 507, and Joined Cases 15/73 to applicants' requests should the Council 33/73, 52/73, 53/73, 57/73 to 109/73, 116/73, 117/73, 123/73, 132/73 and 135/73 to 137/73 Schots-Kortner and Others v Council, Commission and Parliament [1974] adopt the relevant legislation. An objection ECR 177, paragraphs 36, 37 and 38. of inapplicability pursuant to Article 184

of the EC Treaty can be raised only within by the institutions. 11 Accordingly, the the framework of an action and not in Court must apply the Community system isolation. However, in the present case of legal remedies and procedures in such a there is no such action. In particular, no way that effective legal protection is pro- action for failure to act pursuant to Arti- vided against any infringement of the law cle 175 of the EC Treaty (now Article 232 by the institutions. EC) can be brought, since the Council is not required by law to adopt a regulation on terminating the service of officials of the Court of Justice. 46. Furthermore, the Court has already decided a case which, at least as regards admissibility, is comparable, namely Raz- zouk. 12 In that case Mr Razzouk applied 44. The applicants take the view that the for a widower's pension as the surviving requirements which the Council places on spouse of a Community official. It was not requests within the meaning of Arti- disputed that under the provisions of the cle 90(1) of the Staff Regulations have no Staff Regulations applicable at that time basis in that provision and the case-law of the necessary conditions for such entitle- the Court. As regards the failure to observe ment were not satisfied in his case. For that the institutional balance alleged by the reason the Commission rejected his request Council, they refer to Article 176 of the and the subsequent complaint. At that time EC Treaty (now Article 233 EC) under the Staff Regulations granted such a wido- which the institutions are required to take wer's pension only under conditions much the necessary measures to comply with less favourable than those applicable to a judgments. widow's pension. Mr Razzouk therefore based his action on a breach of the principle of equal treatment of men and women. The facts of that case are thus similar to those of the present case inas- much as there is no doubt that, on the Appraisal wording of the applicable secondary legis- lation, no legal basis existed for the request which was submitted. The action brought by Mr Razzouk also necessarily sought an amendment of existing secondary legisla- 45. As all the parties correctly observe, the tion and presupposed a finding that the European Community is a community existing regulation laying down the Staff based on the rule of law. According to Regulations was inapplicable with regard settled case-law, it follows that neither the to the grant of widowers' pensions. None Member States nor the Community institu- tions can avoid a review of the question whether the measures adopted by them are 11 —Judgments in Case 294/83 Les Verts v Parliament [1986] ECR 1339, paragraph 23, and in Case 314/85 Foto-Frost in conformity with the basic constitutional [1987] ECR 4199, paragraph 16; order of 13 July 1990 in charter, the Treaty, which established a Case C-2/88 Imm. Zwartveld and Others' |1990| ECR I-3365, paragraph 16; Opinion 1/91 |1991| ECR complete system of legal remedies and I-6079, paragraph 21; and judgment in Case C-314/91 Weber v Parliament |1993| ECR I-1093, paragraph 8. procedures designed to permit the Court 12 — Joined Cases 75/82 and 117/82 Razzouk and Beydonn v to review the legality of measures adopted Commission [1984] ECR 1509.

48. It is true that the right to submit requests under Article 90 of the Staff Regulations cannot be interpreted as per- mitting members of staff, unlike all other unprivileged applicants under the fourth paragraph of Article 173 of the EC Treaty, 49. The rejection of the applicants' requests to bring about an abstract review of the also adversely affects them for the purposes legality of measures of general applica- of Article 90(2) of the Staff Regulations tion. 13 Furthermore, the appointing since those requests are aimed at securing authority could not grant the applicants' an entitlement. Nor can the reservation requests since, if only for reasons of regarding a change in the legal position budgetary law, it cannot take measures to alter this finding. It is not possible to secure terminate the service of officials under the the entitlement at least until the relevant conditions laid down by the Regulation in decisions have been adopted. Conse- the absence of a relevant legal basis derived quently, the action is in principle also from secondary legislation. 14 However, it admissible under Article 91 of the Staff does not follow that the request has no Regulations.

50. Since, in accordance with the foregoing be possible to provide effective legal pro- considerations, the prohibition of discrimi- tection in cases of this kind. Accordingly, nation is to be regarded as a possible legal the Court holds that the prohibition of basis for the claim which has been asserted, discrimination is infringed in such cases the fact that, as found by the Court of First relating to the grant of an advantage. 16 Instance, members of staff of other institu- The risks for the institutional balance tions are excluded from the benefit of the which nevertheless exist in the case of Regulation loses the meaning attributed to decisions of this kind must be dealt with it by the Court of First Instance and the not at the level of admissibility, but when parties. The illegality of the Regulation assessing whether there is unlawful discri- should not be regarded as the basis for the mination. 17 action but merely as a consequence of a possible finding that officials of other institutions have been subject to unlawful discrimination, limited to the failure to include the applicants. Therefore, the valid- ity of the Regulation and the admissibility (b) The substance of the original action of the objection that it is inapplicable within the meaning of Article 184 of the EC Treaty need not be considered.

— The need to reconsult the Parliament

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ulations concerning the release of staff Appraisal applicable solely to the European Parlia- ment met a pressing desire on the part of the latter. Therefore, flexibility in the Community legislative process, which is necessary in order to achieve a convergence 55. Although a plea alleging failure to between the views of the institutions, consult the Parliament relates to the safe- should apply in the present case as regards guarding of its rights, the Court has the form in which the European Parliament consistently held that any person may rely may communicate its opinion to the Coun- on such failure in an otherwise admissible cil or its assent to an amendment of the action in order to establish that a measure proposal initially submitted by the Com- is unlawful. 1 8In the present case, it may mission. In the present case, excessive remain open whether this case-law must be adherence to formalities would impede followed. As has already been stated, the the proper functioning of the legislative decisions at issue are not founded on the process, whilst not meeting any need. Regulation, but might be subject to annul- ment at most because they infringe the prohibition of non-discrimination. Further- more, if the Regulation were inapplicable there would still be no right of access to early termination of service as provided for by the Regulation.

53. The Kingdom of Spain takes the view that the Regulation does not diverge sub- stantially from the proposal on which the Parliament was consulted or from the — The need to reconsult the Staff Regula- wishes of the Parliament. The differences tions Committee between the proposal and the Regulation are justified, officials have no right to termination of their service and the number of Parliament officials affected did not change. Therefore, it was not necessary to reconsult the Parliament. Submissions of the parties

compared with the Parliament. Such an — The prohibition of discrimination extension of the need for reconsultation would then also have to apply to many other consultative bodies. That would cause considerable disruption to the legis- lative process. Nor does the Regulation involve an amendment of the Staff Regula- Submissions of the parties tions, which is the only instance where consultation of the Staff Regulations Com- mittee is required. The Kingdom of Spain concurs with those arguments and reiter- ates that the Regulation does not diverge substantially from the proposal. 59. Finally, the Council argues that the principle of non-discrimination has been applied incorrectly. The Court of First Instance's conclusion that the Council drew a distinction which is arbitrary, or at least manifestly inappropriate in relation to the objective pursued, is incorrect in law. The 57. The applicants observe that the Staff distinction drawn between officials of the Regulations Committee also consists of Parliament and officials of the Court of democratically elected representatives, that Justice is justified on at least three grounds: is to say representatives of the staff. Since the Council recognises the rights of parti- cipation of democratic institutions, the refusal to reconsult the Staff Regulations Committee is contradictory. 1. the Parliament undertook not to increase its complement of staff for five years;

Appraisal

2. this undertaking is of particular impor- tance because the Parliament employs a large number of staff — far more than the Court of Justice; 58. As has already been established with regard to consultation of the Parliament, it may remain open whether it was necessary to reconsult the Staff Regulations Commit- tee. In this regard too, any procedural errors would be irrelevant as regards the 3. the Parliament called for the immediate validity of the contested decisions of the submission of a proposal for a regula- Court of Justice. Consequently, there is no tion with respect to its staff, as is also need to comment further on this matter. reflected in the preamble to the Reg-

Appraisal 63. As regards release, the applicants are treated, as officials of the Court of Justice, differently from officials of the Parliament. Parliament officials may express an interest in a measure for their release. This possi- bility does not merely correspond to an 61. The Court has consistently held that it expectation irrelevant in terms of Commu- is 'contrary to the general principle of equal nity law, but constitutes the first step for treatment, which is one of the fundamental participating in a formal administrative principles of Community law, for compar- procedure. Although those participating in able situations to be treated differently the procedure have no mandatory entitle- unless the difference in treatment is objec- ment to be released, they at least have an tively justified'. 19 entitlement to adoption by the appointing authority of a decision on their release, after due exercise of its discretion, having 19—Joined Cases 271/83, 15/84, 36/84, 113/84, 158/84, 203/84 and 13/85 Ainsworth and Others v Commission regard to the age, ability, efficiency, con- and Council [1987] ECR 167, paragraph 33; see also Joined Cases 152/81, 158/81, 162/81, 166/81, 170/81, 173/81, 175/81, 177/81, 178/81, 179/81, 182/81 and 186/81 Ferrarlo and Others v Commission [1983] ECR 2357, paragraph 7, Case 59/83 Biovilac v EEC 20 — Article 5(3) in respect of recruitment and service career [1984] ECR 4057, paragraph 19, and, last, Case within the same category, Article 7(1) in respect of assign- C-292/97 Karlsson and Others [2000] ECR I-2737, para- ment to a post, and the second and third paragraphs of graph 39. Articles 27 in respect of recruitment.

68. The fact that the introduction of mea- sures to release staff is not directed primar- 65. It is thus necessary to consider whether ily at the individual legal status of officials the unequal treatment can be justified.

23 — Chi'atal and Others, paragraph 126. 21 — Joined Cases 44/74, 46/74 and 49/74 Acton and Others v 24 — See Joined Cases T-481/93 and T-484/93 Exporteurs in Commission [1975] ECR 383, paragraph 26. Levende Varkens and Others v Commission (1995) 22 — Case 223/86 Pesca Valentia [1988] ECR 8 3 , para- ECR II-2941, paragraph 120, and Joined Cases 116/7:· graph 18, and Karlsson, cited in footnote 19, para- and 124/77 Amylum v Council and Commission [ 1979] graph 51. ECR 3497, paragraph 19.

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but at the organisation of the institutions manifest errors in establishing the under- concerned, also indicates that there is broad lying facts or in the assessment thereof. discretion. Whether an institution is granted the possibility of terminating the service of some of its officials for the benefit of applicants from new Member States is above all an organisational matter. Furthermore, the Regulation has consider- able budgetary consequences since the 71. The first criterion for this review is Community dispenses with the service of provided by the preamble to the Regula- officials in order to refill their posts but has tion. It states as follows: to continue providing for those officials at great expense.

'... following the accession of Austria, Finland and Sweden, the composition of the Community civil service needs to be 69. On the other hand, the Regulation does adjusted; not affect any vested rights of officials who could potentially benefit from it. It merely provides an opportunity, safeguarded by procedural law, to obtain a benefit. Nor is the unequal treatment linked to a distin- guishing criterion which is particularly ... new posts have been granted to the significant as regards officials' individual institutions by the budgetary authority for rights — in particular their fundamental this purpose; rights and freedoms — as would be the case in the event of a distinction on the basis of sex or nationality, for example.

72. The aim of integrating nationals of the ing been granted the possibility of releasing new Member States into the Community staff. civil service in sufficient numbers cannot be criticised. Moreover, the Regulation pro- ceeds on the basis that this aim is to be attained in principle by creating new posts. It states, however, that the Parliament 75. On the other hand, in the context of the intended in the future — as from objective of bringing about appropriate 1996 — to adjust the composition of its representation of nationals of the new staff by resorting 'almost exclusively' to Member States in the institutions' staff, special measures to terminate service. The the legislation adopted cannot be mani- Regulation is intended solely to enable the festly inappropriate. Prior to the measures Parliament to take such measures. to adjust the composition of the civil service, 3 249 officials were employed by the Parliament with an additional notional reserve of 74 posts for officials seconded to the political groups. 25Therefore, the single allocation of 242 new posts corresponded to 7.3 to 7.4% of the staff in the case of the Parliament. In the case of the Court of Justice, the number of officials increased 73. The Court of First Instance thereupon from 750 to 842. This corresponds to establishes that the Court of Justice, like about 12.3% of the staff. Consequently, the Parliament, received a single special viewed as a whole the Court of Justice was allocation of new posts, in 1995 only. allocated considerably more posts in rela- Although the Court of Justice had also tion to its complement of staff for the displayed interest in the possibility of incorporation of officials from new Mem- release, it was not granted such a possibility ber States on the accession of those States. (Chvatal and Others, paragraph 130 et Even if the 70 posts covered by release are seq.). Therefore, the preamble to the Reg- included, the rate in respect of the Parlia- ulation did not justify the distinction which ment is still only 9.4 to 9.6%. The prefer- is made in it. This finding by the Court of ential treatment of the Parliament vis-à-vis First Instance is also correct. the Court of Justice in respect of release is therefore offset by the one-off allocation of new posts. Consequently, from the point of view of an organisational measure to adjust the composition of the civil service, the criterion which is decisive in this case, it does not appear manifestly inappropriate to have considered the Parliament, but not the Court of Justice, when allocating posts 74. Nevertheless, the Court of First for the release of staff in addition to the Instance itself demands that the distinction one-off allocation of new posts. Accord- must be manifestly inappropriate in rela- ingly, the differences in the treatment of the tion to the objective pursued. However, it members of staff of both institutions which merely demonstrates that the preamble to the Regulation does not contain sufficient justification for the Parliament alone hav- 25 — OJ 1994 L 369. p. 154.

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other than those stated' 28— it again does VII — Costs not follow that the applicants are entitled to participate in the procedure for deciding on release.

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VIII — Conclusion

87. I therefore propose that the Court should:

(1) set aside the judgments of the Court of First Instance of 30 September 1998 in Case T-154/96 Chvatal and Others v Court of Justice and Case T-13/97 Losch v Court of Justice;

(2) dismiss the actions for annulment brought before the Court of First Instance by Christiane Chvatal and Others on 8 October 1996 and by Antoinette Losch on 20 January 1997;